Women in business face daunting challenges trying to make their mark and advance professionally. While they start their careers in near parity with men – 48 percent of women to 52 percent of men hold corporate entry-level positions – they are far less likely to advance to the C-suite.
Women make up only 28 percent of the elite C-suite cadre compared with men holding the lion’s share of C-suite positions, or 72 percent. It’s even more challenging for women of color to advance. Breaking down the percentage of female C-suite executives, only 6 percent are women of color compared with 22 percent white, according to a 2023 LeanIn.Org and McKinsey survey conducted among nearly 300 major corporations employing more than ten million people.
More Time, Less Progress
And the longer women work in the lower ranks in a company, the less likely they are to advance into leadership positions. “Women’s chances for advancement start to plummet beyond the first 10-year window of their career,” observed Karin Kimbrough, chief economist at LinkedIn, who the research its 850 million global database.
“Women who don’t ‘sprint’ early on in their career to reach the top ranks become less and less likely to reach leadership positions as they age. If she hasn’t advanced into a senior leadership position within ten years, her chances of reaching that level plummet,” she added.
Women may lose their footing climbing the corporate ladder by taking a childcare break, but even without it, they will likely face a “broken rung” that stops their progress. For every 100 men promoted from an entry-level position to manager, only 87 women were advanced, resulting in a 60 percent male to 40 percent female disparity at the manager level. This leads to fewer women in position to move up the next level and the next.
Instead of getting trapped underneath a broken rung or moving on to another corporation where more broken rungs inevitably wait, there’s a far better way for women to move ahead: pack up their corporate experience, jump off the corporate ladder, and start a business. In other words, become a corporateneur.
Corporate Experience Gives the Edge
Those first ten years invested in climbing the corporate ladder provide invaluable experience – human capital – a woman can take with her into her own business.
“You need to have a desire to create your own path, not be scared to navigate uncharted waters. You won’t know all the answers, but need to have a true love and passion to make a difference and dream big.”
An academic study conducted by Professor Karl Wennberg of the Stockholm School of Economics about high-growth firms (HGF) – and, a startup business is a HGF because it starts with zero sales on day one – found people who’d had experience founding new businesses, a.k.a. serial entrepreneurs, had few advantages in starting up another business.
However, those with prior management experience and experience in the respective industry targeted had “measurable benefits” that yielded a greater likelihood of success, i.e., the corporateneur. That previous experience “provides managers with the skills and know-how necessary to overcome problems in the context of that industry,” Wennberg wrote.
In other words, corporateneurs know what their previous employer is doing wrong and can do it right in their business. Besides the advantage of deep insider knowledge, corporateneurs also have industry contacts and professional networks that can be leveraged for greater success.
An analysis of this year’s Inc. Female Founders 200 list identified some 60 percent of these exceptional female entrepreneurs were corporateneurs, having put in time pursuing corporate careers before launching their own businesses.
Getting started mid-career yields significant advantages to an entrepreneur. While we tend to think of entrepreneurship as a young person’s game and statistics show that younger people are more likely to start businesses, mature people aged thirty-five to sixty-four have a much greater likelihood of future success. Over their careers, they’ve acquired the skills needed to run a business, including greater awareness of market opportunities and easier access to capital and other resources required to get a business off the ground.
Women At the Vanguard Of Entrepreneurship
Women are at the forefront of starting new businesses. Between 2007 and 2019, even before the pandemic, women started businesses at five times the national average, according to the National Association of Women Business Owners.
Since then, they’ve been a driving force in the boom in new business startups, creating about half of all new businesses each year. In 2020 a record 4.4 million new companies were formed, but that record was broken in 2021 when more than five million companies started up. The record level of new company formations continued in 2022 when five million companies were started – a 42 percent increase from pre-pandemic levels.
Through October this year, some 4.7 million new business applications have been filed. If new company applications continue at the same monthly pace through the end of the year, the number will reach or even exceed the past two year’s record levels.
Driven To Personal Fulfillment
The reasons why people start a business are as varied as the 14 million individuals who started businesses since the pandemic. Still, a recent Unity Marketing survey among some 100 corporateneurs who’d left their jobs to pursue entrepreneurship reported their number one motivation was personal fulfillment and to pursue their passion (93 percent), followed closely by a desire for autonomy and independence in their work (86 percent).
These motivations are best expressed by this corporateneur: “You need to have a desire to create your own path, not be scared to navigate uncharted waters. You won’t know all the answers, but need to have a true love and passion to make a difference and dream big.”
The third most important reason to start a business was financial considerations (81 percent,) followed by seeing an opportunity to solve problems and innovate in the market (76 percent).
However, economic considerations dropped sharply when asked which was the most important reason for starting a business. Only 11 percent said it was the most important, while personal fulfillment (40 percent), followed by a desire for autonomy and independence (22 percent), rose to the top.
And these corporateneurs found what they were looking for. Overall, three out of four corporateneurs said their reasons for starting a business have been satisfied.
Don’t Get Sidelined
Starting a business is not without risk in normal times, but especially now, as the economy is under pressure and rising political tensions at home and abroad create even more uncertainty for those considering leaving what might be viewed as a secure job. But that is an open question, as many major corporations are starting to lay off staff.
However, such uncertain times as these might be the best time to make the leap and start a business.
“A recession can be an excellent time to start a business because there are problems within existing businesses that need to be solved,” observed Ted Wolf, co-founder and president of consultancy Guidewise, which provides coaching, leadership training and management tools to entrepreneurs.
Times of rising uncertainty are when people and businesses look for innovative solutions to existing problems. “We innovate in the tough times when we are forced to figure out a ‘better way,’” he added.
Now is just such a time.
Personal Fulfillment Realized
Women’s drive for personal development and fulfillment doesn’t stop just because the economy is tanking, our political leaders are clueless and the world is imploding.
In fact, such uncertain times makes one’s need for personal fulfillment even greater. It also gives entrepreneurs with new ideas a better chance of success because established competitors are likely to pull back in times of turmoil.
“Starting a business is the best personal development journey on the planet—period,” Wolf continued. “As an owner and entrepreneur, the journey to success is full of drama and ups and downs, but all are designed as life lessons that force you to stretch and grow your skills. More specifically, you refine and build new business-related and people-related problem-solving skills.”
For women who’ve hit the glass ceiling or stumbled on the broken rung in their corporate career, the corporateneur path is a way forward. While the odds are long for achieving financial success starting a business – about 20 percent of new businesses fail within the first two years – women may measure their success in other ways besides just making more money.
Plus, one can’t put a price on personal fulfillment, and the advanced skills learned in starting and running a business are transferrable back into the corporation if a woman decides to go that route. But here’s guessing, few of them will choose to do so.
Improve The Odds for Success
My latest book, The Corporateneur Plan: Your Roadmap From Midcareer Professional Entrepreneur, co-authored with Ken Rohl, who founded his business at age 50 and eventually sold it to a Fortune 500 company, is written for women – and men – looking to escape from corporate stagnation to the freedom, independence, and personal fulfillment found through entrepreneurship.
The Corporateneur Plan has reached Amazon bestseller status in Business Mentoring & Coaching, Knowledge Capital and Self-Employment. It’s also received an honorable mention in Free Enterprise. It’s available in paperback, Kindle, and audiobook formats.