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Better together? 

The benefits of gender diversity for sustainable innovative start-ups

“Can you remember who you were, before the world told you who you should be?”

Charles Bukowski


“There is a special place in hell for women who don’t help each other.”

Madeleine Albright


  1. Introduction


This project focuses on the impact of gender diversity in sustainable innovative business start-ups. I have chosen to focus on innovative start-ups because, based on current research, this is an area where the contribution of women has great potential to enhance outcomes, perhaps due to inherent feminine characteristics and their interaction with male counterparts.


Of course, it is necessary to define terms, such as what is innovation and what are feminine traits. Similarly, the absence of evidence of successful, innovative startups with diverse or all female founders does not mean such an entity is not capable of success. It may just mean it has not yet been tried. In the same vein, what constitutes “success”?


I do not seek to prove gender diversity is a key factor in the success of an organisation. The evidence for such a view does not exist. What I can do is propose, and support with evidence, the known benefits of gender diversity and relate them to known deficiencies within the structure of innovative start-ups which have been monitored and for which metrics have been recorded.


2. Background


This investigation did not start well, I spoke to my old investment banking colleague, Philip Augar, author of “Chasing Alpha: How Reckless Growth and Unchecked Ambition Ruined the City's Golden Decade” (Bodley Head, 2009), a salutary tale of how the City’s macho culture of ego driven risk crushed the world economy. His response on the subject of gender diversity in start-ups:


‘I’m afraid this is beyond me… In the hedge fund world, most of the start-ups are all men. That probably tells you something!’


Following this inauspicious start, my search for mixed gender start-ups was ultimately successful, however, the all female start-up proved elusive. A member of the Judge Business School Entrepreneurship Centre said in twenty years of consulting he had only come across one or two all female start-up teams and during this period 80% of those he had mentored were male. This statistic replicates the make up of my EMBA cohort, which is 18% female. 


Why is this inequality persisting in 2019? At the time of writing, relatively speaking,  the FTSE 100 has 50% more female directors than the Cambridge start-up ecosystem, just over 29% of FTSE 100 Directors are female (GOV.CO.UK) and the 2019 MBA cohort at Harvard is 42% women. ( Using practitioner experience, I will attempt to explain why entrepreneurship is a relatively unattractive career choice for women and offer some suggestions which may encourage women  to consider it as an attractive, accessible career option. 


The motivation for this project has been my own business experience . In 1998 it was a female CEO who recruited me to my first board role. I have often wondered whether that role would have been so forthcoming if the CEO had been male. I have spent over two decades in the boardroom and my conclusion is diversity results in superior innovative decision making. In my experience,  mixed teams deliver more profitable resource deployment solutions, this is particularly advantageous in times of adversity. Mixed teams create a flourishing environment for talent development , strengthening corporate resilience and ultimately, in the long term, building better and sustainable business performance. In this project,  I will observe the process in practice and attempt to identify the correlations between gender and management team attributes/behaviours alongside resultant business success. 


In conclusion, I will discuss whether diversity truly matters or whether the benefit of mixed teams is only my personal experience. Regardless of whether mixed teams are superior, surely the growth of a female entrepreneurial culture can only be good news and to this end I will consider the potential implications for socio-economic policy, economic growth, business learning, the investor ecosystem and the business community as a whole . 


I believe an effective, creative board requires the right conditions. These conditions are an atmosphere of respect for the individual regardless of background, age, race or gender, where members feel able to be themselves and express themselves without reservation . In academic studies this is often described as psychological safety. What psychological safety looks like in practice is one of the things I will explore in this project and I will consider its relative importance based on gender.


By way of example, I put forward the task of pitching to potential investors. Last summer, I was lucky enough to facilitate on the University of Cambridge Judge Business School Ignite programme. Whilst looking after the pitching candidates I saw one very competent female biotech entrepreneur, who juggles a demanding professional career and family, physically shaking before her practice pitch, whilst some of her male cohort happily went for a fortifying pint to prepare. Is confidence or the fear of failure limiting the growth of female entrepreneurship or are there other factors at work?


3. What is Innovation?


The term innovation is part of popular parlance , however, what is innovation? The definition formulated by Stelios Kavadias in the EMBA Innovation Management course is innovation is: 


  • Something new

  • Which is Implemented

  • Is Economically useful 


To this list I would add social value, which I feel will become increasingly important as the fourth industrial revolution gains traction, a form of growth that improves the human condition rather than primarily focusing on Gross Domestic Product.


One of the earliest definitions of innovation by Schumpeter (1930) defines innovation as  “The successful commercial exploitation of new ideas”. The key word relevant to this project is exploitation. What are the critical factors necessary to achieve successful exploitation and is exploitation further enabled by team diversity ? 


Innovation is about spotting opportunities and creating value from those opportunities. Peter Drucker (1985) considered the potential for exploiting innovation opportunities arises when there are :


  • technological advancements create new information 

  • government policy, political or socio economic change create a resource value arbitrage opportunity 

  • the ability to plug an information gap in an imperfect market


All Drucker’s innovation opportunity criteria are available now and strengthening by the day. As I write this project we live in uncertain times for the UK economy, how do we future proof organisations for post Brexit world whilst tackling the challenges ahead created by the advent of the fourth industrial revolution. 

I believe it is up to us to exploit these opportunities to enrich our economy and address the increasing growth in inequality, in particular, to tackle two major dysfunctional aspects of our society, the housing shortage and the ageing population. 


