This post was originally published in Harvard Business Review. I changed the title, here.
At a recent baby shower, along with the 35 or so assembled guests, I was asked to write down a specific wish for the newborn girl: “I hope you grow up to…” Predictably, most of the advice was along the lines of “become a good person” or “realize your dreams.”
I felt oddly self-conscious as I wrote: “I hope you grow up to become a CEO.” Even as a female CEO, stating this goal publicly felt like a jarring contrast to all pretty pink ribbons and lacy cupcakes at the party. But I also felt obligated to suggest this possibility because it might not occur to anyone else.
Of course, the other women in the room were also sincerely invested in the little baby’s success and potential. Many hold deeply satisfying careers themselves. But they know, at least subconsciously, that 42 years after the Title IX legislation sent American women in droves onto the sports field and then directly to dominance in higher education, only 4.6% of Fortune 500 CEOs are women. This compares to the 0.5% in 1990 and 0.2% in 1974, just two years after the Title IX amendment.
This utter failure in breaking the glass ceiling is not for a lack of trying. Sweeping affirmative action legislation, media attention, and parental ambition have been energetically directed at creating a meritocracy in business. Our daughters excel in the classroom, on the soccer field, and in dinner table debates with their brothers. And yet the basic truth is that business is not yet really a co-ed sport.
It’s become increasingly clear we are attacking this issue at the wrong level. The proverbial glass ceiling is a red herring. By the time a glass ceiling is in place, it is far too late to change the trajectory or culture of a company. Sending each new wave of ambitious young women into the workforce to compete in businesses that were uniformly founded and shaped by men has become borderline sadistic.
Instead, we need to look at the very creation of business. The proverb “an ounce of prevention is worth more than a pound of cure” applies to business formation. When women start companies they quite naturally create more permeable and diverse management teams, having worked on gender diverse teams, or, conversely, having seen the pitfalls of being the token woman in a homogenous grouping. Furthermore, as more women create companies, they will spin out other women founders, and demonstrate a different way of doing things.
Unfortunately, it’s become convenient to suggest that women are not suited to found high potential companies because their pursuit of STEM degrees is declining. According to the National Center for Women and Information Technology, women pursuing undergraduate computer science degrees have dropped from 37% to 18%, from 1987 to 2012, respectively. There has also been a 5.2% drop, from 2004 to 2009, in female engineers. Overall, there is a serious rate of attrition in STEM-related jobs, with 56% of women leaving by mid-career to do something entirely different. This is a very disturbing trend for corporate America, further damaging efforts to effect change for female participation.
But this decline, while troubling, is largely irrelevant to entrepreneurship. Even in technology startups, success is more often about applying technology to attack business opportunities, rather than creating the technology itself. For many of the very largest market opportunities, technology is merely an enabler. It can be hired or bought.
The fundamental roadblocks to the success of more high potential enterprises founded by women entrepreneurs are inadequate access to capital and lousy media coverage of potential role models. According to a recent Stanford study, women are only getting 4.2% of venture capital. And those VCs are hardly immune to the relentless reinforcement of gender stereotypes in the business press. One reason for this imbalance is crystal clear: only 4% of investing VC’s are women, and this creates further disincentive for women to show up and pitch.
The good news is that when women do present in front of more diverse populations, they do just fine: Indiegogo reports that women secure 47% of crowdfunding capital, and the Center for Venture Research says the stat is 25% for angel capital. When the funders are more diverse, so too are the entrepreneurs who get funded.
Whenever I do public talks, I will have several young women come up to me to tell me how inspired they are by their first direct exposure to a female CEO. Imagine how powerful that influence could become if those women got to actually work for one. The impact on men would be equally profound. Old patterns can be broken.
Back to that little baby at the shower — I envision a world where she will be able to name 10 prominent female CEOs by the time she is 15. But it will only happen if we make sure those companies get founded by women today.