October 31, 2014

Women’s Corporate Exodus to Entrepreneurship

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Open Letter to Corporate Leadership:

I want to dispel a myth that still circulates in our economy when people try to explain why the percentage of women on the management track plummets from 53% of the entry-level workforce to 20% or less in leadership. The myth goes something like this: “Women get to childbearing age about the time they’d be ready for promotion, and a lot of them leave to start families.”

Wrong. The truth is that according to the Bureau of Labor Statistics, 58% of women in the U.S. are working in the civilian workforce (only 6% fewer than working men.) Importantly the percentage of working mothers is 65%, which is 2% above the number of working men.

It should come as no surprise that women stay in the workforce in their most vital years, because ever since we’ve started keeping statistics on it (about 10 years) women are proving themselves to be able and effective workers and leaders, very capable of earning their living and helping businesses thrive.

So if working moms aren’t leaving the workforce to have kids and aren’t climbing the corporate ladder, where are they going?

Based on research and overwhelming anecdotal evidence. Here is the unvarnished truth about what the women in your company are thinking.

Many women know they could be good leaders, but instead they consciously choose not to leverage their full talent on your behalf.

McKinsey found that women are 50% less likely than men to aspire to the C-Suite even if “anything were possible.” While many interpret this to mean women aren’t ambitious, when you talk to the women you’ll find that they are either frustrated, resigned or – as is frequently the case – simply want to do good work instead of “waste their time” playing corporate political one-upsmanship. When this is the case, companies are spending their leadership development energy on the people who want to play corporate political games as much or more than doing good work, and they often end up promoting less competent men to the top. It should really make you take a hard look at your corporate culture and ask yourself if you’re running a true meritocracy, or a club that only some people can (and care to) get into.

Where do the best and brightest go? Many of the best, most confident and talented women would rather be their own boss, and live the life they want, than work for you.

Some women bonk their head on the glass ceiling, but most who leave simply aren’t interested in busting through it. Rather than decide to stay in the lower ranks and “do good work,” they leave to pursue self-employment where they find greater satisfaction and more flexibility. The ranks of women-owned companies are growing at one-and-a-half times the rate of those started by men. But while female and male entrepreneurs are demographically similar, their businesses aren’t; on the whole, women run smaller, less well financed businesses that give them greater personal flexibility and quality of life. While women are clearly capable of growing entrepreneurial enterprises (growing $10 million+ firms  47% more than all firms of that size over the last decade), my anecdotal conversations with many women business owners demonstrate that “to grow or not” is a function of personal choice than ability or desire to “prove themselves.”

What this data tells us is that women are opting for a different way of making a living than pursuing the vision of the ladder-climbing corporate exec. They’re valuing quality of life, family and career satisfaction more highly than the trappings of executive success. They’re content to work in order to have enough money to live, not “get rich.”

Entrepreneurial women in particular are establishing a new definition of success, as a person who can pay her bills, be fulfilled and happy, do good work, be present to her life and the people in it who are important to her. She can do this on her own, live “off the corporate grid,” survive and thrive. While there are still many institutional disincentives to this lifestyle (i.e., expensive health care, lack of maternity leave etc.), more and more women are pursuing it anyway.

Think you can live without their talent? Think they’ll come around when the economy picks up? Think again. Women opting off the ladder and into entrepreneurship are just the beginning. Sharing the same values and desire for this new kind of success are the millennials (and not a few Gen Yers, too) who represent your future workforce.

Women are the canary in your coal mine, corporate America. Now what will you do?

This post originally appeared on the Switch & Shift blog.

Photo Credit: flickr

Dana Theus (173 Posts)

Dana is a values-based consultant, coach and advocate for women's leadership strategies that produce business results. In launching InPower Women, a Forbes Top 100 web site for women, she found her message of “In”Powerment resonating strongly with professional women. Her articles are also featured and syndicated today on several sites including The Huffington Post, The National Journal's Next America, Smartbrief on Leadership, and Switch & Shift, she's gained a warm reception as a motivational speaker to women’s groups helping women understand what the research says about how to gain more power instantaneously [Watch her TEDx Talk for an example.] Dana is a regular host for Executive Leader's Radio, the #1 business talk show in the mid-atlantic states. Read her full bio. Follow Dana:  LinkedIn Google+  Twitter RSS


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Comments

  1. Wise words Dana, wise words.

  2. Great blog, Dana! I think it’s great to dispel the myth that everyone aspires to the C-Suite. I think more and more people – men and women alike – are aspiring to a life that is both productive and happy. Many of the people I work with see happiness and top leadership within a large organization as mutually exclusive.

    • Leslie – Yes, there are so many myths running around. Mostly the ones we make up to make sense of our own choices. Company cultures have been able to require people to put away their own needs for so long. But today’s women (and their children the millenials) are going to change all that, I believe! Thanks for your comment.

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