How do we attempt to balance both innovation and corporate resilience? Risk taking and risk mitigation . Rogers (2003) in his book “Diffusion of Innovation”, considers innovation to be a critical indicator of new venture performance. I would like to extend this idea and look at organisational sustainability, possible solutions to achieve organisational resilience and longevity, both of which are often pivotal investor criteria . 


The focus on long term growth is paramount . Currently in the UK nearly 50% of SMEs fail to reach their fifth birthday (Richard Watson, Imperial College 2017). In this project I will attempt to identify some of the critical success factors for sustainable business innovation innovation and suggest how the input of women in top team management can impact sustainability.


4. Literature review


4.1 Creating a Feminine Trait Framework 


There is a considerable body of academic and practitioner literature on the role of gender in innovative business. Starting with this, I have formulated a feminine trait framework to highlight the important ingredients which could benefit a founder team, these traits are supported by academic and practitioner evidence. The framework can be found in Appendix 1, I identified five influential areas:


  • Social

  • Technical

  • Environmental

  • Financial

  • Strategic


4.2 Social Factors


4.2.1 Social Sensitivity 


Academic and practitioner literature describe the benefits of female social sensitivity in the business environment. Social sensitivity describes the proficiency with which an individual identifies, perceives and  understands both social cues and context whilst being  respectful. This is an important skill; high levels of social sensitivity can make you more well-liked and successful in social and business relationships. ( Business is smoother if you are well liked and  can respond to social cues which could offer a potential entree to identifying an untapped commercial niche or successful collaboration.


Eagly and Wood 1999 (cited Nadkami et al  2017) said in general, men tend to favour more assertive, controlling and action oriented behaviour whereas, in contrast, women tend to be more selfless, more caring for others and thus socially sensitive. Similarly, Hurst et al (1989) identified women’s ‘feeling’ cognitive style which aspires to social harmony and collectivism. Social sensitivity is advantageous in creating a supportive, cohesive team willing to share ideas.


The UK government backed Hampton Alexander Review 2018 contains a body of anecdotal evidence from female leaders suggesting male social sensitivity is, on occasions , in short supply . 


Here are some examples of male workplace behaviour reported in the review :


  • Men speaking over or dismissing the comments of female colleagues 

  • Taking credit for female colleagues ideas

  • A female impression that mediocre men reach high positions based on likeability

  • A prevalence of upsetting sexist banter

  • A feeling once pregnant some women are overlooked at work

  • A male assumption female colleagues will sort out HR matters and organise social occasions


The situation doesn’t improve at board level, the Hampton Alexander review 2016 reported some of the worst excuses made by FTSE 350 boards for not appointing women to their cohort . They included two particularly alarming anecdotes:


  • There aren’t that many women with the right credentials and depth of experience to sit on the board - the issues covered are extremely complex’

  • ‘Most women don’t want the hassle or pressure of sitting on a board’


I am not proposing this is the general female experience in the workplace, however in the last quarter of a century I have experienced all of these behaviours at first hand.


4.2.2 Survival skills.


In Western society, women are traditionally the carers. Currently nearly 4 million women in Britain act as unpaid carers and only 25% of families equally share childcare responsibilities (Aviva study 2011 reported in the Guardian ). 


Both the women I interviewed who were contemplating a start-up were childless and admitted, without prompting, it was an important consideration . One respondent said her original male fellow founder dropped out of the start-up when he found out his wife was pregnant; he felt he should not risk the time and money required.


Deszo and Ross (2012) research concluded the role of women in society as carers provides them with diverse life skills. Taking a different perspective. Mainiero (1998)  suggests the mix of technical and survival skills women require to get them to the top in business are an advantage when coping with uncertainty and may, ultimately give women a psychological advantage in times of business adversity. The ability to deal with uncertainty could provide an edge in a resource restricted start-up situation and the psychological advantage could inspire resilience in a mixed team environment.


4.2.3 Teamwork


Literature, research and anecdotal evidence from founders identify the founding team is most important asset for a business start-up. Peter Cowley, the Cambridge Angel and Chairman of the British Association of Business Angels, dedicates an entire chapter of his recent book on angel investing , “The Invested Investor” (2017) to team building and its pivotal role in the success of business start-ups/ scale ups. Academic research provides evidence gender diversity could enhance the performance of the team.


Carli (2001) looked at how gender diversity within a team offers the potential to maximises social role diversification to enhance team performance . In contrast, Myakosvsky, Unikel, Dew (2005) consider one of the limitations of same sex groups is there is less scope for role specialisation which limits teaming potential by creating  a less open operating environment and providing team members with less mutual support. Helgesen (1990) discovered teams which  included women are less hierarchical and more collaborative. This has been my personal experience and I have been keen to investigate this aspect in my research.


4.2.4 Networking. 


In my research I have discovered the importance of networking. It has been obvious to me  men and women differ considerably in their approach to networking. Dailey, Cato, Dalton 1999 (cited Dai et al 2018) identify the combination of female social traits; social sensitivity, collectivism, multiple societ al roles and the desire for harmony, create networking skills which help women engage with a broad stakeholder group. The importance of social media engagement with a broad stakeholder group is widely discussed  in practitioner literature, for example, Cara Alwill Leyba (2017)  emphasises the importance in gaining a business advantage by extension of networking beyond usual social and professional norms .As early as 1989, before the rise of social media, Hurst et al highlighted the innovative  potential of the extended network. 


