From the Lionesses of Africa Operations Dept
“The best decision was not to follow consensus.”
The above is a quote in an FT article by the highly successful outgoing UBS CEO, Sergio Ermotti (he is off to Chair SwissRE) and was on our desks when we arrived this morning. Given the coffee-grain fingerprints, there was only one possible person who could have left this and indeed the HoF (Head of Finance) was deep into the FT (as well as a 3rd cup of coffee) as we walked over to discuss.
“You explained the meaning of ‘Survivorship Bias’ last weekend in relation to following the ‘Greats’ in Management and Leadership. Understanding that those that failed may have also followed the advice or direction given in various business books, MBAs and by top Mentors/Leaders, yet for whatever reason, be it bad luck or timing, still failed, and this had left only those who survived standing and visible.
Lionesses therefore must recognize that although there is great advice out there, staying true to themselves, to the vision of their own business and to the trust lent to them by their customers is absolutely essential. This cannot 100% be found in business books, one cannot having read the book, either guarantee success nor overnight become a Steve Jobs or Richard Branson, but there is a ‘Balance’ to be found…
Let us push this ‘Survivorship Bias’ and look at why women left standing, still struggle to raise finance or gain access to large western supply chains…”.
Attention started to wane as the HoF realized the coffee cup had somehow emptied itself(!), and so we returned to our desks.
Indeed, in our search for Leadership books by great Women Leaders the shelves are quite bare (again showing the difficulties of rising as a woman if so many major management and leadership books are written by men), although we did find that former Wall Street powerhouse-turned-entrepreneur Sallie Krawcheck had written a book called: “Own It: The Power of Women at Work”. Sallie is one of our favourites because she has attacked head-on the iniquities of finance, starting a US women-only pension, investment and advisory firm Ellevest, in an attempt to even-out the playing field.
The one and only Venus Williams sums up the book brilliantly saying:
“It's easy to get caught up in all the stereotypes and misconceptions about what it means to be a powerful woman. Sallie Krawcheck sets the record straight, showing that being a powerful woman in business isn't about being the fastest or strongest or best at playing the "man's game". Because the world is changing in ways that give women more of an edge than ever. Whether we leverage it to rise up in our careers, start businesses, or make a difference with our dollars, that power is real - and it's time to own it.”
As Sallie says:
“Ellevest was built by women, for women.
The financial industry wasn’t.”
…here is a reminder from one of our previous letters, a photo showing the inspirational Christine Lagarde at her first EU Central Bank meeting and the ingrained mountain that we have to climb in all banks and finance houses:
As we pointed out at the time, although Christine is the boss, there are only three inspirational women in this photo of the top decision makers within the EU Central Bank…and two of them are in paintings on the wall!
Great strides (from, it must be said, a very low base) are being made in Boardrooms across the globe to create the essential diversification of views and experiences necessary to run banks and businesses in the 21st Century, but still the numbers at Board level are appalling.
With that in mind it was fabulous to see and hear the brilliant Sola David-Borha from Standard Bank (CEO, Africa Regions), giving her views, advice and thoughts for financing Lionesses during our recent Harvard/Lionesses of Africa Conference. For those of you who missed it (and over 2,500 attended via Zoom and Facebook), here is the link to the Harvard home page with the recordings - well worth a viewing if only to hear the amazing Lionesses (many of whom are part of the ‘100’) with their incredible and inspirational businesses who kindly gave up their time, views and knowledge.
But it is not enough to just recognize female talent for the C-Suite.The Engine Room needs a spring clean too. This means the financing rules and tick boxes still controlled within the Risk and Credit Committees, just as we are finding now with Ai and modern lending algorithms, will (if not checked) take on the unconscious bias of its maker. (If you think that is not possible look at the surprise at the gender bias of the ApplePay Credit Card).
Pitchbook (the home for VC and PE deal information) point out:
“Venture capital funding overall has surged in recent years, but the numbers haven't leapt forward for female founders at the same pace. Last year, companies founded solely by women garnered 2.6% of the total capital invested in venture-backed startups in the US.” 2.6%?!?
As HBR say in their report ‘Male and Female Entrepreneurs get asked different questions by VCs - and it affects how much funding they get.’:
“According to the psychological theory of regulatory focus, investors adopted what’s called a promotion orientation when quizzing male entrepreneurs, which means they focused on hopes, achievements, advancement, and ideals. Conversely, when questioning female entrepreneurs they embraced a prevention orientation, which is concerned with safety, responsibility, security, and vigilance. We found that 67% of the questions posed to male entrepreneurs were promotion-oriented, while 66% of those posed to female entrepreneurs were prevention-oriented.”
Confused? Here are some examples…
They go onto say:
“Examining comparable companies, we observed that entrepreneurs who fielded mostly prevention questions went on to raise an average of $2.3 million in aggregate funds for their startups through 2017 — about seven times less than the $16.8 million raised on average by entrepreneurs who were asked mostly promotion questions.”
No wonder that over 90% of our inspirational Lionesses have had to grow organically through profits, slowly building their companies the hard way, rather than having the luxury of raising VC/PE or bank funding, splashing the cash and going for Turnover. Unconscious bias is alive and well.
Of course we are generalizing terribly here about ‘splashing the cash’ (not least because VC/PE funding comes with conditions, including a fierce Board Member or two), but if a group has such a solid base, built on long term profits, with little or no debt, does that conversely not make them more investable, not less?
If women led businesses receive so little of the capital pot and funding, then surely (and tragically) this means many more are sadly going out of business each year due to this lack of essential Oxygen, which also means that those left behind are (almost by definition) successful and strong. Ok, so Nietzsche said it better in his book Ecce Homo: “Was ihn nicht umbringt, macht ihn stärker.” or “What does not kill him makes him stronger.”, but the point is that the small ‘Female Led Business Pond’ must therefore be teeming with strong, healthy businesses, whilst the much larger Male dominated Lake, cannot be such a sure bet as the investment suggests. Quite simply we know where we would want to dangle our hook. This is ‘Survivorship Bias’ working strangely in women’s favour and it is amazing that this is not appreciated by Financiers.
Surely the same is true in supply chains. If western companies are looking to build ‘resilience’ into their supply chains, does such a ‘survivor’ with such a solid base not count for something as well?
Let us be perfectly clear - Lionesses across the globe are not looking for Charity, just a way in which they can be equally heard, seen and given the opportunity to compete on a level playing field.
As one of our major Lionesses mentioned to us this week, she is not looking to have her company awarded any deal because it is female led, but because she is good at what she does and creates great value for her customers (as borne out by all her awards), but somehow male run businesses in this race for deals and finite capital get their noses out in front, and are seen and are heard first.
Don’t get us wrong, no one in any company wakes up in the morning and decides that today they are going to only deal with male run businesses. No! They are looking for perfect product, security of supply and ultimately great value for their own customers, yet male run businesses still get noticed first.
With that in mind, following up the brilliant Harvard/Lioness conference sponsored by Hakeem and Myma Belo-Osagie; London Stock Exchange Group; UNECA; Empower Africa and Standard Bank, we are about to launch the Lioness Xpo, with one of our other major supporters, Absa. This Xpo will connect corporate buyers to Lionesses as a way of getting our membership to be seen and heard, a place for any who wish to move against the tide as our Black Swan is doing in our opening photo (taken by Melanie on one of her morning walks and sent to the HoF as a gift to lighten the day), and to fish in the success-full women-led pond.
As the ex-CEO of UBS said:
“My best decision was not to follow consensus.”
Thank you to all those who support our essential work in this.
…Stay safe.