Marina Gorbis's Blog, page 1544

Nice or Tough: Which Approach Engages Employees Most?

It's probably no news to most people who work that poor leaders produce disgruntled, unengaged employees. Our research also shows convincingly that great leaders do the opposite — that is, that they produce highly committed, engaged, and productive employees.

And the difference is cavernous — in a study of 160,576 employees working for 30,661 leaders at hundreds of companies around the world, we found average commitment scores in the bottom quarter for those unfortunate enough to work for the worst leaders (those leaders who had been rated in the bottom 10th percentile by their bosses, colleagues, and direct reports on 360 assessments of their leadership abilities). By contrast, average commitment scores for those fortunate enough to work for the best leaders (those rated in the 90th percentile) soared to the top 20th percentile. More simply put, the people working for the really bad leaders were more unhappy than three quarters of the group; the ones working for the really excellent leaders were more committed than eight out of ten of their counterparts.

What exactly fosters this engagement? During our time in the training and development industry we've observed two common — and very different — approaches. On the one hand are leaders we call "drivers"; on the other, those we call "enhancers."

Drivers are very good at establishing high standards of excellence, getting people to stretch for goals that go beyond what they originally thought possible, keeping people focused on the highest priority goals and objectives, doing everything possible to achieve those goals, and continually improving.

Enhancers, by contrast, are very good at staying in touch with the issues and concerns of others, acting as role models, giving honest feedback in a helpful way, developing people, and maintaining trust.

Which approach works best? When we asked people in an informal survey which was most likely to increase engagement, the vast majority opted for the enhancer approach. In fact, most leaders we've coached have told us that they believe the way to increase employee commitment was to be the "nice guy or gal."

But the numbers tell a more complicated story. In our survey, we asked the employees not only about their level of engagement but also explicitly, on a scale of one to five, to what degree they felt their leaders fit our profiles for enhances and drivers. We judged those leaders "effective" as enhancers or drivers who scored in the 75th percentile (that is, higher than three out of four of their peers) on those questions.

Putting the two sets of data together, what we found was this: Only 8.9% of employees working for leaders they judged effective at driving but not at enhancing also rated themselves in the 10% in terms of engagement. That wasn't very surprising to many people who assume that most employees don't respond well to pushy or demanding leaders. But those working for those they judged as effective enhancers were even less engaged (well, slightly less). Only 6.7% of those scored in the top 10% in their levels of engagement.

Essentially, our analysis suggests, that neither approach is sufficient in itself. Rather, both are needed to make real headway in increasing employee engagement. In fact, fully 68% of the employees working for leaders they rated as both effective enhancers and drivers scored in the top 10% on overall satisfaction and engagement with the organization.

Clearly, we were asking the wrong question, when we set out to determine which approach was best. Leaders need to think in terms of "and" not "or." Leaders with highly engaged employees know how to demand a great deal from employees, but are also seen as considerate, trusting, collaborative, and great developers of people.

In our view, the lesson then is that those of you who consider yourself to be drivers should not be afraid to be the "nice guy." And all of you aspiring nice guys should not view that as incompatable with setting demanding goals. The two approaches are like the oars of a boat. Both need to be used with equal force to maximize the engagement of direct reports.

You've Been Fired: Now What?

You've just received word that you've been fired. Or perhaps the company has gone through a re-structuring and eliminated your job — and you've been told that none of the managers you've worked with over the years have a position for you on their team. This comes as a shock to your system, especially if you've enjoyed a record of success up to this point in your career. While there are some practical things to attend to — negotiating your severance, signing up references, and agreeing with the company on a storyline about the reason for your exit — your most important action item is managing your own attitude to the situation.

Your first step is realizing that you're not alone. Although they don't trumpet the fact for obvious reasons, most successful senior executives have hit speed bumps in the course of their careers. As search consultants will tell you, experiencing a setback doesn't have to be terminal — if you're able to move forward productively.

As you dust yourself off, think through those parts of the situation you need to own. In a highly emotional state, it's too easy for you to curse the darkness: "I had a bad boss." "The place was rife with organizational politics." "My colleagues were non-cooperative and had it in for me." There may be some truth to this, but you also need to ask yourself, "What do I need to accept about the experience to avoid making the same mistakes so I can succeed in the future?"