4.2.5 Information dissemination.


Information is power; perhaps especially important in the arena of innovation and start-up.  Peter Drucker’s definition of innovation focuses on information as an innovation catalyst ; information dissemination is a crucial part of the process. Some academic research cites information dissemination as a female competency.  Ruderman (2002) concludes women regard acquisition of power as the opportunity to disseminate the knowledge and information which is obtained by their power position . This study suggested men view power as influence and are less likely to share knowledge and information, this maybe due to the fear of diluting the influence gained from their power position. The collaboration and the exchange of ideas are crucial to the success of new ideas and new business ventures.


Hurst et al 1989 discovered women were more likely to adopt a learning collaborative approach to networking and have more extensive extra-organisational relationships than male colleagues . As the project has progressed, I have realised extra organisational relationships are a very important aspect of mixed team advantage and offers a potential  opportunity for women to promote female entrepreneurship to a wider audience. 


4.3 Technical 


Academic and practitioner research highlight two particular technical aspects worthy of investigation:


  • the female approach to business decision making,

  •  mentoring new talent


I will touch on their significance in the innovative start-up arena.


Decision making


There is evidence the social skills discussed above contribute to improving effective decision making. Jackson, Joshi and Erhardt (2003) in their extensive workplace studies (1997-2002) observe the benefits of different points of view in decision making,  some of which seem to to be gender related, confirming my personal experience that diversity of gender, age, ethnicity, class -  in fact any form of difference in world view - create the potential to generate more strategic options, relevant decision marking criteria and stimulate healthy debate. The greater the number of strategic options, the greater potential for debate and identification of a successful solution.


Women’s traditional societal roles may equip them to make  evaluations of strategic options and therefore better decisions. The research of Ruderman et al (2002), previously referred to in the context of information dissemination and power sharing, extended their paradigm to consider how female multiple societal societal roles help women to develop multi-tasking competencies, thus improving the comprehensiveness of their decision making in the workplace. Start-ups rarely have sufficient human resource at their disposal to fulfil all the required roles and the ability to multitask is a crucial success factor for most start-ups. The openness of mind to expect the unexpected and the ability to juggle priorities will be discussed further under the trait of  organisational ambidexterity .




Mentoring plays a crucial role in entrepreneurship, the guidance of a more senior business professional during the high risk start-up phase is priceless. In the case of women there are two important aspects pertaining to innovative entrepreneurship, acting as a mentor within your business, secondly as a role model and supporter for all women entrepreneurs. Miriam Rivera, a former vice president at Google and co-founder of Ulu Ventures, said on 


“it will take a concerted effort to raise up these examples of female founders, it’s unlikely to happen on its own.”


She goes on to say:


“I’ve really come to believe it is very important for women to invest and support other women. It’s not enough that they are qualified. We’re decades behind the curve of what you would expect to see.” 


Miriam’s quote touches on a number of the issues facing women in the entrepreneurial environment, this is also discussed in academic circles.  Eagly, A. H., Johannesen-Schmidt, M. C., & Van Engen, M. L. (2003) work on leadership identifies the ingredients for innovation success and witnessed that women placed a greater emphasis on developing and mentoring subordinates, regardless of their gender. In my experience women are good mentors because they enjoy seeing others grow . The strategic need for more examples of female leadership is extensively referred to in practitioner literature . In Lu Li book, Dear Female Founder (2016), Alex Depledge , Founder of considers confidence as the biggest inhibitor to women’s progression in entrepreneurship.  Christina Richardson Co Founder of Openr, a marketing tech platform, stresses the importance of talent management, she says:


‘Invest in people like others invest in you.....If you invest time in every new starter, the simple economics show they’ll deliver better, quicker. Continue to invest in their training and they’ll continue to get better and stay with you longer . Your need great people for your team , so help make them great and revel in helping another person on their journey too.’ (Christian Richardson cited Li 2016)


Rivera’s quote discretely eludes to a less inspiring female trait , the pernicious effect of envy. (cited Li 2016). In her book , Girl Code Unlocking the Secrets to Success, Sanity and Happiness for the Female Entrepreneur, Cara Alwill Leyba  (2017) argues female entrepreneurs need  to overcome envy for the success of others and collaborate to further the cause of women in business. Cara believes women should be inspired by the success of other women not jealous. As Madeline Allbright said:


“There is a special place in hell for women who don’t help each other.”


4.4 Environmental 




Diversity has been shown to increase the generation of strategic business options , it is therefore reasonable to suggest this creative environment would benefit innovative thinking. There is evidence mixed top management teams are more innovative and this has a positive effect on  business performance (Dezso and Ross 2012). Dezso and Ross found a combination of  social and psychological factors observed in a mixed gender environment support a more open collaborative approach to business innovation, however, they freely admit causality of this correlation is difficult to prove, as forward thinking companies are more likely to promote women to senior management roles. Other academic studies have made this connection. Bantel (1992) cited in Eagly, A. H., Johannesen-Schmidt, M. C., & Van Engen, M. L. 2003) concluded diversity was associated with higher levels of creativity and innovation, in addition, in the same article Ginsberg (1994) considers female presence in the top management team as beneficial to innovation strategy. The connection between diversity and creativity seems logical and as part of my research I will try to determine whether there is any evidence of greater creative collaboration in mixed teams.


Stress reduction.


