'NextGen Women' Outperform (Men) in Business. And They're Coming Into the Workforce
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We’re all looking for that competitive edge -- from the new products we create, to the new talent we find, to the new markets we strive to dominate. But there’s another factor companies haven’t sufficiently explored as a means of driving growth and innovation: nextgen women, meaning those born between 1995 and 2010 and just beginning to enter the workforce.
You may have heard about those studies proving that women impact investment returns -- for instance, First Round Capital’s analysis found that women founders impacted returns by as much as 63 percent, compared to all-male founding teams. And Catalyst, the research group focused on women in the workplace, found that having more women in senior positions leads to better corporate performance.
What's new is a report just released by my nonprofit business training organization, Girls With Impact, in partnership with EY’s People Advisory Services. Its research, based on six years of data involving 1,454 participants on 535 college teams from UCLA, Rice University and the University of Connecticut, revealed why it pays to have women younger than millennials on your team.
While most business and HR leaders probably aren’t yet thinking about Gen Z, the data is a wake-up call for CEOs, HR leaders and venture investors: Pay attention to this “innovation generation” if you want to drive growth and reduce risk.
The report, titled Proving the Power of NextGen Women, focuses on women participating in college venture competitions, in which students pitch business plans to experts, in search of startup funding.
The report noted that these young women students made up just 22 percent of team members participating in the competitions. It pointed out that some teams were all male and that many with both genders had more men than women. What's more, 51 percent of the ranking teams -- those in first, second or third place -- had a woman founder, and 32 percent had a woman "CEO."
Therefore, it could be concluded that the women overall had an outsized impact on their teams' wins than did the men. And that finding could have huge implications when you pay attention to the fact that the women on these teams were all still in college.
“What’s powerful is the comparison of the '22 percent' of women participants to the '51 percent' of ranking teams,” George Brooks, who was involved with the study, commented during a podcast. Brooks is in a position to know: He's Americas Leader for EY’s People Advisory Services and advises top companies on how to transform their organizations.
Unleashing young women's potential
Brooks joined leaders from NASDAQ, private equity firm KKR and the University of Connecticut (UConn) in a live briefing before 1,000 people to discuss the report findings (watch the briefing replay). “We need to do a 180,” Brook said, “and re-think organizations, to unleash the potential in these young women.”
One of the biggest obstacles to doing this, the panelists noted, is the culture that still exists in any companies -- an area of huge risk, as the #MeToo headlines have underscored. “In order to unleash women, you have to have the right culture,” Brooks said. Some of the things that need to be in place, he said, are a sense of belonging, respect and safety --- psychological and physical safety
“Once you have those baselines, it’s about aligning with purpose,” Brooks continued. “If you do the opposite, people don’t feel safe or that they have a voice … then, when they wake up and go to work, you won’t get value from them.”
Why women outperform men.
The question behind the data on young women's power was, and is, why? David Noble, director of the Werth Institute for Innovation and Entrepreneurship at the University of Connecticut who also participated in the report’s release, had a theory: “Women are less likely to get involved in entrepreneurial programming before they have a well-thought-out idea and team," he said. "So, they’re waiting to a later point to show up and get involved.
“Women-led teams and diverse teams visualize markets that male-only teams don’t see and don’t know," Noble added. "So, they’re getting more market breadth and building out solutions better for both men and women compared to male-centric teams and solutions.”
How do you harness nextgen women?
The data pointed to the obvious need for businesses to include nextgen women on teams. It’s not enough to have women in your company; you have to be sure they’re involved in innovation efforts and meetings. Women, after all, want purpose in their jobs, so their personal drive shouldn't be overlooked. According to EY, 30 percent of the women-led companies studied had targeted growth rates of more than 15 percent for the next 12 months vs. a growth rate of just 5 percent in male-led companies.
In this context, Girls With Impact points to the need to invest in STEEM, not just STEM. STEM creates the doers, but with STEEM, the “E” for entrepreneurship will ensure the development of leaders with the mindset to navigate the future of work
Jody Bell, 16, is a case in point. A Girls With Impact grad, Jody developed a business plan, then launched her own nonprofit immigrant assistance venture, In Case of Deportation, giving her a giant leg-up for college and career. “I can guarantee you that there are other high schoolers equally as driven, and if we give them the skills, they will become the future leaders we need right now,” Jody said at the briefing discussing the report’s findings. (Watch Jody 11 minutes in )
The good news for business leaders is that, if they invest in next-gen entrepreneurship training, they'll have new avenues to build their brands' reputations, impact their local communities and ensure a pipeline of young, motivated leaders. That's why these leaders need to :
- Boost their recruiting ROI. According to a Payscale survey, a whopping 60 percent of companies say new hires lack problem-solving and critical thinking skills as well as "soft" skills, like the ability to compose professional emails or present an idea.
- Consider partnering with organizations, like ours and other mentoring groups like Girls Who Invest, Girls Who Code and DigiGirls, to reach younger candidates and build a talent pipeline offering the skills companies need.
- Include nextgen women on teams. It’s not enough just to have women in your firm; be sure they’re involved in innovation and meetings. They want purpose in their jobs. Don’t overlook their drive.
The need is now: As Noble put it at the briefing when he spokef the study's findings, “This is another nail in the 'business gender' coffin. Companies that fail to turn to the next generation will miss out -- pure and simple.”