Entrepreneurship Over the Last 35 Years — and How We Can Change the Future for Women Business Owners

Source: https://tinyurl.com/4z9s4ahe

Written by: Sharon Miller

ENTREPRENEUR LEADERSHIP NETWORK CONTRIBUTOR
President of Small Business and Head of Specialty Banking & Lending
Sharon Miller is the president of Small Business and head of Specialty Banking and Lending, which includes overseeing Consumer Vehicle Lending, at Bank of America. In addition, she is a member of the company’s management operating committee.

Celebrating 35 years of women's entrepreneurship and taking a look at what more needs to be done to pave the way for a successful generation of future women leaders and entrepreneurs.

With Women's History Month upon us, it's important that we honor, celebrate and recognize the impacts women entrepreneurs make across the business world. Women business leaders play an essential role in their local communities, our economy and the world at large. They serve as a vital part of the world's economic engine and empower the next generation of women to reach their goals as entrepreneurs.

Women made strides toward equality and advanced their mark on business in 1988 when The Women's Business Ownership Act was passed. This act, which was supported by the National Association of Women Business Owners (NAWBO), was created to address the needs of women by eliminating lending practices by banks that made business ownership more difficult for women than men.

This year, as we celebrate the 35th anniversary of The Women's Business Ownership Act as well as Women's History Month, it's important to pay respect and acknowledge our history and recognize its impact on the present. There is still work to be done as we can pave the way for a successful generation of future women leaders and entrepreneurs.

A look back at women's entrepreneurship over the last 35 years

More than three decades ago, the process to start a business changed for the better for women. The Women's Business Ownership Act was passed and empowered women entrepreneurs across the country to pursue their business goals. Prior to its passage, women business owners were required to have a man related to them as a co-signer on their business loans. The act helped reduce discrimination based on gender and allowed women to access capital to start a new business or fund their existing business.

There has been a significant increase in women-owned businesses since that milestone event. A few years after its passage, the number of women-owned businesses in the U.S. reached 6.4 million in 1992 — this represented one-third of all domestic firms and 40% of all retail and service firms, according to the United States Census. As of 2019, the number of women-owned businesses has doubled to nearly 13 million (representing 42% of all U.S. businesses), and a 2022 study showed that over the past three years, the number of women entrepreneurs grew by 48% year-over-year, which outpaced their male counterparts by 22%.

How we change the future for women business owners

Though we've made great strides over the last 35 years, women continue to face greater challenges than their male counterparts — for example, access to capital remains a critical issue for women and minority business owners. According to Bank of America's 2022 Women and Minority Business Owner Spotlight, nearly one-third of women business owners do not believe that women will ever have equal access to capital, and for those who do, they believe on average it will take nine years to achieve equal access. Clearly, we still have much progress to achieve.

To help overcome the disparity in access to capital, women need support and resources to navigate the capital landscape and identify potential sources of funding, such as equity, debt and grant capital. Banks have a responsibility to provide accessible capital solutions. There are a number of resources available right now that many women business owners don't know about. For example, in 2021 Bank of America launched the Access to Capital Directory for Women Entrepreneurs to help connect women to organizations that provide funding for women-owned businesses. Additionally, the Bank of America Institute for Women's Entrepreneurship at Cornell provides the opportunity for women to earn a certificate in business from the Ivy League university. The bank has also recently launched a public marketplace to support and showcase women-owned businesses that participate in programs to drive women's entrepreneurship.

Mentorship can also make a considerable difference in your professional growth. Over the years, I've learned the importance and value of this, both as a mentor and a mentee, and how much more can be achieved when you pay it forward and help lift other women up. This can be done through providing programs and materials, serving as a confidant to a peer or encouraging women to look into new, educational resources.

Education will continue to be key as women work to achieve full equality in business. Whether it's learning about business tactics or how to apply for grants, women must use every available resource to enhance their knowledge and reach as they begin their business endeavors. Through collaboration with fellow women and business partners, they can enhance efficiency, strengthen financial knowledge and deploy their creativity that takes their businesses to unseen levels of new success.

Many women business owners face challenges daily, but they continue to overcome adversity and remain dedicated — as we've observed over the last 35 years. I have especially seen this in my personal and professional life. We have a lot to celebrate, but I am even more excited and exhilarated to see what we accomplish in the next 35 years.

Choose Courage Over Confidence

Source: https://tinyurl.com/2p8hb2zs
Written by: Christie Hunter Arscott

Jonathan Kirn/Getty Images

Summary: Self-doubt is a pervasive and often paralyzing concern, and research has repeatedly shown that it impacts women more than men. So what makes high-achieving women power through their self-doubt? According to the author’s research, they focus on building up their courage, not their confidence. She offers three strategies to help women take bold actions in the face of self-doubt and fear: 1) Don’t underestimate the impact of small, yet significant, acts of courage; 2) Practice courageous acts in all areas of your life; and 3) Try again tomorrow.

Have you ever shied away from taking on a role or opportunity because you didn’t feel confident enough? Perhaps your inner critic told you that you weren’t yet ready, weren’t capable enough, or didn’t have enough experience. Perhaps the voice in your head asked: “Why me?”

If you can relate, you’re among the majority of women with whom I’ve worked. I recently asked more than 120 women, from areas including the U.S., UK, Australia, Georgia, Italy, India, Jamaica, and Bermuda: If you’ve ever avoided risks, what factors and reasons contributed to this? More than 70% reported that self-doubt, or not having enough belief in themselves, their capabilities, or their skills, was a driving factor.

As one high-profile executive told me: “Every day I doubt myself. I doubt that I am good enough to be where I am.”

This shouldn’t come as a surprise. We know self-doubt is a pervasive and often paralyzing concern, particularly for women. A study by psychologists at Cornell and Washington State highlighted higher levels of self-doubt in women. Research has also shown that women will apply for a job only if they meet all of the qualifications, while men will apply when they fulfill only 60%. Another recent study identified a substantial gender gap when it comes to self-promotion, with women systematically providing less favorable assessments of their own past performance and potential future ability. Ultimately, men take more chances on themselves, and that pays dividends in the long run.