With any new venture there is a considerable amount of stress, largely due to uncertainty and the intensity of the learning experience. Brett and Stroh (1999) comment on senior women’s superior skill in conflict resolution, their ability to  adapt to change whilst motivating and inspiring others to work in with that change. They believe women can help to reduce stress in unstable environments due to their behavioural response to complex environmental stress, such as that most likely to be experienced in the early stage of a start-up. One quality which would surely benefit any new start-up is conflict resolution. Brett and Stoh comment women are more likely to share concerns and problems that require resolution , in addition they have a greater propensity or open debate which can bring about change. This could include ability to pivot , which can save a floundering business; I will expand upon pivoting later in this project.


Psychological safety.


Psychological safety is defined as "being able to show and employ one's self without fear of negative consequences of self-image, status or career" (Kahn 1990, p. 708). Psychological safety is widely cited by both academics and practitioners as a vital condition for a successful top team regardless of business size or age. In Teaming: How Organisations , Learn, innovate and Compete in the Knowledge Economy, Edmondson (2012) considers psychological safety of vital importance to ensure team member can feel safe to speak up and suggest new ideas/opportunities without fear of judgement or ridicule. Edmondson identifies psychological safety as a necessary and fundamental  foundation for innovation and tries to formulate a recipe of action to create the conditions for the creation of  psychological safety, these factors include:


  •  approachability 

  • permission to display a lack of knowledge

  •  the ability to demonstrate fallibility

  •  a culture of encouraging participation

  •  the framing of failure as a learning opportunity


I would suggest these ingredients require the social sensitivity and power sharing characteristics referred to in this literary review, which give women a psychological advantage . Edmondson suggests these factors combined with male traits such as:


  • honest, straightforward language

  • clear boundaries 

  • accountability for mistakes 


explain how mixed teams could be more successful at creating psychological safety.

Is this the formula for innovative start-up success? In my research I will look at the potential correlation between the freedom to speak up and gender. Could it be an atmosphere of psychological safety engendering a collaborative work environment brings out the best in women and men?


4.5 Financial


Long term returns. 


Female led business strategy is often financially prudent, potentially boosting long term returns, however, solid long term returns are often achieved at the cost of business growth. In Heather Wilde’s article dated 18 September 2018 (Inc.,com)  she considers the three main reasons why women raise less venture capital which impacts business performance. Wilde identifies three aspects of financial strategy which are more prevalent in female led business start-ups :


  1. A conservative approach to strategy less likely to embrace agile learning innovation; agile innovative learning is the ability to implement small rapid iterative approach to innovation enabling entrepreneurs to fail fast, learn and move onto the next version.

  2. Female founders are reluctant to spend investors cash. ( research discovered 68% of female led start-ups funded their own business from savings . Much of the female practitioner entrepreneurial literature recommends bootstrapping ( starting a business without external capital) as a preferred financial strategy.

  3. Female entrepreneurs have a greater preponderance to humanise their investors and can  easily build a sense of personal responsibility towards individual investors. Women often report they see investor sign up as a validation of honour and trust that should not to be broken .


 As a result women’s business are more profitable; they spend less and therefore generate relatively higher returns, however they do not experience fast growth. Female founders  conservative  investment in plant and machinery and recruitment restricts growth potential. There is further evidence a mixed team maybe beneficial in negating this overly conservative strategy, thus benefiting long term performance, Li and Tang (2010, cited by Jeong and Harrison 2017) considered the combination the overconfidence of men and the inherent conservatism of women led to better long term business performance in mixed terms as opposed to single sex teams. This dynamic extends to non financial risks. Woolley, Chabin, Pentland, Hasmi and Malone (2010) found men and women compliment each other in non financial risk mitigation decision making. Sallie Krawcheck, founder of the woman-focused investing platform Ellevest, agreed:


“People assume women are more risk-averse, but I think of them as more risk aware. Where some might see women not maximizing their potential returns, I see them managing their potential risk”


Inherent investment conservatism and risk mitigation may not be the only factor in the generation of superior long term returns within mixed teams . An article on the Harvard Business Review by Woolley and Malone ‘What makers a team smarter? More women (June 2011) describes an experiment where mixed teams were given a brainstorming decision making puzzle to solve, a business environment simulation and the results concluded the more women in the team the better the team performance; there was evidence of a higher team IQ when more females were present.


Lower leverage. 


The tendency to over confidence referred to by Li and Tang (2010) can result in all male top management teams maintaining of a higher level financial corporate leverage than mixed teams, in particular, engaging in higher levels of investment in plant and machinery. This increases the risk of bankruptcy  (Bathala, Moon and Rao 1994 cited Jeong and Harrison 2017). In addition , there is evidence male founders reward themselves higher benefits packages, reports a survey by  J. Thelander Consulting  San Francisco, a talent management consulting firm, found on average women founders pay themselves less than their male peers. In 2017 female founders paid themselves an average of $179,444 versus $232,659 for males (this is based on a survey of 160 Silicon Valley start-up companies with funding less than $15m).




Considering the attraction of long term returns , why are women led start-ups less successful at raising funds and why do female led companies have lower market capitalisation? Pitchbook .com, the private data source of venture capital activity, reported in 2017 only  2.2% of venture capital funding across Europe and North America went to women. In a similar period, the Quartz report found on average women raise 22.18% of the amount of capital per deal compared with their  all male peer group teams. By extrapolation, women led start-up companies are worth 16.38% of the value of all  male equivalent companies (Michael J. Cohen a,d Dan Kopf 12/9/18 QZ.COM). This difference could be the result of the financial market fixation with fast business growth, however it could also be evidence of Balachandra’s finding with regard to pitch effectiveness.