Even in the best of times, the vast majority of organizations do a poor job of giving people constructive feedback, and companies are even less inclined to provide useful feedback when showing someone the door. Still, think carefully about the messages you have received, however oblique, to see if you can identify issues you need to be alert to. For example, if you developed a reputation for having sharp elbows and were too frequently involved in unresolved conflict with people from other departments, you may well need to improve your skills in influence, collaboration, and conflict management. If you tend to be a perfectionist and were overwhelmed by the sheer volume of deadlines and tasks, you may need to work on delegation and building a team you can rely on.

Or perhaps the problem was not so much one of lack of skills as of fit. If you found yourself frustrated by the organization's constant demands for quick, one-off solutions unlikely to add value over the long term, you may be a "craftsman" who'll do better in a slower-paced company where management values well-designed and thoroughly integrated programs. Or if you found that constantly communicating and vetting your ideas in a large, bureaucratic organization was tedious, perhaps you should consider a smaller, more entrepreneurial company.

Once you've gleaned the two or three key lessons you should draw from your experience, move forward and don't wallow in self-doubt or what might have been. You don't want to ignore important messages about what will be required to succeed in your next job or that will help you target the best type of organization. However, your most valuable commodity is self-confidence. so don't let that be eroded. As painful as your departure may be, with the right attitude and reflection you'll take away some important lessons that can give direction and focus to the rest of a highly successful career.

How Corporate Venture Capital Helps Firms Explore New Territory

A good idea faces so many obstacles en route to market today that it's a wonder we have any innovative products at all. You know those baby sea turtles that get eaten by birds and crabs on their way from the nest to the water? It's like that.

Corporations have narrowed the focus of their R&D by pressing for clear, short-term wins; venture capitalists are too quick to get caught up in the latest, hottest thing; and even the vaunted crowdfunding option is pretty limited: It's great if you're an internet star, but try getting a crowd excited about an innovative idea in industrial machinery.

It doesn't have to be this way. Effective means of boosting innovation already exist, but not enough companies are making use of them. Two in particular are corporate venture funds, which invest in start-ups outside companies' walls, and internal idea contests. I'll describe both, but first let's look at what's wrong with some of the traditional sources of innovation.

Corporate R&D too often focuses on refining technologies that are already in use. You can see why: For decades in the U.S., billions were spent on big science, and the commercial returns were disappointing. But cutting back on research funding doesn't work either. In the 1990s, Eastman Kodak cut its R&D spending and focused on film, a technology that was clearly successful (you know where this is going); and in the 2000s, Nokia focused on maintaining its strong position in low-end phones (you know where this is going too — Kodak filed for bankruptcy, and Nokia, whose phone business is now being bought by Microsoft, suffered from having missed the smartphone wave). Even in companies that are diligent about looking to the future, R&D has a tendency to be slow, rigid, and expensive.

Independent venture capital is a vital force in funding start-ups, but VCs tend to have a narrow focus on certain industries and geographies. Their funding cycles are volatile, too — it's either feast or famine — and they expect returns within a few years.

Crowdfunding has undeniable power, but rather than solve the problems of venture capital, it exaggerates them. The glamorous projects inevitably get the bulk of the funding, while more experimental, more complex, and more pedestrian projects lose out. If VC is "unfair," crowdfunding is even more unfair.

Corporate venture capital can avoid some of these problems. A corporate venture-capital fund can often do a better job than corporate R&D of exploring new territory, and at the same time, it can move more quickly, flexibly, and cheaply than traditional R&D. In the 1990s and 2000s, for example, several corporate-venture initiatives helped pharmaceutical companies catch up with rapid advances in bioscience that were threatening to undermine the value of their well-established expertise. And corporate venture funds, if well managed, can avoid the fickleness problem that plagues independent venture capital and crowdfunding.