Focus on Courage, Not Confidence

While this pattern of self-doubt emerged again and again in studies, my interactions, and my client work, I also noticed another commonality: These women’s self-doubts weren’t sabotaging their success. The vast majority of successful women leaders I’ve interviewed and coached have built vibrant and fulfilling careers even while facing self-doubt.

What these women also had in common is courage in the absence of confidence — a trait that is often weaponized against women and used to explain why they fail to achieve career goals. My work has found that successful women take decisive action to move forward even while grappling with fears and doubts and questioning their own “readiness.”

“As women, we often feel like we have to be 100% ready in order to move forward. But, if you are 50% or 75% there, jump. Just do it,” said Megan Costello, former executive director of the Boston Mayor’s Office for Women’s Advancement.

An added bonus? Confidence is the byproduct of courage. The executives I’ve spoken with shared that with each challenge accepted and conquered, they gained confidence. “Gaining more responsibility has given me reason to believe in myself. Now, I’m the president of a brand,” said Julie Hauser-Blanner, former president of Brioche Dorée, a Canadian bakery chain.

By refocusing our internal narratives on courage instead of confidence, women can take bold actions in the face of self-doubt and fear. Here are three strategies to get you started.

Don’t underestimate the impact of small, yet significant, acts of courage.

Micro acts of courage — seemingly small-scale acts that have incremental impacts over time and long-term returns — are key to unlocking a courageous mindset. As Su-Mei Thompson, CEO of Media Trust, shared: “It is not just about taking a few big risks but about pushing yourself each day to get outside of your comfort zone.”

Early in her career at Unilever, Leena Nair often found herself in rooms with few other women, where it felt intimidating to speak up. She came up with a method to encourage her own micro acts of courage. “I used to have a little book in which every time I spoke up, I would draw a star,” she told me during our discussion at the Global Unilever Headquarters in London. “If I opened my mouth five times, then I would draw five stars. If I made a point that really resonated, I gave myself double stars. By doing this, I kept myself accountable.” These micro acts led to long-term rewards — Nair rose to become the first female, first Asian, and youngest-ever CHRO of Unilever, and then went on to become CEO of Chanel.

Courage begets courage. It’s a muscle that gets stronger each time you use it, no matter how small the act.

Practice courageous acts in all areas of your life.

Nervous to start in your working environment? Start with courageous acts outside work. Courage is a transferable mindset that then permeates all aspects of your life.

One woman with whom I worked made a goal of going on a dinner or date or lunch with someone new every week so that she could expand her friendships and dating prospects in a new city, while becoming more connected. Others will go out of their comfort zone and join a gym or fitness class that they previously would have shied away from. Others started saying no more often and protecting time for themselves, rather than trying to please others.

DEI executive Karen Brown shared that she pushes herself outside of her comfort zone in her personal life by “constantly stretching myself to learn, especially that which is unfamiliar to me. This could range from traveling to countries with cultures that are completely opposite of what I’m accustomed to, attending an event, listening to and/or reading content outside my area of expertise.”

Try again tomorrow.

A strategy used by Dr. Elizabeth O’Day, who founded Olaris, Inc., a precision diagnostics company working to change how diseases are treated, is to continue to make a daily commitment to going beyond her comfort zone, even when met with resistance. Now in her 30s, O’Day serves as the company’s CEO, co-chairs the World Economic Forum’s Global Future Council on Biotechnology, and is a member of Scientific American’s steering committee for the publication’s “Top 10 Emerging Technologies.” However, her impressive résumé doesn’t tell the full story of the challenges she has overcome.

“Every day as a young female scientist CEO in biotech, there are challenges, and it takes a lot of courage to face these challenges,” she said. When her company was in the startup phase, O’Day often faced investors who would ask “ridiculous or sometimes insulting” questions, and even challenge her expertise and achievements. “Every time that I was asked to derive mathematical equations or list a dozen metabolic pathways and their links to disease, I would do it without error. Yet, rarely did it translate into the investment that I was seeing male counterparts with far less data or degrees receive.” O’Day’s experience tracks with the numerous studies showing that women receive more scrutiny, including doubt-generating statements, than their male counterparts.

Does O’Day always feel confident? No. As she shares, “I often remember the quote by Mary Anne Radmacher, ‘Courage does not always roar. Sometimes courage is the quiet voice at the end of the day saying, I will try again tomorrow.’”
. . .

As Anaïs Nin, a twentieth-century French-Cuban-American diarist and writer, said: “Life shrinks or expands in proportion to one’s courage.” Your career is no different. It’s time to refocus your efforts from seeking an elusive feeling of confidence to taking decisive action with courage.

About the author: 

Christie Hunter Arscott is an award-winning advisor, speaker, and author of the book Begin Boldly: How Women Can Reimagine Risk, Embrace Uncertainty, and Launch A Brilliant Career. A Rhodes Scholar, Christie has been named by Thinkers50 as one of the top management thinkers likely to shape the future of business.
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Why There's Never Been a Better Time to Encourage Female Founders

Source: https://tinyurl.com/erjmk4yk

Written by: BY CAROL SANKAR, FOUNDER, THE CONFIDENCE FACTOR@CAROLSANKAR

When female founders are given the right opportunities, they quickly turn the business into a worthwhile investment.

Whether operating as solopreneurs or leading enterprise companies, the business world is seeing more female founders than ever before. Many female founders are even finding themselves on lists for the best-led companies.


Despite this, women continue to face many obstacles as they try to get their business ideas off the ground. While VC funding has increased in 2021, total VC allocations to women-led companies continue to be in the single digits, percentage-wise. And female-led firms continue to be the minority.

However, there is no denying the obvious: this is the best time to empower and encourage female founders.

Outperforming the average.

Women-owned businesses have continually demonstrated their potential for success. According to the National Association of Women Business Owners, there are over 11.6 million firms in the United States that are owned by women, generating roughly $1.7 trillion in yearly sales. Of all companies in the United States with revenue exceeding $1 million, one in five are owned by a woman.

Research has consistently backed the importance of having women in leadership positions -- even in companies that aren't woman-owned.An analysis from McKinsey & Company shows that companies with the most gender-diverse executive teams are 25 percent more likely to achieve above-average profits than their less gender-diverse peers. Interestingly, these odds for above-average success have increased each time this analysis has been performed.