There is an extensive body of academic by Lakshmi Balachandra and her colleagues on investor pitching. One very recent work by Lakshmi Balachandra et al (2019) is concerning for female entrepreneurs. A former venture capitalist, Lakshmi left commerce for academia to investigate why women were less successful at raising finance through pitching. Her research highlights that the pitch as the pivotal factor in the investors decision to proceed. Lakshmi has observed, under controlled laboratory style conditions there is an investor bias against female entrepreneurs who are too feminine. She concludes feminine behaviour is not congruent with perceived role as an entrepreneur and this behaviour is penalised by investors as this appears untrustworthy. Balachandra et al emphasise this is not a gender bias but a bias against behavioural traits associated with women such as defensiveness and overt displays of emotion, including passion for their project. The conclusion is the cool, calm presenter who is open to questions wins the day. Investors identify leadership strength as a perception of trustworthiness and good character but this must be combined with a calm demeanour. 


4.6 Strategic




Great ideas are sometimes just that - great ideas and when business realities hit perhaps you need to think again about changing tack. The ability to acknowledge the pivot point and more importantly, to  take action to change , is an important business competency, without it  sustainability will be just a dream. It is worth considering  the relationship between gender and the propensity to pivot. Here is a particularly good definition of pivot from the Financial Times lexicon , which is obviously written by an experienced hand:


“pivot (which generally refers to a shift in strategy) describes the tortured path that most start-ups go through to find the right customer, value proposition, and positioning”


It could be argued there is a link between social sensitivity and the propensity to pivot. Edmondson (1999) identified that in atmosphere of higher risk of failure, people were more attentive to social processes, thus the social sensitivity exhibited by women would provide an competitive environment advantage in high risk environment. Chung and Monroe (1998 cited Ye Dai (2018) found women were more tolerant of information than doesn’t fit existing paradigm and more inclined to consider the implications of outlier data than their male colleagues . Men were more likely to dismiss rogue data as a worthless distraction and dismiss it without consideration . The sensitivity to new facts and subliminal social cues could result in female entrepreneurs gaining a competitive advantage or innovation breakthrough from the identification and investigation of serendipitous data outliers or capitalising on advantageous social interactions. Ling et al (20080 cited Jeong and Harrison (2017) noted women were more likely to be involved in smaller more nimble organisations and perhaps this explained the greater propensity to pivot, however, other studies suggest women’s assimilation of data, which is more likely to consider outlier results rather than disregard them, maybe the defining factor.




Organisational ambidexterity is the dual focus of exploiting existing resources and competencies whilst exploring new opportunities. The term was first mentioned by Duncan (1976) in his article The ambidextrous organization: Designing dual structures for innovation. Ambidexterity is the balance between two seemingly contradictory behaviours  (Raisch and Birkenshaw 2008). The research of Sucheta Nadkarni, Shi Tang Lui, Stephen Weng,Zheng  (2017 ) found organisational ambidexterity and business strategy required psychological safety to flourish and in difficult times a gender mixed team will benefit psychological safety. 


Psychological safety is therefore important to maintaining organisational ambidexterity. Ambidexterity could be the difference between success and failure in a highly competitive, high leveraged innovative start-up. The venture capital firm Jamjar use a matrix of 15 characteristics to determine suitability for investment includes clarity of thought/action , communicating an idea, intellectual power. Adam Balon said :


 “In a start-up scenario there is a need to juggle lots of things including  the ability to hire people better than the founders!”


The balance between learning and doing is a defining feature of an innovative start-up. Edmondson (2012) considers the importance of execution as a learning tool, she observed the ability to maintain iterative innovation whilst delivering services/products requires an environment of psychological safety which engenders the teaming characteristics of speaking up, experimentation, collaboration and reflection. Difference in worldview present in mixed teams may act as a catalyst for greater debate and consideration of a wider range of strategic options  (Philips and Lloyd 2006). They considered psychologically safe, mixed teams, were, on the whole, happier to express divergent viewpoints thus broadening team perspectives and inspiring richer discussions. The challenge of the broad rich discussion is reaching a timely, sound consensus. There is a balance between exploring ideas and timely decision making to ensure the strategic and corporate sustainability and effectiveness. An established entrepreneurial coach commented :


“Diversity of race and gender definitely more important in innovative start-ups and  I have experienced some of the most diverse teams producing the most ideas and funnelling them very effectively . The problem came at the evaluation criteria, the need to narrow the options down to one , their diverse life experience made it difficult to reach a consensus on what were important success criteria.”


Tse and Esposito, in their book Understanding How the Future Unfolds: Ising DRIVE to harness the Power of Today’s Megatrends (2017). add an extra layer to organisational ambidexterity. As well as the exploitation of existing capability and exploration of new ideas, Tse and Esposito add the development of a strategy for future capability. They believe, in order to achieve this, there needs to be an agility of thought which can abandonment of the the traditional business silo mentality, thus assimilating information from diverse sources and making  new connections between disparate facts. Greater extra organisational networks , sensitivity to social cues and the  consideration of outlier data identifed in research as female traits could provide a competitive advantage for the next generation of women entering business in the fourth industrial revolution.


Power sharing . 