Many large companies have been wary of corporate venturing, because they've seen such funds deployed ineffectively. And it's true that if companies aren't careful, their internal venture capitalists can become entangled in the agendas of various corporate stakeholders or demotivated by inadequate or poorly designed financial incentives. That's why it's important that venture funds' goals be aligned with corporate objectives, approvals for funding be streamlined, and compensation levels match those offered by independent venture groups. Companies that fail to provide adequate incentives face a steady stream of defections; after too many board meetings in which the corporate investor parks his Fiesta next to the independent venture capitalist's Ferrari, the temptation to go elsewhere becomes too great.

Contests are at the opposite end of the size and cost scales from venture funding, but they can be an effective complement to a corporate innovation program. Companies should consider offering rewards for people who solve internal problems or create new products. It's important to have a specific goal at the outset, and the rewards should be meaningful, but they don't always have to involve cash. Recognition is a powerful reward too.

These two very different approaches aren't the only ways to improve innovation, of course, but they're particularly cost-effective as well as powerful in tapping the best aspects of both venture capital and the traditional corporate R&D approach. They demonstrate that with experimentation and ingenuity, even the most intractable problems are surmountable. They illustrate the range of programs that companies should be implementing to stimulate innovation and shepherd ideas toward marketable products.

Executing on Innovation
An HBR Insight Center





Innovation Isn't an Idea Problem
Five Ways to Innovate Faster
Ready to Innovate? Get a Lawyer.
Just How Valuable Is Google's "20% Time"?

Why Is Innovation So Often Synonymous With Disappointment?

Because a pure idea is a beautiful thing, and seeing it get mauled as it struggles to become something real can be highly disappointing. It's painful to see your "bridge to the moon" end up as a mere woodshed.

Welcome to HBR's new Insight Center: Beyond the Breakthrough: Executing on Innovation. This four-week series addresses the reality problem that always besets great ideas, and our thesis in curating it is that reality isn't a problem — or at least it doesn't have to be. We believe that reality too can be a beautiful thing, although, granted, it's more of an acquired taste.

We'll take a close look at the execution aspects of innovation. In other words, you've birthed the breakthrough idea — now what? How do you nurture it, raise it, put it on its own two feet? How do you make sure it has an impact on the world? We'll draw on a range of writers with a range of insights.

Ethan Mollick of Wharton will reveal the overlooked value of individual middle managers in executing on innovation. The best project managers, he writes, have a "magical" impact; companies need to do a better job of supporting and encouraging them. Scott Anthony will show how organizations can improve an idea's chances by ensuring full commitment to innovation. Josh Lerner of Harvard Business School urges companies to look beyond the usual R&D approach to consider becoming corporate venture capitalists themselves, a point he expands on in his article "Corporate Venturing" in the October 2013 issue of HBR.

Bart Barthelemy and Candace Dalmagne-Rouge of Wright Brothers Institute argue that execution is inextricably tied to identifying the right problem to solve, and they show how people as varied as illusionists and set designers can help an organization gain insights from beyond the corporate world. Gary Hamel will explore how companies build their innovation engines.

We'll also look at how organizations are using crowdfunding internally to bring their new ideas to life, as well as the qualities that help great entrepreneurs execute on their ideas.

Turning innovative ideas into new products and services isn't easy, and there is no one-size-fits-all strategy for doing so. But there are insights that can help you travel the rocky road of executing on innovation, and raise your odds of success. We look forward to sharing some of those with you and hearing your views on what it takes to turn innovative ideas into reality.

Executing on Innovation
An HBR Insight Center





Innovation Isn't an Idea Problem
Five Ways to Innovate Faster
Ready to Innovate? Get a Lawyer.
Just How Valuable Is Google's "20% Time"?

It Takes Purpose to Become a Billionaire

What do billionaires have in common? What is it that they do better than anyone else? Why do we admire them, or their companies' products and services, so much?

I've spent some time trying to identify common traits in the Forbes list of billionaires and other similar lists of the world's wealthiest. I'm particularly interested in finding patterns in the types of people whom I respect. It's less about all that dough they've accumulated than about better understanding how and why they made their fortunes.

It turns out there are many ways to make a billion dollars: real estate, investing, gaming and entertainment, retail, technology, and good old-fashioned inheritance. But the most interesting (and most respected) businesses and personalities are also the ones with the strongest and most authentic purposes behind them. My business partner, Mats Lederhausen, was one of the first advocates I knew of purpose-driven business and entrepreneurship. I credit Mats with helping me understand that purpose is neither something soft nor something overly lofty. Instead, purpose is the bigger why of a business. All of us understand the what of any successful business, but what about the why?