Women have repeatedly shown that they have the talent, ingenuity and grit to turn an idea into a thriving, successful business. Quite often, the only thing standing in their way is a lack of funding. However, as the results have shown, any funding that goes into a woman-owned business will deliver significant returns.

Finding underserved niches.

Part of what makes female founders such a smart investment is that they often serve overlooked market niches. It isn't that these niches aren't popular or profitable -- rather, they just have a tendency to get overlooked by the mainstream business world. Women are also often able to draw from their own unique experiences to find (and fill) gaps in otherwise crowded niches.

This became especially apparent during a recent conversation with Alyssa Maccarthy, co-founder of Sunnie Hunnies. The founder of a business that focuses on swimwear for newborns to five-year-olds, Maccarthy and her sister wanted to design children's swimwear in part due to a lack of soft swimwear that was gentle on the delicate skin of babies and toddlers. This was a problem that they had identified firsthand through their own experiences -- it wasn't thought up in a board meeting or pitch session.

The most successful business ideas tend to come from a founder trying to solve their own problem, and it was no different for Maccarthy. However, there is no denying that focusing on how swimwear affects the skin of young children is something that probably would not have been a top of mind priority for male founders.

This is just one example of how women will so often use their own unique experiences and insights to generate new business ideas. From introducing original services to providing a noteworthy improvement to existing products, such ideas also form an immediate connection with customers who feel underserved by what is currently offered by major brands.

Female founders are the future.

While female founders remain the minority, the numbers show that more and more investors are paying attention. Data from 2020 and 2021 reveals that startups with female founders are exiting one year faster than the market average while seeing the value of these exits skyrocket 144 percent -- over 40 percentage points higher than the rest of the market.

When female founders are given the right opportunities, they quickly turn the business into a worthwhile investment. As in so many other areas, early adopters (or in this case, early investors) are poised to see the biggest returns.

Female founders have proven time and time again that they have what it takes to launch and lead successful businesses -- even with the systemic challenges that the corporate world often stacks against them.

However, for every success story we find, there are many other women who don't have the encouragement they need to make a winning business idea a reality. These women need meaningful support. From providing access to financial resources to mentorship, we can create more success stories in the future.

FEB 22, 2022
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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Keep board meetings focused on strategy, avoid riffs, specialists say

Source: https://tinyurl.com/y4kjjlkh

Written by: Robert Freedman@RobertFreedman

Panelists at the MIT Sloan CFO virtual summit recommend getting financial information to members early to make board meetings more productive.

Share company financial information and answer questions before quarterly meetings to equip board members to focus on forward-looking strategic issues, CFOs and board specialists said this week at the MIT Sloan CFO virtual summit.

Send an email several days before the meeting, and give board members a deadline to ask questions about it, said Joanne Cheng, CFO of PatientPing, a SaaS company for medical providers to track their patients' care. The extra time lets the executive team collaborate on the answers and get everyone on the same page before the meeting.

"The three-hour board meeting is no longer a readout of any financials," Cheng said.

Another way to complete the financial review ahead of time is to hold a pre-meeting.


Using the board meeting to look at a company's financial performance over the last quarter is a poor use of time, Deb Besemer, chair of video hosting company Brightcove, said. It's more important for the board to use the time to consider the company's strategic direction.

"At the end of every board meeting, it's always, ‘I have to get to the airport,' and the last couple of presentations have to be rushed," Besemer said. "The management team has sent out a deck of 80 slides, and you never get to the strategic ones."

For the pre-meeting to be effective, the CFO must speak to the board at a level the members understand. "That's a challenge," she said. "Not everyone has credentials in finance."

Bring consistent metrics

At these meetings, CFOs should present the same metrics each time; this gives board members a clear picture of company performance.

"The last thing you want to do is introduce different cuts on information and then invest time in a meeting to educate people on what they're looking at," Jason Park, CFO of sports betting operator DraftKings, said. "Stick to them quarter over quarter so people have some pattern recognition."

CFOs can establish upfront what measurements are most important to each board member and try to design metrics to capture what they want.

If the CFO identifies other measurements to track, let the board know your intention, even if you don't have the systems in place to do that tracking yet.

"Lay out a vision ... that you want this data but aren't able to report on it yet," said Cheng.

Group focus

While each board has its own dynamic, the CEO and CFO shouldn't enter a meeting in disagreement over a major issue, such as an acquisition.

A big disagreement can signal a problem between the two most important executives in the company. "That's a thorny issue," Besemer said.

The CEO and CFO disagreeing on smaller issues while the board's in session, on the other hand, can be a positive; it gives members a chance to see a matter from different perspectives and shows that the CEO values the executive team's views.

"It shades risks differently," said Matt Vettel, managing partner of private equity investor Great Hill Partners. "They're challenging each other, looking for the best solution. That can be very helpful."

Although it's important for CFOs to develop relationships with each board member, they should avoid trying to solve problems with individual members outside of the board context.

"It's a common trap that really puts the CFO in a bad position," Vettel said. "You're better off saying, ‘That's a very interesting viewpoint, something the board should discuss. Let me put together some information to support your viewpoint and let's have the board make the decision.'"

The biggest mistake CFOs can make is being less than forthright on the company's financial position. There's only one recourse for a CFO who misleads the board on a financial matter.

"If trust is broken with the CFO, it's really hard to get that back," Besemer said. "In my experience, the CFO has to go at that point."

Ruth Bader Ginsburg’s Advice for Living

Source: https://tinyurl.com/yxwq2p2h

Written by: By Ruth Bader Ginsburg

Ruth Bader Ginsburg appeared before the Senate Judiciary Committee for her Supreme Court nomination hearings in 1993.Credit...Stephen Crowley

“Did you always want to be a judge” or, more exorbitantly, “a Supreme Court justice?” Schoolchildren visiting me at the court, as they do at least weekly, ask that question more than any other. It is a sign of huge progress made. To today’s youth, judgeship as an aspiration for a girl is not at all outlandish. Contrast the ancient days, the fall of 1956, when I entered law school. Women accounted for less than 3 percent of the legal profession in the United States, and only one woman had ever served on a federal appellate court.

Today about half the nation’s law students and more than one-third of our federal judges are women, including three of the justices seated on the United States Supreme Court bench. Women hold more than 30 percent of law school deanships in the United States and serve as general counsel to 24 percent of Fortune 500 companies. In my long life, I have seen great changes.

