Being successful in business often requires one to take risk. Without risk, decisions are not made, deals don’t get done, and business comes to a grinding halt. We deal with risk every day in one shape or another, yet the way in which people manage (or avoid) risk varies greatly from person to person.
Numerous studies have been conducted on the patterns of behavior exhibited by women in a variety of situations which relate to how risk is managed. Individual studies focused on how women handle personal financial risk, professional risk, and how female executives handle corporate risk. More specifically, The Atlantic Economic Journal published a study in 2006 that evaluated the manner in which female executives managed financial risk relative to their male counterparts. To save you the trouble of reading the rather lengthy and technical report the results of the analysis is that female executives are more risk adverse particularly in the area of decisions of a financial nature.
The long and the short of every study that I’ve come across is that women are more risk adverse than their male counterparts. Based on this simple premise, I have one question to ask which may make you cringe:
Given that risk is inherent in business is being a woman enough to impact one’s ability to succeed in business?
Not being a woman I can’t fairly and honestly answer this question – which is why I need YOUR help. Please join in the conversation and share your thoughts on the topic by commenting on this post.
Bryon, what is your personal opinion and professional observation on the subject. It is critical for a professional take in the research, step away and form their own opinion (based on the research, observation and/or personal experience) and then be willing to take the risk in sharing that. To have no opinion or one not able to be shared doesn’t show an ability to withstand much…risk. That being said, again, so curious on where you stand on this.
@Mike – great point. As Jennifer highlights there is a time and place for a slow and steady approach and the financial meltdown is a great example of where risk avoidance could have played in the favor of the type of risk that women avoid (just be clear, this is per the research report linked in the article – not my personal observation)
@Meghan – Thanks for weighing in with something that I clearly cannot, a female perspective. Your insight and comments are very much appreciated.
@Jennifer – Glad to see you’ve jumped right into the discussion. I agree wholeheartedly with your perspective and welcome your assistance in helping to frame/re-frame the discussion a bit differently.
I’m looking forward to hearing from more people on this topic.
Thanks for providing a male perspective here at the Women of HR. As with most discussions that pit one entity against the other in a “which is best?” discussion, it sets up a win/lose scenario. I prefer to discuss it in a context of pros and cons to each position. To Mike’s point, there’s a time and a place for a more “slow and steady” approach And, to Meghan’s point—is risk aversion a male or female trait—I agree that it tends to line up more with life experience and personality rather than gender.
To respond to your specific question: without seeing the specific report you mention, it’s hard for me to declare if women are more “risk averse” or not. I would have to see what the studies are measuring. There are many ways to measure risk. I offer this take on “risk”—my observation is that many of my female colleagues are more likely to take risks that require expenditure of emotional effort—listening to a distressed colleague, handling a tough performance discussion, or providing “atta girl/boy” support to team members. I find that some of my male colleagues are less likely to take this sort of “risk”; it’s too “emotional” or “messy”. Or, it’s deemed not a worthwhile endeavor in a business environment.
So, if you have a colleague that isn’t performing well and is currently experiencing a meltdown in your office, which gender will be better equipped to deal with it? Through social conditioning and genetic wiring, it *may* be a woman. Or, it may be a male leader who has honed the more “feminine” aspects of his skill set.
Really enjoyed this post Bryon! Great question. An an entrepreneur and a woman 🙂 I’m typically attracted to risk from a business standpoint. I find the idea of creating new markets exciting and challenging. I tend to look at this from a personality, behavioral view rather than the female verses male angle. I know many woman who are also wired this way. It’s not enough to be a woman but certainly it’s important to have this type of personality in order to ride through the uncertain nature of business these days. I definitely want my female colleagues weighing in on key decisions.
interesting post – and my answer will not be decisive one way or the other – sometimes you have to be willing to take on more risk to succeed, and if women have an over all lower risk profile, then perhaps it is a barrier, BUT, I think most would say the past 24-36 months have taught us that a more measured, long term, sustainable approach to life and business is in our best interests – so, if the risk profile is correct, I would want (and do) have women weighing in on all important decisions