While billionaires and their companies are bucket companies by industry (i.e. the what of the company), I believe that there are three categories of purpose that are interesting to observe, and consider which one dominates your company's mission. Here they are:

1. Making the world more beautiful.

2. Making the world more fun.

3. Making the world more efficient and smart.

1. Making the world more beautiful. These are the people who make us look, eat, and live more beautifully. It is a broad definition of outer and inner beauty. The best are able to make us look and feel good. The beauty category of billionaires includes the larger-than-life fashion figures of Ralph Lauren, Bernard Arnault (of LVMH), and recently minted billionaire Tory Burch. It is actually quite amazing to see how many of the world's richest come from the fashion, retail, and design worlds. And then there are those who aren't explicitly in the design, style, or beauty business but nonetheless identify strongly with these themes. Apple, of course, is the poster child for this ethos, as it puts design first for everything from its software to the industrial engineering of products. For Apple, it is not just design that matters — what's paramount is using design to connect to the user.

Beyond beauty sensed with our sight and touch, there are the founders in this category who have focused on our inner beauty and health. Indeed, there are people like Hamdi Ulukaya (the Turkish founder of Chobani Greek Yogurt) or the founders of a variety of biotech and pharmaceutical firms who have achieved this through focusing on the purpose of healthier ways for us to eat and live.

2. Making the world more fun. One name that springs immediately to mind is Richard Branson. His mission and purpose center around fun and play. Disney is another icon that has redefined the entertainment experience. But perhaps my personal favorite of a billionaire founder who has spread his creative fun around the world is Cirque du Soleil founder Guy Laliberté. Making the world more fun is noble and creates greater happiness for us all. The billionaire founders who get this and who have succeeded in doing so help to put more smiles, more laughter and yes, more fun into a world that is too often dull and mundane. Fun is a good business model -- and it does not need to be a billion-dollar enterprise. It is perhaps because it is relatively easy to think of small ways to create fun that it is even more impressive when people such as these are able to scale fun on a massive level.

3. Making the world smarter, more efficient, and more relevant. There are more "knowledge workers" today than ever before. In this world, we have all become familiar with the technology and Internet moguls (e.g. Larry Ellison, Bill Gates, Sergey Brin, and Larry Page) who have helped to make us smarter, faster and more efficient in our daily lives. Doing work via shared Google Docs versus a word processor versus a typewriter — yes, we've come a long way. The connected social economy and its companies like Facebook and LinkedIn are all about how we can try to do more, faster. That is, these companies allow us to have more communication moments in ever-shorter time segments. And there are also information and media moguls, like Mike Bloomberg or the Thomson family behind Thomson Reuters, who dominate financial and legal information, respectively, and are viewed as being mission critical to professionals in those fields. As these firms enable more, faster, and smarter throughput of information, a challenge will be to maintain relevancy. As more and more information is thrown at us, we are now ironically often seeking less and less of it. And this is perhaps what the next great wave of tech and info billionaires will address — as curators whose purpose will be to find greater meaning, context, and relevancy in this mass information world.

So, while there are many ways to make money, there tend to be some common patterns of higher purpose. The three purposes illustrated here help explain why and how some of the world's wealthiest have have gotten so rich, and made our lives richer as well. These three purpose categories likely blur at times, and certainly co-exist in terms of the culture and value propositions of the truly great companies. But the take-home lesson is to ask yourself which of these purposes you are willing to strive to become the absolute best at. Companies and founders that make a singular and unwavering commitment to excel along any of these three purpose dimensions not only have the chance to make our lives better, but also to leave an imprint on our culture, on how we view and experience this world. That, and they might just end up as billionaires.