How fortunate I was to be alive and a lawyer when, for the first time in United States history, it became possible to urge, successfully, before legislatures and courts, the equal-citizenship stature of women and men as a fundamental constitutional principle. Feminists, caring men among them, had sought just that for generations. Until the late 1960s, however, society was not prepared to heed their plea.

What enabled me to take part in the effort to free our daughters and sons to achieve whatever their talents equipped them to accomplish, with no artificial barriers blocking their way? First, a mother who, by her example, made reading a delight and counseled me constantly to “be independent,” able to fend for myself, whatever fortune might have in store for me.Second, teachers who influenced or encouraged me in my growing-up years. At Cornell University, my professor of European literature, Vladimir Nabokov, changed the way I read and the way I write. Words could paint pictures, I learned from him. Choosing the right word, and the right word order, he illustrated, could make an enormous difference in conveying an image or an idea.

At Columbia Law School, my professor of constitutional law and federal courts, Gerald Gunther, was determined to place me in a federal court clerkship, despite what was then viewed as a grave impediment: On graduation, I was the mother of a 4-year-old child. After heroic efforts, Professor Gunther succeeded in that mission.

Another often-asked question when I speak in public: “Do you have some good advice you might share with us?” Yes, I do. It comes from my savvy mother-in-law, advice she gave me on my wedding day. “In every good marriage,” she counseled, “it helps sometimes to be a little deaf.” I have followed that advice assiduously, and not only at home through 56 years of a marital partnership nonpareil. I have employed it as well in every workplace, including the Supreme Court. When a thoughtless or unkind word is spoken, best tune out. Reacting in anger or annoyance will not advance one’s ability to persuade.

Advice from my father-in-law has also served me well. He gave it during my gap years, 1954 to ‘56, when my husband, Marty, was fulfilling his obligation to the Army as an artillery officer at Fort Sill, Okla. By the end of 1954, my pregnancy was confirmed. We looked forward to becoming three in July 1955, but I worried about starting law school the next year with an infant to care for. Father’s advice: “Ruth, if you don’t want to start law school, you have a good reason to resist the undertaking. No one will think the less of you if you make that choice. But if you really want to study law, you will stop worrying and find a way to manage child and school.” And so Marty and I did, by engaging a nanny on school days from 8 a.m. until 4 p.m.

Work-life balance was a term not yet coined in the years my children were young; it is aptly descriptive of the time distribution I experienced. My success in law school, I have no doubt, was in large measure because of baby Jane. I attended classes and studied diligently until 4 in the afternoon; the next hours were Jane’s time, spent at the park, playing silly games or singing funny songs, reading picture books and A. A. Milne poems, and bathing and feeding her. After Jane’s bedtime, I returned to the law books with renewed will. Each part of my life provided respite from the other and gave me a sense of proportion that classmates trained only on law studies lacked.

I have had more than a little bit of luck in life, but nothing equals in magnitude my marriage to Martin D. Ginsburg. I do not have words adequate to describe my supersmart, exuberant, ever-loving spouse. Early on in our marriage, it became clear to him that cooking was not my strong suit. To the eternal appreciation of our food-loving children (we became four in 1965, when our son, James, was born), Marty made the kitchen his domain and became chef supreme in our home.

Marty coached me through the birth of our son, he was the first reader and critic of articles, speeches and briefs I drafted, and he was at my side constantly, in and out of the hospital, during two long bouts with cancer. And I betray no secret in reporting that, without him, I would not have gained a seat on the Supreme Court.

Ron Klain, then associate White House counsel, said of my 1993 nomination: “I would say definitely and for the record, though Ruth Bader Ginsburg should have been picked for the Supreme Court anyway, she would not have been picked for the Supreme Court if her husband had not done everything he did to make it happen.”

That “everything” included gaining the unqualified support of my home state senator Daniel Patrick Moynihan and enlisting the aid of many members of the legal academy and practicing bar familiar with work I had done.

Supreme Court Justice Ruth Bader Ginsburg in her chambers on Friday, August 23, 2013.Credit...Todd Heisler/The New York Times

I have several times said that the office I hold, now for more than 23 years, is the best and most consuming job a lawyer anywhere could have.

The court’s main trust is to repair fractures in federal law. Because the court grants review dominantly when other jurists have divided on the meaning of a statutory or constitutional prescription, the questions we take up are rarely easy; they seldom have indubitably right answers. Yet by reasoning together at our conferences and, with more depth and precision, through circulation of, and responses to, draft opinions, we ultimately agree far more often than we divide sharply.

When a justice is of the firm view that the majority got it wrong, she is free to say so in dissent. I take advantage of that prerogative, when I think it important, as do my colleagues.

Despite our strong disagreements on cardinal issues — think, for example, of controls on political campaign spending, affirmative action, access to abortion — we genuinely respect one another, even enjoy one another’s company.

Collegiality is crucial to the success of our mission. We could not do the job the Constitution assigns to us if we didn’t — to use one of Justice Antonin Scalia’s favorite expressions — “get over it!”

Earlier, I spoke of great changes I have seen in women’s occupations. Yet one must acknowledge the still bleak part of the picture. Most people in poverty in the United States and the world over are women and children, women’s earnings here and abroad trail the earnings of men with comparable education and experience, our workplaces do not adequately accommodate the demands of childbearing and child rearing, and we have yet to devise effective ways to ward off sexual harassment at work and domestic violence in our homes. I am optimistic, however, that movement toward enlistment of the talent of all who compose “We, the people,” will continue.

Ruth Bader Ginsburg, who has served as an associate justice of the Supreme Court of the United States since 1993, is the author, with Mary Hartnett and Wendy W. Williams, of the forthcoming book “My Own Words,” from which this essay is adapted.

How Can a CFO Help in a Time of Crisis?

Source: https://tinyurl.com/y7228mum

Written by: Bill Palmer,

The current economic uncertainty has many businesses closely evaluating their current and future staffing needs. While some positions are being cut, especially in the hospitality and travel sectors, many businesses are strategically hiring financial professionals into executive leadership positions during the downturn.