 Bilmoria and Piderit (1994) identified a more inclusive ‘Female management style’ , sharing power and knowledge which solicits input from receptive colleagues and subordinates. This behaviour can define the nature of an organisation. Rosener (1995) identified the point where a critical mass of women create an empowering, collaborative voice helping  to balance the more autonomous, agent orientated action of men. Innovation needs both action and creation, thus organisational ambidexterity requires power sharing. In their recent work,  Dai et al (2018) highlight the vital need for collaboration in early stage commercial ventures. Early stage ventures often require a large diverse stakeholder group to get them off the ground . Feminine strengths of engaging with and balancing the demands of, a large diverse stakeholder group, whilst gathering and disseminating information, could make the difference between start-up success and failure. Dai et al (2018) concluded an openness to and integration of new ideas is a more effective foundation for innovation than domination; collaboration wins over agency.


5. Academic and practitioner literature- conclusion 


There is a body of academic research and practitioner anecdote suggesting mixed teams have greater potential for start-up success. The greatest benefit seems to be in social dividend, which creates the environmental conditions for creativity. Psychological safety enables free debate, increases organisational  resilience by reducing stress. The ability to speak openly can enable sustainability . If things are not going to plan, free debate opens the door to the possibility of pivoting and risk reappraisal .


5.1 Methodology 


Due to the size of the potential sample population the methodology adopted in this study is  largely qualitative. Mainstream female entrepreneurship is a relatively new phenomenon. I surveyed and/or interviewed forty European start-up teams and solicited the opinion of academic, entrepreneurial, financial and policy innovation shapers. The aim is to identify how mixed teams differ from all male team and thus tease out possible correlation between diversity and successful  innovative activities 


There has been some research on the relationship between gender in the start-up arena and innovation. The PhD thesis of Tsiougkou (2017) looked at recruitment of the start-up team to gain insight into the relationship between gender and innovation. This research acknowledged funding constraints on talent management may have impacted the success of this research.

My approach has been to consider this relationship from two perspectives either side of this point in the life cycle of the start-up. In order to invest in talent you need to raise capital,  I will look at the relative success of mixed team capital raising . Capital is relatively easy to raise, but creation of a sustainable  enterprise is harder. At the other end of the process  I will investigate the gender dimension of business strategy such as decision making , pivoting and attitude to risk. The qualitative anecdotal evidence will be used to support or question the quantitative data. 


5.2 Quantitative methodology


Using the traits identified in the academic and practitioner literature I asked forty European start-ups questions relating to :


  • Gender 

  • Team formation 

  • Shared values 

  • Decision making process

  • Business strategy

  • Funding 

  • Psychological safety

  • Mentoring 

  • Networks /collaboration 

  • Personal development 


I analysed the results looking  correlations and  trends that could support or contradict existing research.


6. Results


6.1 Psychological safety - over 70% of respondents reported they had kept an idea to themselves due to lack of confidence 


Investors and entrepreneurs alike stress the importance of honesty within a start-up team. These results suggest this is not common. Anecdotal evidence from entrepreneurs such as Adam Belon from Innocent suggest this is a critical success factor but takes time to build . In a recent interview on Judge Business school Enterprise Tuesday he said, “I wish we had shared financial results with colleagues from the start.” Adam underlined this importance of ‘honesty at work’ and said it was an important criteria when he was considering an investment opportunity.


There is anecdotal evidence some successful start-ups hire ‘like minded souls’ to secure psychological safety, thus perhaps sacrificing creativity for expediency.  An entrepreneurial business coach cited one Cambridge client who went out of the way to hire a  

team member with identical traits, the coach said  :


“They needed someone to fit,  who shared the same humour, slang, attitude, background, education , hobbies , this would keep the peace. They didn’t need their ideas challenged to deliver their product.”


6.2 The team trumps the pitch . Twice the number of respondents felt their team had been the defining factor in securing funding .


During this research, the importance of team and alignment of values has been a recurring theme. One female entrepreneur described how she and her colleagues had shared and analysed the results of psychometric tests. 

Interestingly, she went on to say their results were quite different with very few overlaps. She went on to express a desire to find an angel investor who would also exhibit the same set of values.


Pitching has thrown up very interesting results. Anecdotally I found none of the Europeans enjoyed pitching, some admitted they were scared of pitching and two said it had stopped them looking for outside investors. Investors are split on the importance of the pitch, Peter Cowley’s book considers the pitch as a medium for getting to know the team whereas Adam Belon of Jamjar prefers to watch people work.  One Silicon Valley entrepreneur I interviewed said he enjoyed pitching, but alluded to the aggressive nature of the interaction, he described his relationship with his funders as, “Having your digits cut off one at a time.”


This use of language suggests a very confrontational environment, perhaps not suited to women, perhaps not suited to European social mores. A member of the Judge Business School Entrepreneurship team summed it up, “Pitches should be strong confident and convincing ; it is an arena of success and failure. Of course , this would be less appealing to women due to their natural aversion to public failure, because of its perceived social implications......the pitching arena is stacked against the female psyche. There is a need for a mid spot between pass and fail, a  means of getting attention from investors , being listened to and then have the confidence to communicate .”


6.3 Business Decision making - all women respondents described business decision making  an analytical process whereas the men identified the process as hierarchical, collegiate or analytical 


This is interesting result which would benefit from further research . It suggest women make decisions without considering the social status of their colleagues.


6.4 Business priorities- all women respondents placed Research and Development  above profitability. 30% of men cited profitability as the top priority.


