A coming sea change in leadership: a gender gap in ownership may be closing, the active shall inherit the firm - includes a listing of conferences aimed at family business for April-May - Family Business - Column

Nation's Business, April, 1996 by Sharon Nelton

A gender gap in ownership may be closing; the active shall inherit the firm.

It amazes me how little attention has been paid to the stunning new figures on women's business ownership in this country. According to the National Foundation for Women Business Owners, women now own 36 percent of all U.S. businesses and bring in annual revenues of $2.28 trillion. That's trillion. (See Dateline: Washington, on Page 7.)

Just a quarter of a century ago, women owned less than 5 percent of American businesses. This is a real sea change, and we can only begin to imagine what it will mean for family businesses.

Will it mean that, in due time, women will own one-third or more of all our family businesses? Probably. Right now, we don't know how many women own family businesses. We don't even know how many family firms there are because the U.S. Census Bureau does not track them. However, in a survey of 1,029 family-business owners and co-owners conducted by Massachusetts Mutual Life Insurance Co. last year, 16 percent of the respondents were women.

That study found that men in family businesses are still more likely to be the key decision makers. "The predominance of male leadership apparently will prevail for at least the next generation," the report said.

Even so, seeds of change are visible in the survey findings. While male owners were twice as likely as women owners to envision their sons assuming control of the business in the next generation, women were twice as likely as men to envision their daughters taking over.

What that suggests is that as today's 7.9 million women-owned businesses mature and the sons and daughters of the founders join their mothers' businesses, for the first time in history daughters may have a more-than-equal chance of beating out their brothers as successors to leadership and control.

Unfair? Reverse sexism? Perhaps. But we still don't know what those motherfounders will do. When faced with having to choose their successors, perhaps they will select the most able child, whether son or daughter. Or perhaps, as the MassMutual report also suggests, they will put sibling teams in charge.

Research shows that women's leadership styles are different from men's. For example, a 1994 study by the National Foundation for Women Business Owners found that women entrepreneurs were more likely than their male counterparts to seek the advice of others. And while men think in terms of hierarchy and establishing rules, women tend to think of professional relationships as networks.

Another study by the foundation shows differences between the benefits offered by women-owned firms and those of small businesses as a whole. Women's firms, for example, were more likely to offer flextime, paid personal and sick leave, and tuition reimbursement, and they were less likely to provide medical and retirement benefits.

Many women business owners also believe that their perceptions of success are different from those of their male counterparts. For example, a woman entrepreneur once told me that she didn't want her success to be measured in terms of the size of her company. Success for her meant "delivering a very high-quality product to my client, feeling great about it, watching the client reap the rewards of it, and also having a personal lifestyle that I enjoy."

As more women lead family-owned companies, we could well see some shifts in the definitions of what it means for family firms to be successful.

It will be fascinating to watch women's businesses turn into family businesses in massive numbers and to see how they differ from today's family firms. As an old song goes, there'll be some changes made. We just don't know what they'll be.

MARK YOUR CALENDAR

April 18, Randolph, Mass.

"Family Meetings: The Whys and Wherefores" is offered by the Northeastern University Center for Family Business. Call Paul I. Karofsky at (617) 320-8015.

April 18, Philadelphia

"Disciplined Nepotism" is a breakfast forum featuring members of a family business. Call Henry Landes of the Delaware Valley Family Business Center at 1-800-296-3832.

April 24, West Springfield, Mass

"Individual Personality Styles: Their Impact on Leadership Effectiveness and Interpersonal Relationships in a Family Business" is a seminar of the University of Massachusetts Family Business Center. Call the center's director, Ira Bryck, at (413) 545-1537.

April 25, New Orleans

"Long-term Succession Planning: When? Who? How? (Why?!?)" is a forum offered by the Tulane University Family Business Center. Call (504) 865-5306 or (504) 8628482.

April 30, Salem, Ore.

"Family Business Boosters" is a breakfast seminar with nationally known consultant John L. Ward. Call the Austin Family Business Program at Oregon State University at (541) 737-3326.

May 3, Southfield, Mich

"Family Business Valuation and Compensation" is a topic of the Family Business Council meeting. Contact Rick Segal at (810) 353-5600.

May 3, Parkersburg, W.Va.

"There Is Life After Business" is a one-day seminar sponsored by the local Rotary Club and conducted by Richard L. Haid, a professional "adult mentor." Call Priscilla Leavitt at (304) 422-7300.