Companies that previously had tasked their CEOs with handling finance functions are now hiring dedicated CFOs (or outsourcing CFO roles to reputable third parties) to ensure they will be able to weather the new economic storm. With ambiguity over how long businesses will need to keep their offices and storefronts closed paired with unpredictability in the stock market, business owners and CEOs are feeling increased pressure to make critical strategic financial decisions for the health of their organizations.

An experienced CFO can provide multi-scenario modeling to aid in tactical decision-making, offer an unbiased financial perspective, act as a confidential sounding board for the CEO, and handle negotiations with essential parties to benefit the overall organization.

Modeling & Planning

Unlike accounting, which is fundamentally about the past, finance is focused on planning for the future.

Seasoned CFOs can use current financial indicators and their previous experience to model and plan for the various scenarios that a business may face in the coming months and years. These plans can inform critical decision-making related to spending cuts, rightsizing the labor force, and timing planned business investments. CFOs can forecast the short and long-term impacts of these decisions to better position the company in response to economic shocks.

With new federal and state business relief packages being rolled out, new employee protections being passed, and additional financing options being offered by payment processors and vendors, an experienced CFO can help navigate the myriad options available to aid businesses in this difficult time.

In this way, a CFO not only mitigates the effect of a downturn of a business proactively but can also help right the ship when the company is struggling in a sea of a difficult financial conditions. 

 
Perspective

A consulting CFO is a neutral, independent voice in the room. Experienced CFOs typically follow the facts without pushing a personal agenda or engaging in office politics anyways, but consulting CFOs are even more likely to provide an unbiased perspective. Business owners and executive leadership teams can be reassured that a CFO consultant is acting in the best interest of the company and its stakeholders (owners, employees, and investors) rather than for job protection or other personal agendas.

Outsourcing the CFO role also provides an experienced and confidential sounding board for the CEO, which is especially important in family-owned businesses. While all business owners and CEOs feel some measure of emotional isolation, family businesses exacerbate this situation by adding personal relationship dynamics into the mix. Business leaders at family-owned companies may find themselves needing to balance family relationships and business success, especially in times of crisis. In this scenario, a CFO can provide the confidential conversational space that a CEO needs to make difficult decisions and prioritize the health of the business. Additionally, a consulting CFO can even act as a scapegoat for unpopular but necessary decisions, allowing the CEO to preserve existing internal relationships.

Third Party Negotiations

Because of their experience a CFO can also add credibility to the perceived quality of management and build bridges with capital providers to gain acceptance of forecast projections and strategic plans. The result is a company with less perceived risk and a higher perceived value, which is crucial in establishing mutually beneficial financial solutions while working with external parties.

A consulting CFO has credibility with lenders and personal relationships with banks to facilitate negotiations with these key players. The scope of a CFO’s experience will also aid in negotiating with third parties like landlords, vendors, and customers through difficult times when financing and payment options may need to be changed.

The heart of resilient leadership: Responding to COVID-19

Source: https://tinyurl.com/uqfp4py

Written by: Punit Renjen

Millennial Women Are Poised To Be The Most Financially Independent Women In History

Source: https://tinyurl.com/s6bostg

Written by: Megan Gorman  Senior Contributor Personal Finance

A model is seen backstage ahead of the Prabal Gurung show during the Mercedes-Benz Fashion Week... [+]

In late 2015, a new fashion trend hit: designer t-shirts emblazoned with the phrase “The Future Is Female.” The message was on point and women of all ages, especially those in their 20s and 30s embraced them.

It’s no surprise that these four words resonated with Millennial women. For the first time in decades, feminism is on the upswing. From career progression to child rearing, Millennial women are taking on the world. They are making themselves the new future.

But the phrase “The Future Is Female” is not a new expression. It was first coined over forty years ago in 1975. That Millennial women of today are claiming this 40-year old slogan is an interesting development. Today’s twenty and thirty-somethings are living in a completely different world relative to where women were financially in the mid-70s. In fact, today’s young women could become some of the most financially independent women in history.

“Millennial women have more freedom with their finances than past generations ever did,” says Misty Lynch, a John Hancock financial advisor consulting for Twine’s Savings and Investing app. “A married woman couldn’t even get her own credit card before 1975 without permission, and single women didn’t have it much easier when it came to financial independence.”

A look at recent data regarding Millennial women finds that they are enjoying opportunities unavailable to women before them. Pew Research has found that these women are more likely than men to have finished at least a bachelor’s degree by 7 percentage points. Further, 71% of Millennial women are in the workplace and they are marrying later versus previous generations as they focus on growing their careers.

All of this puts them in a different financial situation than previous generations. While the wind may be at their back, it is important that Millennial women have a clear understanding of what they need to do to maximize their financial lives, including taking their weaknesses head on.

Carrie Schwab-Pomerantz, CFP, president of the Charles Schwab Foundation and SVP of Charles Schwab & Co, Inc., addresses the potential pitfalls. “Longevity plus wage and opportunity discrimination means these women need to work harder, save more and be in charge of their finances because financial independence isn’t just a matter of strength; it’s a matter of necessity” says Schwab-Pomerantz.

Financial independence is not a sudden result but rather a lifelong journey where certain decisions and behaviors propel the individual ahead. Understanding where Millennial women need to develop more skills will help them on this road.

Developing Goals And Being Fearless About Investing
John Hancock’s Twine Savings and Investing app recently studied the financial behavior of young women ages 19-36. Forty-five percent of women surveyed said that when they set a financial goal they are motivated to achieve it. Goal orientation is key in amassing wealth as financial independence is a slow progressive journey.

On the whole, Millennial women display high confidence in areas of budgeting and bill paying but at times demonstrate a lack of confidence versus their male peers in terms of investing. The most appropriate next step for these women is to use their money strengths to gain confidence in investing and putting their money to work for them.

Alison Norris, CFP and Advice Strategist at SoFi, agrees. “Instead of shying away from the topic with others, [Millennial women should] be confident discussing it at the dinner table with peers, asking their parents how they are paying for retirement, and initiating a salary conversation with their manager. When they open it up and start talking in a human way about money, the shackles fall off.”

This is even more imperative as Millennial women enter their prime child rearing years. Twine found that currently only one third of women in this group are investing outside of a 401(k). Without having clear financial goals, the disparity over a lifetime versus their male peers can cost them hundreds of thousands of dollars.