Female respondents emphasis on R and D suggests they envisage establishing a business for long term success rather than short term profit. Men seem to be more interested in profitability, perhaps this has implications for  investor attractiveness of male led start-ups .


6.5 How to spend it? Women and men were split on how to spend cash surplus . Women’s top priority was staff development , 30% of men’s top priority was asset investment. 


Adam Belon of Innocent said one of his entrepreneurial mistakes was that the company didn’t hire people who were better than us from the start. The female respondents were quite clear , if they had surplus funds they would spent it on hiring or training people, not one mentioned investment in assets which was popular with men.


6.6 Personal development. The average support network is 10-20 . Some women had a 20 plus network, but no men. 70% are mentors, 60% have mentors.


The result suggests the support network is relatively small , though female results were skewed to the upper end. Mentoring is a widespread activity in the entrepreneurial community. 90% of respondents felt they needed further personal development to be a business success. There was an overwhelming response to the effect the founders did not feel they had adequate business skills . One female entrepreneur expressed how she felt thus, “I wanted to be an entrepreneur when started MBA and was disappointed by the shortage of entrepreneurship courses making up the programme. I understand the school has to balance the interests of the students and the sponsoring employers.”


6.7 Risk taking - 80% of respondents had risked more than 50% of their personal wealth . On average men had risked more.


6.8 The idea of the start-up of friends could be a myth.


Only 17% of respondents regarded their cofounders a friends . 62% were hired for skill set or former colleagues.


6.9 The face to face meeting lives on.


Two thirds of teams still meet face to face on a regular basis. 


7. Implications  


7.1 Better together? Yes!


“I suspect, as with most things, the right answer is somewhere in the middle. Perhaps, if men and women joined together in business more frequently -- like Mark Zuckerberg and Sheryl Sandberg -- you'd have the best of both worlds.” Heather Wilde The Three Reasons Female Founders don’t raise as much as Men ( 18/9/18)


Diverse teams offer potential for innovative success  through different perspectives on opportunity and exploitation . Mixed teams benefit the business competency of both men and women, Ely 1995 cited in Eagly, A. H., Johannesen-Schmidt, M. C., & Van Engen, M. L. 2003 concluded that women in mixed gender teams have a greater propensity to fulfil role required by task rather than the task prescribed by the gender norm.


7.2 Focus on personality traits rather than gender per se? The combination of feminine qualities can enhance an innovative team


The results of this project suggest confidence is an issue for both male and female entrepreneurs, perhaps rather than concentrate on gender it would be wise to focus on personality trait. 


Introversion could be the reason behind the low level of psychological safety experienced by the respondents, that introversion has its advantages as one member of the team is less likely to dominate discussion . Only one respondent said one member of their team was dominant at the cost of open debate in their team. Kanter (1988) in When a thousand flowers bloom : structural, collective, and social conditions for innovation in organisation,  defines innovative success as a combination of bargaining, negotiation ,information accumulation and coalition building but not at the dominance of others. Greater accessibility to business education and mentoring could assist the next generation of entrepreneurs both male and female.


8. Education 


The importance of lifelong learning will grow as the skills gap created by the fourth industrial revolution widens and traditional jobs disappear. HBR article Strategy in an Age of Superabundant Capital (2017) regards the shortage of skills and capability rather than capital as the throttle for innovation. Mankins et al (2017) believe efficient corporate capital management is no longer a competitive advantage, it is knowledge that makes the difference in a successful innovative company.

Business school is a big commitment financially and practically, this is one of the reasons less than 18% of my cohort is female; they do not feel they can spare the time and money given their caring commitments.  I spoke to a senior member of 30% club who admitted qualified women candidates for FTSE 100 roles are thin on the ground. Becker as early as 1975 (cited Jeong and Harrison 2017) identified it took women longer to develop leadership skills. Accessible business education for women is vital to increase participation rates in entrepreneurship.


There is a growing interest in work based training and shorter online business courses; this makes learning more accessible and practical. Considering personal traits such as introversion , the lecture theatre can be a very daunting place in which to contribute. Workshops rather than lectures may provide a more effective way to get the best form the cohort. Smaller groups would be better suited to women and introverts, offering psychological safety. This is a view expressed by more than one male member of my cohort who freely admitted they felt uncomfortable  speaking up in the lecture theatre.


The bite size online business courses in manageable chunks are more access to women with caring responsibilities. These are not replacement fo business school interaction and a workshop summer school programme could be the solution. The objection to this format could be that it fails to build cohort cohesion and establish the alumni network could inspire collaborative working. This has not been my experience I have had greater  response to my research from the   Ignite cohort , a one week workshop programme than from my EMBA, twenty month , lecture based cohort. Possible explanations for this distinction are worthy of research, as it has implications for the cross sector collaboration required for big technological developments of the future. Is it investment ? More of the Ignite programme were self funded . Could it be attitude? A greater proportion were interested in entrepreneurship. be investment ? Could it be the  teaching method ? The workshop format creating a more cohesive class than the lecture theatre. 


9. Government policy


The Government need a coherent innovation strategy to strengthen the post Brexit economy;.                             policy to support and exploit the culture of invention and high quality research and thus broaden competency in the knowledge economy. This will help reduce economic and gender inequality; this requires comprehensive access to education and funding .