Weighing the Value of an Infantry Soldier's Life

In substituting heavily armored combat vehicles at a cost of $170,000 each for lighter, $50,000 vehicles during the 2000s, the U.S. Army reduced infantry deaths by 0.04-0.43 per month at an estimated cost per life saved that is below the $7.5 million commonly accepted "value of a statistical life," say Chris Rohlfs of Syracuse University and Ryan Sullivan of the U.S. Naval Postgraduate School. However, the Army's subsequent replacement of about 9,000 of those new vehicles with even more heavily armored vehicles, costing $600,000 each, did not appreciably reduce fatalities and was not cost-effective for less-active infantry units, according to the researchers' analysis of Army data.

Apple's New iPhone 5C and 5S: the Results of Creativity or Innovation?

Every idea, no matter how ingenious or successful, will eventually need to be replaced with a new one. But business leaders, as human beings above all, tend to cling to their existing ideas, beliefs, and other mental models — or what we call boxes — longer than they should. For instance, Henry Ford famously insisted on continuing to manufacture the Model T long after his competitors were creating dazzling new automobiles that significantly cannibalized sales of his once bestselling car.

When Apple first created its highly disruptive, history-making iPhone, the company unleashed years of innovation not just in its phone offerings, but in a seemingly infinite stream of related accessories and applications. The release this week of Apple's long-awaited iPhone 5C and 5S should offer business leaders everywhere a vivid reminder of the distinction between paradigm-shifting "creativity" and the "innovation" that often follows. Creativity and innovation are two separate processes — both important, but not identical.

Creativity can be defined as people's ability to change their perception of reality; by doing so, they can then create new ideas, hypotheses, approaches, and other "boxes." Apple couldn't come up with the original iPod, for example, until its leaders changed their mental boxes regarding what a portable music player was — from the Sony Walkman to one associated with a broader ecosystem. The iPhone was not the first mobile phone, but it fundamentally changed the box of what a mobile phone could be (as Apple also did with the iPad and mouse).

Innovation can be defined as a change in reality. In other words, innovation means taking an existing idea or box, such as the idea for a new product, service, or business model, and turning it into reality (for example, by manufacturing the product or implementing the business model). Once the first iPhone was developed, Apple was free to create all sorts of new features for and iterations of the iPhone and iPad — encouraging customers to change their own understanding of the products' possibilities.

Incremental innovations — think of BIC introducing double-bladed or triple-bladed razors once they were already in the razor business — do not require the creation of a new box. But transformational innovations — such as when BIC transformed itself from a pen manufacturer to a company that makes all sorts of disposable plastic objects, including pens, razors, lighters, calling cards — do require a new box.

The development of the earliest lanterns and light bulbs was based on the assumption that "light is created by burning something." Once this box was established, engineers innovated by trying different materials, such as various wicks or oils, to improve the quality and duration of the light. Only when Thomas Edison shifted his, and the world's, perception to embrace a new box — that light is created by preventing something (the filament) from burning — could he then create the first incandescent light bulb.

In creating the new iPhone 5C and 5S, did leaders at Apple have to change some of their most fundamental perceptions of the company and the products and services it provides? Put differently, did Apple create a whole new box or did it use its legendary R&D skills to innovate further?

One thing is clear: no matter how robust and dominant this technology is today, eventually the iPhone and its ecosystem, and the ideas and assumptions underlying them, will need to be reexamined and replaced. And just imagine the tremendous new opportunities and offerings that Apple will provide the world when it does so!

Six Principles for Developing Humility as a Leader

Whether we're looking at business or politics, sports or entertainment, it's clear we live in an era of self-celebration. Fame is equated with success, and being self-referential has become the norm. As a result we are encouraged to pump ourselves full of alarming self-confidence. Bluster and the alpha instinct, contends Tomas Chamorro-Premuzic, professor of business psychology, often get mistaken for ability and effectiveness (at least for a while). It may well be why so many (incompetent) men rise ahead of women to leadership positions, as Chamorro-Premuzic argued in a recent HBR post.

Yes, we have scores of books, articles, and studies that warn us of the perils of hubris. The word comes from the Greek and means extreme pride and arrogance, generally indicating a loss of connection to reality brought about when those in power vastly overestimate their capabilities. And yes, many of us have also seen evidence that its opposite, humility, inspires loyalty, helps to build and sustain cohesive, productive team work, and decreases staff turnover. Jim Collins had a lot to say about CEOs he saw demonstrating modesty and leading quietly, not charismatically, in his 2001 bestseller Good to Great.