Schwab-Pomerantz advises, “Always try to live below your means. Living below your means and saving the difference is key to achieving long-term goals. If helpful, view your money in terms of trade-offs. If I buy X, what am I giving up? Does spending money in this way support my long-term goals?”

And this means Millennial women are going to have to move beyond one issue that came out of the Twine study: that you need at least a $1,000 to invest. With the advent of easy access to the markets at a low cost, these hurdles disappear.

Lynch concurs with this thinking. “This assumption creates a false sense of intimidation for first-time investors. Even $10 or $20 can get you going.”

As a result, by living below their means, even if just a few dollars, Millennial women need to capture these funds and put them to work. The advent of investing and savings apps makes this even easier.

Financial Independence Is A Journey

As Chantel Bonneau, financial advisor with Northwestern Mutual and a Millennial herself, noted, “Finances are similar to fitness. Getting into your ideal shape doesn’t happen overnight. It is a process that requires, time, patience, and commitment. It’s also about moderation.”

Millennial women are poised to be the most financially independent generation in history. At the same time, “The Future Is Female” T-shirts continue to sell. While it might be a fun fashion trend, in terms of financial independence, Millennial women need to embrace the opportunities they have today to grow their wealth

'Persuader,' 'strategist' roles to lead finance departments in 2020

Source: https://tinyurl.com/tp6agz6

Corporate finance departments are experiencing a "skills gap" predicted to grow in 2020, according to research from Gartner Finance. These competencies, grouped into five categories, can help finance teams thrive in 2020 and beyond.​

The survey, based on information gathered from more than 1,000 finance employees, helped Gartner sort these competencies into categories, which they call personas, to help CFOs and finance leaders understand their departments' strengths and weaknesses. These five personality types are: builder, doer, learner, persuader and strategist.


Some skills, such as those relating to functional expertise, are well-covered, and are less likely to be in high demand in the future, Gartner said. But skills relating to IT fulfillment and finance analytics are in increasing demand.

"Although it’s probably no surprise to most finance leaders that technical skills relating to data analytics, IT fulfillment and IT innovation are in short supply, it’s not time to be complacent," said Melanie O’Brien, vice president at Gartner Finance. "Finance leaders should review the competencies of their current teams to understand what personas they have and where they need to build capability for the future."

While the five personas Gartner describes may not apply to all finance departments, "they do provide a template for finance leaders to think about what types of people and skills they will need in the future, and compare that to what they have available now," O’Brien said. "This lays the groundwork for building the finance function of the future."

The more pronounced these skill gaps become, the harder the impact will be to mitigate, O'Brien said.

 

The five personas

Builder

Skilled in business navigation, cross-cultural awareness, social intelligence and virtual collaboration, with an understanding of the nuances that drive the engagement of different groups (e.g., millennials and Gen Z).

Doer

Cross-functional expertise and the ability to exercise good judgment while exhibiting grit and resilience. Can balance timeliness with good decision-making. Talented project managers, able to delegate effectively and balance multiple responsibilities.

Learner

Agile, adaptable and confident, with a propensity toward entrepreneurship by suggesting changes in the department and understanding the risks and probabilities of success.

Persuader
Fluent with multiple business functions,able to find meaningful insights from data analytics and KPIs. Understands evidence structuring and builds a comprehensive body of evidence when creating insights and solutions.

Strategist

Excels at business coordination, IT and vendor management. Easily connects finance’s multiyear plan to business objectives and can suggest useful system modifications. Can build mutually beneficial relationships with IT vendors and maintain the kind of finance IT know-how that allows for vendor contract negotiation based on cost-benefit analysis.

Women on the move (Soledad Tanner)

Amazing video presented this morning at the “2019 Women on the Move” award ceremony Luncheon at the Hilton Americas Houston. It was truly an incredible honor to be among such an accomplished group of “dangerous women”. Video filmed by Lisa Malosky and Don Friedell of Lisa Malosky Productions.

Thank you, Graciela Saenz, for nominating me, Cathy Maris for your heartfelt letter of recommendation and Dr. Cindy Childress to supporting me with your talented ghost-writing skills. To all that were there to celebrate this special moment with me: Dr. Dorothy Caram, Helen Cavazos, Graciela Saenz, Lenora Sorola Pohlman, Sandra Smith-Cooper, Angelica Noyola, Angelica Vasquez, Arcy Munoz, and of course my Gabriel Lopez & mi mother Yolanda Cedeno that flew from Ecuador to be here today. 

Congratulations to all the 2019 Women on the Move and Rising Star: Brenda Hellyer, Jennifer Kirk, Jenny Dial Creech, Charlene Jackson, Pamela Anne Quiroz, Kathryn McNeil, Rhonda Smith, Rebeca Aizpuru Huddle, Paula McCann Harris, and our Rising Star: Victoria Chen.

 Thank you to all the people that worked tireless to make this a reality: Paula Mendoza, Ileana Trevino, Carrie Potter, Sheila Manning, Sara Wise, Frances Castaneda Dyess, Nory Angel, Wendy Dawson, Dr. Melanie Johnson, Beatriz Garza, Liz Cloud, Caroline “Baker” Hurley, Debi Wallace - Barfield Photography and the support team from Possible mission: Ana Fernandez & Sylvia Perez

Soledad Tanner, MIB

Deepak Chopra: Your bad money habits could be hurting your health

Source: https://tinyurl.com/y6tvhzgg

 

Why financial wellness is important to your health, according to Deepak Chopra

If you’re worrying about money, you’re not alone. Finances are often cited as the No. 1 cause of stress.

Yet, that anxiety may be doing more than keeping you up at night. It is also likely affecting your overall well-being.

“If you’re stressed about your finances, of course that’s going to cause your blood pressure to go up and put you at risk for so many diseases,” said health and wellness guru Deepak Chopra, co-founder of The Chopra Center for Wellbeing and founder of The Chopra Foundation.

A number of illnesses — such as migraines, digestive problems and heart disease — have been associated with stress.

People who are financially secure spend money on experiences, not necessarily on products.

