How three fundamental adaptations can help women entrepreneurs scale big

By

Lisa Schiffman

EY Global Director and EY Entrepreneurial Winning Women™ Leader

Strategic marketing and communications leader. Passionate advocate for entrepreneurs and gender parity.

9 minute read 10 May 2019

An authentic purpose, a community of peers and a transformed leadership style help women-led companies hasten growth. 

Through the EY Entrepreneurial Winning Women™ program, we have gained a unique understanding of how to help women entrepreneurs succeed. This competition and executive leadership program identifies a select group of women entrepreneurs in the US and Canada whose businesses show real potential to scale — and then helps them do it.

In this report, we include survey data on the program, developed and gathered by the Babson College Center for Women’s Entrepreneurial Leadership, and advice from other thought leaders  in entrepreneurship, entrepreneurial finance and leadership.

Scaling big: Three force multipliers for growth

Because women entrepreneurs are prone to underestimating what they can accomplish, our advice starts with “think big and be bold.” As Sherry Stewart Deutschmann, Founder and CEO of LetterLogic, told us recently, “It was through [the program] I realized I had a company that could easily be a $100 million company, and beyond. On my way!”

Additional guidance we’ve developed — our “5 Ways to Win” — counsels the entrepreneurs to take action in four other areas:

  • Building a public profile
  • Working on the business rather than in it
  • Establishing key advisory networks
  • Evaluating financing for expansion

While these steps are proven and necessary, our report reveals three new and noteworthy adaptations – highlighted below – that are contributing significantly to accelerated growth in these women-led companies.

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Adaptation 1

The kinship of community spurs growth

Communities offer women entrepreneurs much-welcomed affirmation, know-how, peer-to-peer guidance and, ultimately, role models.

Only 2% of women-owned businesses break through the $1 million barrier. However, the number of women-owned businesses in the US with $10 million or more in revenue has increased by 57% since 2002.

This suggests that for some women, there’s another force at work — something they gain that fuels their passion and sharpens their focus on accelerating growth. For many, that starts with the confidence to push boundaries to realize the full potential of their companies — confidence reinforced in a community of peers like Entrepreneurial Winning Women.

Women-owned businesses

57%

increase in the number of women-owned businesses in the US with $10 million or more in revenue since 2002.

“Communities are crucial to the success of all entrepreneurs for so many reasons: information flow, access to resources and general support and counsel,” says Pat Hedley, Managing Director of General Atlantic, a leading global growth investment firm. “Since women entrepreneurs are still fewer in number to men, building a network that can be such a community should be a high priority.”

What’s the advantage of finding community? The first benefit is the removal of self-imposed limits on what you can accomplish. For example, 70% of participants said they’re thinking bigger and setting higher company growth goals than their initial 30% to 50%. With increased confidence and momentum, many think up to 200% annual growth is possible.

Encourage. Collaborate. Cross-pollinate.

Hand-in-hand with role models, women entrepreneurs need peers. Sharing encouragement and ironing out issues with like-minded leaders means more, because it’s coming from people who appreciate where you’ve been and where you’re trying to go.

It is incredibly valuable to know that I have opportunities to talk through a business issue with women who may have encountered similar circumstances, or whose background might be helpful.
Dr. Rebecca Thomley
President and CEO, Orion Associates, Class of 2011

Phyllis Newhouse, President and CEO of Xtreme Solutions, Inc., says that as a company scales, “rather than pursue career contacts ... you are more concerned about finding worthy mentors and colleagues on the same path. That is an evolutionary process enhanced by high-level connections that have probably gone beyond what could have been imagined.”

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Adaptation 2

Become purpose driven

This simple statement of “why we do what we do” serves as the company’s North Star, guiding it in every aspect.

What do we mean by purpose? It’s a short statement that answers the question: Why do we do what we do? A purpose is always inspirational, aspirational and outward-facing. It gives a company a unifying theme and focus, extending to all its activities, stakeholder relationships and communications. A great purpose connects with people emotionally and is grounded in humanity.

Huge, well-known companies like IBM, Nike, Johnson & Johnson, Unilever  and General Electric are all examples of progressive global entities with a strong purpose — and the profits to match.

Moreover, recent studies have shown that a strong purpose drives growth and profitability. For instance, an investment in the Stengel 50 (a list of the world’s 50 highest-performing companies that have a strong purpose) over the past 10 years would have been 400% more profitable than an investment in the S&P 500.

Profibility

400%

more profibility on an investment in the Stengel 50 than the S&P 500 over the past 10 years

The reasons are twofold. Having an authentic purpose helps build strong relationships between brands and their customers, employees, suppliers, shareholders and even regulators, if applicable. Consumers, for instance, often pay more for and show more brand loyalty to, products that give them a sense they are doing good. And employees will go the extra mile for an employer when they feel inspired.