Yet the attribute of humility seems to be neglected in leadership development programs. And to the extent it is considered by managers rising through the ranks, it is often misunderstood. How can we change this?

First, let's get a few things straight. Humility is not hospitality, courtesy, or a kind and friendly demeanor. Humility has nothing to do with being meek, weak, or indecisive. Perhaps more surprising, it does not entail shunning publicity. Organizations need people who get marketing, including self-marketing, to flourish and prosper.

Hubris, meanwhile, is not a fair label to apply to any person who thinks differently and has the courage to assert or act on their convictions. Studies show, however, that serious problems emerge when robust individualism commingles with narcissism — another term for which we can thank the Greeks (whose demigod Narcissus fell in love with his own reflection). Narcissism combines an exaggerated sense of one's own abilities and achievements with a constant need for attention, affirmation, and praise. While the label tends to be applied loosely to anyone behaving in a self-absorbed way, psychologists know narcissism to be a formal personality disorder for some, and a real impediment to their forming healthy relationships. The narcissist lacks self-awareness and empathy and is often hypersensitive to criticism or perceived insults. He or she frequently exaggerates contributions and claims to be "expert" at many different things. If you are part of an organization with a leader exhibiting such characteristics, you have a problem. (Executive search firms and hiring committees beware.)

But beyond refusing to hire or promote such extreme cases, can and should organizations try to cultivate more humility in their leadership ranks? How would that goal take shape in the context of a formal leadership development program? As a starting point, we would suggest a curriculum designed around six basic principles. If you're a developing leader, you should be taught to:

Know what you don't know.

Resist "master of the universe" impulses. You may yourself excel in an area, but as a leader you are, by definition, a generalist. Rely on those who have relevant qualification and expertise. Know when to defer and delegate.

Resist falling for your own publicity.

We all do it: whether we're writing a press release or a self-appraisal, we put the best spin on our success — and then conveniently forget that the reality wasn't as flawless. Drinking in the glory of a triumph can be energizing. Too big a drink is intoxicating. It blurs vision and impairs judgment.

Never underestimate the competition.

You may be brilliant, ambitious, and audacious. But the world is filled with other hard-working, high-IQ, and creative professionals. Don't kid yourself that they and their innovations aren't a serious threat.

Embrace and promote a spirit of service.

Employees quickly figure out which leaders are dedicated to helping them succeed, and which are scrambling for personal success at their expense. Customers do, too.

Listen, even (no, especially) to the weird ideas.

Only when you are not convinced that your idea is or will be better than someone else's do you really open your ears to what they are saying. But there is ample evidence that you should: the most imaginative and valuable ideas tend to come from left field, from some associate who seems a little offbeat, and may not hold an exalted position in the organization.

Be passionately curious.

Constantly welcome and seek out new knowledge, and insist on curiosity from those around you. Research has found linkages between curiosity and many positive leadership attributes (including emotional and social intelligence). Take it from Einstein. "I have no special talent," he claimed. "I am only passionately curious."

We can't imagine that an individual exposed to the six principles above and encouraged to take them to heart could become anything but a better leader.

But meanwhile, assuming your organization isn't already helping its leaders develop such habits of mind, let us leave you with two humble, and humbling, suggestions. First: subject yourself to a 360 review. Anonymous feedback from the people who surround you may constitute a mirror you won't love gazing into, but as Ann Landers wrote: "Don't accept your dog's admiration as conclusive evidence that you are wonderful." 360 feedback pays off in two ways. It shows you how your self-perception deviates from others' perception of your leadership. (And in leadership, perception is reality.) And it gives you a valuable practice in receiving feedback and turning criticism into a plan for growth and development.

Second, get a coach. We all have blind spots, and there's certainly no shame in getting help with them. Fast Company reports that 43% of CEOs and 71% of Senior Executives say they've worked with a coach. And 92% of leaders being coached say they plan to use a coach again.