The good news is that there are things you can do — both with your finances and to get your stress under control, according to Chopra, a New York Times best-selling author whose books include “Perfect Health” and his latest, “Metahuman: Unleashing Your Infinite Potential.”
Live within your means

Americans owe more than $4 trillion in consumer debt as of July 2019, according to the Federal Reserve.

The use of credit cards is also rising among young adults — 52% of those in their 20s now have credit cards, compared to 41% in 2012, data from the New York Fed show.

However, to be financially well, you should live within your means, Chopra said.

Those who are financially secure “usually don’t spend money that they haven’t earned, to buy things that they don’t need, to impress people that they don’t like,” he said.

Save money

While every financial expert advises saving money, including for emergencies and retirement, it may be easier said than done.

In fact, 28% of Americans have no emergency savings, a July survey from personal financial website Bankrate.com found.

When it comes to retirement, 26% of non-retirees say they have nothing saved, according to the Fed.

However, saving is crucial to your financial health.

“I have also seen in my life that in cultures where people save 10% of their monthly salary and put it in reasonably low-risk investments, in the long term they do much better,” Chopra said.

Protect yourself

Financial security is more than just money in the bank or in investments. It also means protecting yourself with insurance in case you are disabled or get sick, Chopra said.

You may get health insurance through your employer or you can purchase it through the health-care exchanges made available through the Affordable Care Act.

Disability insurance is also important: One in 4 adults will become disabled at some point before they reach retirement age, according to the Social Security Administration. There are both short- and long-term plans, which may also be offered through your employer.

If you are buying any insurance on your own, be sure to do your homework and shop around for the best plans that work for you.

Spend on experiences

Being financially healthy doesn’t mean you can’t spend money.

However, Chopra suggests laying out cash on things like restaurants and vacations, rather than on physical objects.

“People who are financially secure spend money on experiences, not necessarily on products … particularly experiences that enhance your social well-being and physical well-being,” he said.

Meditate

The best way to address your stress is to meditate, according to Chopra.

It decreases blood pressure, hypertension and insomnia — as well as reduces the production of stress hormones, like adrenaline and cortisol, he notes.

Deepak Chopra leads a meditation in Telluride, Colorado.
Courtesy: Deepak Chopra

Chopra has also advised to stop multitasking. Instead, focus on one thing at a time.

If you find you are starting to go down the stress rabbit hole, then stop what you are doing, take a few deep breaths, observe the sensations in your body and smile, and then proceed with awareness and compassion, he wrote on The Chopra Center website.

Increase joy

By increasing your joy, you’ll be less likely to get caught up in any of the ups and downs of the stock market, Chopra said.

To do that, there are a few things in particular you should focus on: pay attention to people, show appreciation and tell others you care about them.

“That’s the fastest way to be happy — to make other people happy,” he said.

You Don’t Find Your Purpose — You Build It

Source: https://tinyurl.com/y748xbuj

By: John Coleman

“How do I find my purpose?”

Ever since Daniel Gulati, Oliver Segovia, and I published Passion & Purpose six years ago, I’ve received hundreds of questions — from younger and older people alike — about purpose. We’re all looking for purpose. Most of us feel that we’ve never found it, we’ve lost it, or in some way we’re falling short.

But in the midst of all this angst, I think we’re also suffering from what I see as fundamental misconceptions about purpose — neatly encapsulated by the question I receive most frequently: “How do I find my purpose?” Challenging these misconceptions could help us all develop a more rounded vision of purpose.

Misconception #1: Purpose is only a thing you find.

On social media, I often see an inspiring quotation attributed to Mark Twain: “The two most important days in your life are the day you are born and the day you find out why.” It neatly articulates what I’ll call the “Hollywood version” of purpose. Like Neo in The Matrix or Rey in Star Wars, we’re all just moving through life waiting until fate delivers a higher calling to us.

Make no mistake: That can happen, at least in some form. I recently saw Scott Harrison of Charity Water speak, and in many ways his story was about how he found a higher purpose after a period of wandering. But I think it’s rarer than most people think. For the average 20-year-old in college or 40-year-old in an unfulfilling job, searching for the silver bullet to give life meaning is more likely to end in frustration than fulfillment.

In achieving professional purpose, most of us have to focus as much on making our work meaningful as in taking meaning from it. Put differently, purpose is a thing you build, not a thing you find. Almost any work can possess remarkable purpose. School bus drivers bear enormous responsibility — caring for and keeping safe dozens of children — and are an essential part of assuring our children receive the education they need and deserve. Nurses play an essential role not simply in treating people’s medical conditions but also in guiding them through some of life’s most difficult times. Cashiers can be a friendly, uplifting interaction in someone’s day — often desperately needed — or a forgettable or regrettable one. But in each of these instances, purpose is often primarily derived from focusing on what’s so meaningful and purposeful about the job and on doing it in such a way that that meaning is enhanced and takes center stage. Sure, some jobs more naturally lend themselves to senses of meaning, but many require at least some deliberate effort to invest them with the purpose we seek.

Misconception #2: Purpose is a single thing.

The second misconception I often hear is that purpose can be articulated as a single thing. Some people genuinely do seem to have an overwhelming purpose in their lives. Mother Teresa lived her life to serve the poor. Samuel Johnson poured every part of himself into his writing. Marie Curie devoted her energy to her work.

And yet even these luminaries had other sources of purpose in their lives. Mother Teresa served the poor as part of what she believed was a higher calling. Curie, the Nobel prize–winning scientist, was also a devoted wife and mother (she wrote a biography of her husband Pierre, and one of her daughters, Irene, won her own Nobel prize). And Johnson, beyond his writing, was known to be a great humanitarian in his community, often caring personally for the poor.

Most of us will have multiple sources of purpose in our lives. For me, I find purpose in my children, my marriage, my faith, my writing, my work, and my community. For almost everyone, there’s no one thing we can find. It’s not purpose but purposes we are looking for — the multiple sources of meaning that help us find value in our work and lives. Professional commitments are only one component of this meaning, and often our work isn’t central to our purpose but a means to helping others, including our families and communities. Acknowledging these multiple sources of purpose takes the pressure off of finding a single thing to give our lives meaning.

Misconception #3: Purpose is stable over time.

