Numbers Show Women-Led Companies Outperform Competitors

Hiring women to top leadership positions is not just the right thing to do, it’s also good for business.

Time and again, studies are showing that companies where women are equally or even overrepresented in the C-Suite are outperforming their peers.

Take this provocative recent analysis from Boston-based trading firm Quantopian. Between 2002 and 2014, researchers compared the returns of Fortune 1000 companies led by female CEOs to those of the S&P 500. During that time period, the companies with women at the helm saw returns that were 226% higher.

The future of business lies in recognizing the merit of women in leadership roles—and capitalizing on this known, demonstrated advantage. While it’s not a universal truth that every company led by a woman will outperform its male-led competitors, there is clearly a trend at work here. So why are women-led companies more effective?

In 2015, the Journal of Organizational Behavior published a study showing that women-led teams were more collaborative, communicative and open to learning—even when managed across remote locations. This type of data suggests that these women-led companies foster a more effective corporate culture that leads to success.

Also read: The Seven Deadly Myths About Women in Business

When compiling our Ivy Exec ranking of the top women-led businesses to work for, we read through hundreds of employee reviews to evaluate each company. What we found, time and time again is that the success of these companies often came down to the ways in which management communicated with and supported its team. In other words, these companies were all living examples of how communication and collaboration can drive returns, just as the study showed.

Arlington, Virginia-based Dynamic Pro Inc. is a consulting firm that specializes in technology. Led by CEO Andrea Stone, the company prides itself on its high-touch relationship with clients and its ability to deliver innovative results efficiently.

But for employees at this top, disruptive firm to work for, the Dynamic Pro culture is what drives results.

“I love having a boss who is an empowered female,” a current employee with the company says. “I also love the camaraderie that exists among my colleagues. The management supporting our CEO is helpful and approachable and not afraid to stand up for employees.”

A current senior manager echoes this sentiment: “The culture of this company promotes valuing each and every employee, and ensuring a good work environment is provided. Everyone in the organization has a team-first approach that enhances employee morale.”

Across the country, in Oakland, California, health food company Nona Lim also prioritizes a creative and communicative work environment for its employees. Founder and CEO Nona Lim herself created the company as a one-woman-band in 2006. She was a former pro athlete who looked to power her performance with clean nutrition. Word spread of her delicious but nutrient-packed meals and soon, she was shipping her products nationwide.

Over the last decade, Nona Lim has grown dramatically and now employees 15 people—and counting. Yet again, this woman-led company has managed to create a culture that’s just as healthy as the food it sells.

“The culture is very open, collaborative, and cohesive. There is a strong sense of the importance of doing what is right at all times,” a current manager at Nona Lim tells Ivy Exec. “It is clear that we are all meant to do our best work at all times and that our input and feedback is valued.”

Of course translating an open and collaborative corporate culture becomes exponentially harder as a company grows and scales. However, New York-based healthcare consulting group CBPartners has still managed to retain its culture of openness and positivity with upwards of 50 employees spread in offices across three countries.

“The culture is collaborative and energetic,” a current manager tells Ivy Exec. “The firm has employees with a range of academic, professional, and personal backgrounds (including many with international backgrounds), which fosters a diverse and open environment. Projects are challenging and stimulating, and teams are constantly formed and re-formed — which means that over time you work closely with many people (vs. constantly working at an arm’s length with many).”

Managing director Monica Martin de Bustamante helps lead the team with her impressive background and expertise in pharmaceutical markets. Under her direction, employees rave about the senior leadership’s approachability and support.

It’s a very open atmosphere. Everyone is approachable and accessible regardless of title or position. There is a relatively good work-life balance. People are incredibly intelligent and interested in healthcare – which makes for interesting and engaging discussions in the workplace,” a consultant at CBPartners reports. “Also, because it is a small company, there is a focus on pursuing and driving your own interests, even if it is not yet a priority of the company.”

Throughout our extensive review of women-led businesses, we were impressed to find that these trends of openness and collaboration transcended the size of the companies we profiled and even what industries in which they operate. What mattered time and time again in achieving an effective corporate culture that can routinely deliver results was having empowered women in leadership positions.

Also Read:
Top Women-Led Businesses to Work For