A purpose also helps drive trust and safety, which in turn foster collaboration and innovation. When an organization activates and lives its purpose, it builds trust with all of its stakeholders and a sense of safety for its employees.

These two factors are absolutely crucial for innovation. True innovation requires failure. Employees who trust their company feel safer trying new ideas and reaching beyond prescribed roles and established processes. And stakeholders who trust a company will accept its failures.

I think people feel our passionate purpose. I hear people say, ‘There is something different about your products.’ I believe it’s because they intuitively sense our authentic purpose.
Dr. Lisa Williams
Founder and CEO, World of EPI, Class of 2013

As a result, purpose-led businesses tend to have happier customers, more engaged employees and — if they are public companies — higher stock prices.

Sherry Stewart Deutschmann, Founder and CEO of LetterLogic, built her company on employee-centricity, establishing unusual levels of transparency and employee support. The result is uncommon worker loyalty that translates into extremely high customer satisfaction.

She tells us that what inspires her is “the knowledge that through our culture, we have created something that is a lot bigger than we are — than our company is. We are showing the world that you can put employees first and still take great care of your shareholders and the planet.”

Authenticity and activation

How do you activate a purpose? Understand other people’s perspectives and act accordingly using your purpose as your guide, then inspire your teams to do the same.

  • Be a democratic leader, not a monarch. Don’t make decisions in a vacuum — listen to your stakeholders.
  • Commit acts of graciousness. Acknowledge publicly — in person, if possible — when someone has done well.
  • Don’t act in command and control mode. Work together with your employees and other stakeholders to preserve trust.
  • Make sure all employees understand the company’s purpose and their role in achieving it. Every group within a company should have a purpose that is nested into the larger purpose.
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Adaptation 3

Evolve your leadership style

When a company grows, its leader needs to evolve too. Entrepreneurs need the self-awareness to know when they need to change their focus and how.

There are some leadership qualities that all successful entrepreneurs share: grit, perseverance and boundless curiosity. But in all prosperous companies, how they express those qualities and what part of the business gets their attention will evolve as the company hits its inflection point and then takes off.

That’s when we advise women entrepreneurs to start working on the business, not in the business. As their companies scale big, that concept becomes even more important and takes on new nuance: the necessity to transform as a leader and rethink your role.

To continue growing, entrepreneurs must become the leader the business needs for each particular stage of growth — and that requires introspection, self-awareness and a keen sense of strategy.

Strategic decision-making

8%

say they take a collaborative approach to strategic decision-making

What’s a leader for?

  1. Protect the culture. First and foremost, entrepreneurs need to make sure that what made them successful continues. They must sustain the core values and purpose that made employees and customers flock to the business in the first place.
  2. Anticipate the market. Great leaders make sure they’re spending time every day looking at where the market is headed. If they don’t, especially in this era of disruptive innovation, the business can very quickly become staid and even obsolete.
  3. Find the gaps. Doing a gap analysis on a regular basis helps a leader find out what needs to be addressed in order to take the necessary steps to correct course. Entrepreneurs should enlist the help of their management teams and boards to conduct an effective gap analysis. 
Talent is so key. I noticed that when CEOs hire right, the growth accelerates. To me it’s the most important thing — next to innovation for market disruption — to scale growth.
Allison O’Kelly
CEO and Founder, Mom Corps, Class of 2012

Entrepreneur, know thyself

Becoming a leader who is adept at finding and filling gaps, infusing purpose and innovating for the next market shift requires some introspection. Cultivating the self-awareness, confidence and great communication skills necessary to scale big may not come naturally to all entrepreneurs, but these are traits that can be developed.

Self-awareness. Leaders need to intimately understand their strengths and weaknesses. By enlisting the help of their customers, boards of directors and/or professional coaches, they can begin to illuminate any blind spots.

Confidence. If you don’t believe in yourself, you can’t expect anyone else to either. Confidence and the drive that comes with it are key takeaways from the Entrepreneurial Winning Women Program. As we mentioned, participants’ confidence in their business and communication abilities is high: 86% are very or highly confident in dealing with tough business issues and 88% say they are excellent or good at pitching their businesses.

Great communication skills. Wonderful leadership skills will not help much if the entrepreneur can’t effectively communicate her vision, purpose and strategy. To scale big, entrepreneurs must be able to motivate and inspire their customers, investors, employees and even the general public.

Summary

Our research reveals three noteworthy adaptations that are contributing significantly to accelerated growth in women-led companies.

About this article

By

Lisa Schiffman

EY Global Director and EY Entrepreneurial Winning Women™ Leader

Strategic marketing and communications leader. Passionate advocate for entrepreneurs and gender parity.