Resolve to work on your own humility and you will begin to notice and appreciate its power all around you. In a recent meeting we convened in Los Angeles, the accomplished Chairman and CEO of a major Hollywood studio shared the benefit of his experience with 20 young professionals and students. What did this leader emphasize with the group? He spoke of his own failures, weaknesses, and blind spots, and how they had spurred his learning and success. The fact that he spoke about himself in this way deeply impressed the group. He projected convincing self-confidence, authenticity, and wisdom.

He was a convincing example of the kind of leader our organizations should be trying harder to develop — the kind that knows it's better to develop a taste for humility now than be forced to eat humble pie later.

Female Entrepreneurs Go Beyond "Cookies and Crafts"

In the 1990's, if you asked most women business owners what their dreams were, they'd say they just want to be able to support themselves and their families. The times have changed. Today, women have bigger dreams and seek to grow their businesses to the maximum level. However, many are still saddled with an outdated perception about their roles in business and contributions to the economy, despite tremendous growth over the past decade.

The old perception is that women-led and -owned businesses are micro-enterprises; companies run out of the home with fewer than five employees. But most women outgrew the "cookies and crafts" stereotype a long time ago, and have their sights set on bigger goals. Many have found success in industries like technology, mining, and construction.

Progressive thinking is being pushed forward by new data that showcases the undeniable impact of women-led and -owned businesses on the economy. Consider these datapoints:

American Express OPEN's latest Growing Under the Radar report details just how strong these businesses have been over the past decade. Perhaps the most surprising data is that women-led and -owned businesses experienced 57% growth in revenue of $10 million or above. That is actually a growth rate of 47% more than their male counterparts. This data is even more impressive in the context of a down economy: women-led and -owned businesses continued to grow throughout the recession, as companies around the world had to tighten their belts to weather the storm. The same report indicates that health care, social assistance, and education are industries in which the growth of women's ownership has been the strongest.
The membership of the Women Presidents' Organization (WPO), a nonprofit peer-advisory group for women with $2MM-plus gross revenue, itself accounts for $19BN in aggregate revenue and over 142,000 jobs, stemming directly from its 1,700+ female business leaders. In the WPO, the largest number of businesses are in manufacturing and distribution and 25% of members generate over $10 million annually.
Forbes called 2013 the "Year of the Female Founder." As female entrepreneurship gains steam, interest from venture capitalists will grow as well. There are now a number of investment groups, like Golden Seeds, that specialize in funding and empowering women-led businesses.

It makes sense that we're seeing such a tremendous growth rate for women-led and -owned businesses at this particular time in history. In 1977, only 4.5% of privately held businesses were owned by women. Those businesses were mainly in fashion, fitness and beauty. Today, the greatest number of multimillion-dollar women-owned businesses are in wholesale trade (20%), finance/insurance (12%), and transportation/warehousing (11%).

Over the last decade, women-led and owned businesses generating more than $1 million have grown 31%. That number would be even greater if businesses owned 50/50 by male and female partners and businesses with financial investors were included in census data.

With so many women-led and -owned businesses reaching such lofty benchmarks in the last decade, the stereotypes about female business leaders are thankfully beginning to wear thin. As more women ascend the corporate ladder or build their own businesses from the ground up, they'll bring even visibility to the success of women throughout business.

Strategic Humor: Cartoons from the October 2013 Issue

Enjoy these cartoons from the October issue of HBR, and test your management wit in the HBR Cartoon Caption Contest at the bottom of this post. If we choose your caption as the winner, you will be featured in next month's magazine and win a free Harvard Business Review Press book.

"Watch yourself out there. This guy looks like he means business."

Mick Stevens

"We don't expect you to be married to your job, but the odd date might be nice."

Susan Camilleri Konar

"Hey, Frank, hold up. I stapled the wrong list of grievances to your forehead."

PC Vey

"All booty, ill-gotten or otherwise, must be declared as income."

Michael Shaw

And congratulations to our September caption contest winner, Tim Dean of St. Louis, Missouri. Here's his winning caption:

"Hope you like decaf."

Cartoonist: Paula Pratt

NEW CAPTION CONTEST

Enter your own caption for this cartoon in the comments field below — you could be featured in next month's magazine and win a free book. To be considered for the prize, please submit your caption by Thursday October 19, 2013.

Cartoonist: Paul Kales