Innovate UK is the government initiative to provide grants and expertise to growing knowledge businesses in UK. In 2017 Innovate UK launched a programme of awards for female entrepreneurs. The government needs to increase the resources committed to this initiative to make an impact . The University College London Institute for Innovation and Public Purpose (IIPP ) is hosting the Commission for Mission Orientated Innovation and Industrial strategy which is co chaired by Professor Mariana Mazzucato. The commission reports in May 2019 on the Vision for Innovation led Economic Growth, a cross discipline strategy focusing on four key missions :


  • AI and data economy

  • ageing society

  • clean growth 

  • the future of mobility


Hopefully following this report more funds will be made available for knowledge economy start-ups delivering this mission. The establishment of innovation clusters based on each specialism would provide an excellent opportunity for start teams to build face to face collaboration networks 


Economic inequality has once again returned to the political agenda . The Brexit vote has been seen by many politicians as a protest against the power of the ruling elite and their disengagement from the needs of the general public.  Recent financial scandals and corporate mismanagement have strengthened the debate for greater stakeholder accountability and government is under pressure to respond to the debate. Elizabeth Warren has led the way in the US demanding broad corporate stakeholder accountability.  This could be an opportunity for greater female representation in corporate strategy. Increased stakeholder engagement could be advantageous for women who work well at balancing the needs of a broad spectrum of stakeholders (Daily, Cato and Dalton 199 cited Dai 2018).


There is a case for government intervention in the venture capital market to increase access top equity finance for Small Medium size enterprises (SME). At present SMEs (which make up 98% of tUK businesses ) are largely condemned  to debt funding. The forming of a national investment bank offering micro VC funding could be a solution acting a conduit for small investor capital  to earn potential returns beyond those of financial or property market. The Harvard Business Review article Strategy in an Age of Superabundant Capital (Mankins, Harris and Harding, 2018) reports we are in an era of superabundant capital, where too much capital is chasing too few investments. Until 2040 the global economy is in the era of the peak savers (the current 45-59 years old are growing capital ). Peak savers investments could be profitably used to stimulate the growth of innovative SMEs. The market has failed to deliver equity financing for SMEs, government assistance is needed to set up the formal structures to encourage new business ideas,  moving venture capital away from big bets to lots of little bets. Profound economic and social change could be delivered through this initiative reducing property market volatility and increasing female  entrepreneurship through access to capital for small enterprise .


10. Investment community


‘Investing in women is an arbitrage opportunity’

 (Nisa Amolis NY Angels cited Lui 2016)


There is evidence attitude to risk varies with gender ; there is a growing awareness in the funding community that gender difference can contribute to managing portfolio risk. Lauren Klein - Girl Made cited Lui 2016, believes women entrepreneurs build culture for longevity, rather than exit strategy. The talent leakage created by the American style start-up cycle to exit strategy is not economically efficient. Perhaps female led business will provide of a source of stable long term investment.


11. Corporate implications 


Companies need to engage with female customers. Neilson (2011) surveyed 21 countries representing 76% world GDP found women control most household purchasing decisions, therefore  greater female involvement in corporate strategy will benefit the bottom line. Deszo and Ross (2012) identified the strategic importance of female corporate intelligence to satisfy customer needs.


Women often have considerable responsibility outside work , family friendly corporate policy is vital to participation of women in business. Hampton Alexander Review Nov 2018 highlighted importance of family friendly corporate policies such as parental leave and mentoring for returners


Entrepreneurship is not fo everyone .Mankins et al (2017) Havard Business Review article on Superabundant capital suggests companies could invest spare capital in autonomous innovative experimental units within the firm ; this is often termed intrapreneurship. Intrapreneurship could provide a less risky career route for women into an innovative start-up.


12. Role in the Fourth industrial revolution. -


The fourth industrial revolution will offer unprecedented opportunity for women. Feminine traits identified in this research are compatible with fourth revolution competencies such as collaborative working, extensive social networking and knowledge accumulation. Norburn and Birley (1988) recognised as early as 1988 women were more likely to be perceived as leaders in industries requiring social interaction . 


The latest Deloitte Millennial survey 2018 found 61% of generation Z want to leave corporate employment within two years, they are increasingly of the view that business leaders are unethical and big business is not benefiting society. Generation Z see entrepreneurship as a way they can change this; entrepreneurship is therefore on the rise.


13. Conclusion


There is ample evidence diversity improves the chance of start-up success. However, most start-ups fail within five years and perhaps this statistic could be improved if the boardroom were a more open and honest place. Confidence and empowerment give people the voice to speak their mind and greater access to business training and mentoring could facilitate this growth. The evidence produced by Rosener (1995) in favour of a critical mass of women enhancing psychological safety strengthens the case for more women in the top team.


The SME venture capital market inequity has starved some business of capital, whilst encouraging short-termism in others . To ensure Britain benefits from its innovative talent the government need to formulate policy to help startups financially and professionally. The initiatives they have introduced to encourage female entrepreneurship need to be more extensive.  the pitching process- the arena designed by men for men as a method of determining investment suitably may be contributing to the high level of business failures, perhaps sound business ideas proved by introverts are drowned out of this discourse.


It is up to women to help each other too!


“There is a special place in hell for women who don’t help each other.” Madeleine Albright.


I believe it is important for women to see other women not replicating male behaviours to succeed,  risking and failing without social embarrassment, having the strength to try again ; personally I hope I can act as role model and mentor for young women to help them build the resilience and confidence to follow their dream





  1. Innovative Feminine Trait Factors 









Social sensitivity 

Decision making 


Long term returns


Survival skills


Stress reduction 

Lower leverage



Psychological safety

Power sharing 


Information  Dissemination 

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