It’s common now for people to have multiple careers in their lifetimes. I know one individual, for example, who recently left a successful private equity career to found a startup. I know two more who recently left business careers to run for elective office. And whether or not we switch professional commitments, most of us will experience personal phases in which our sources of meaning change — childhood, young adulthood, parenthood, and empty-nesting, to name a few.

This evolution in our sources of purpose isn’t flaky or demonstrative of a lack of commitment, but natural and good. Just as we all find meaning in multiple places, the sources of that meaning can and do change over time. My focus and sense of purpose at 20 was dramatically different in many ways than it is now, and the same could be said of almost anyone you meet.

How do you find your purpose? That’s the wrong question to ask. We should be looking to endow everything we do with purpose, to allow for the multiple sources of meaning that will naturally develop in our lives, and to be comfortable with those changing over time. Unpacking what we mean by “purpose” can allow us to better understand its presence and role in our lives.

New CEOs need fortitude, curiosity and savvy to succeed

Written by: Karen Talley

Source: https://goo.gl/a2vNaC

Quite a few CEOs are just stepping in to their positions, or in their first year or so, and while degrees and business experience are valuable, they don’t give the full picture of what’s needed—and not—to run a company.

Dealing with personnel and organizational issues, as well as stakeholders, customers and products are just a few of the hurdles many will face. It’s a time of trial by fire that demands a deft touch, inquisitiveness, patience and fortitude. 

Fortunately, many experienced CEOs are willing to give advice.

“The first, and best piece of advice I can pass on to a new CEO is the one most people already know but can easily lose sight of in the onslaught of day-to-day tasks: It’s all about your people,” said Todd Piett, CEO of Rave Mobile Safety. “The only way you can scale yourself and your organization is by encouraging an atmosphere of respect and trust, where across all levels of the organization people are empowered to make decisions, be comfortable making mistakes and willing to challenge the status quo.”

Consistency counts

Also, be consistent. “A great mentor told me not to try and be someone you aren’t,” Piett said. “While we all have areas to improve upon, don’t put on an artificial mantel just because you took on a new title. It’s not sustainable and others will see the inconsistencies in your behavior, frustrating themselves as they try to guess your intent.”

To be successful, a new CEOs should focus on identifying and building collaboration within their organizations and across other industries that impact their customer base, said Tracy Duberman, CEO of The Leadership Development Group. This will require the following, she said:

• Envisioning the future. New CEOs must have a clear vision of the direction their organization is heading and what it hopes to achieve.
• Aligning stakeholders. As organizations bring stakeholders from other sectors into the conversation, new CEOs must allow these stakeholders to build on their original vision and incorporate their inputs and interests to develop a shared solution.
• Managing boundaries and obstacles. Along the way toward developing collaborative solutions, the partnership will likely be faced with some bumps along the road. To overcome these obstacles, it’s important that new CEOs focus on opportunity, and remind themselves why the partnership was developed in the first place.
• Act and learn. It is critical to be open to giving and receiving feedback in the interest of evolving that vision to the benefit of all parties. 

As a new CEO, “if you want to become a better leader, the one skill to improve above all others is communication,” said Art Coombs, CEO of KomBea Corp. “The ability to enthusiastically convey an idea, direction and vision to others is critical. And this critical skill is the one skill that truly separates ho-hum management from motivating leadership.”

It is imperative that a new CEO hold strengths in both strategy formulation and execution said Howard Seidel, senior partner at Essex Partners.

A cohesive unit

Development of the executive team into a cohesive unit is essential and CEOs' need to have or develop strong political instincts, Seidel said. “They need to effectively manage their relationships among board members and understand the sometimes unspoken commitments that exist inside an organizational culture. New CEO’s needs to understand how much board and team support they have for certain initiatives.”

In terms of personal traits, “new CEOs are best served combining confidence with some humility and curiosity,” Seidel said. “Projecting confidence is important but that is not mutually exclusive from a new CEO acknowledging that he or she doesn’t know everything, and benefiting from the point of view of older employees in the organization.”

But, “seeking input doesn’t absolve CEOs from understanding that they are ultimately responsible for final decisions,” Seidel said. “New CEOs often can relate to the adage that ‘it’s lonely at the top.’ Similarly, because not all executive decisions will be applauded by everyone in an organization, new CEOs need to have a thick skin, or have the capacity to develop it quickly.”

The unexpected

“You can prepare best by expecting the unexpected,” said Tom Axbey, CEO of CloudHealth. “What you think you know doesn't matter; the question is: have you done your due diligence, and do you have a 100-day plan? The brochure is always different from the resort. Be prepared to listen. To do that, you have to invest from day one in the people.”

Kelley Knutson, president of Netspend, advises new CEOs to use their initial period of time as an outsider to observe, listen and learn how an organization operates and ask a lot of questions beginning with “why” or “what.”

This relates to “sales practices, customer engagement, product development/delivery, operational processes and the competitive landscape,” Knutson said. “Use the things you have two of (eyes and ears) often, and only use your mouth after you’ve objectively understood the situation at hand and can add real value.” 

At the same time, “Ask the right questions, at the right time, to extract real insight and show people you’re listening and care about what they’ve said and what they know about their business,” Knutson said. “This is critically important when leading a group of seasoned, and experienced, leaders who will know the details of the business better than you.”

Openness matters

To do the best job, “be open, engaging, passionate, supportive, humble, inquisitive, and make the journey rewarding for everyone,” Knutson said. “That’s what true leadership is about.”

When Kathleen Savio, CEO of Zurich North America, took the CEO spot, “the first thing I did was focus on my strengths—the contributions I can make to the job. Authentic leadership is where it all begins. For me, I’m inspired by the power of words and use them as a tool to inspire others. My favorite quote is an African proverb: If you want to go fast, go alone. If you want to go far, go together.

“That’s the real purpose of a CEO-–to bring everyone together, united in action, with a common purpose. So, I gathered our leaders together to listen to their insights and to emphasize we are o CEOs can get so occupied with running the business that they don’t spend time directly with their customers. I’m making time with our customers a priority for me. In my first 100 days, I’m on the road meeting with customers and listen to their needs. In the end, it’s all about being there for our customers.”

Stay healthy

“As a new CEO, you will quickly notice that operating in a high-stress environment can take its toll physically, mentally and emotionally,” said Lowinn Kibbey, ‎global head, Johnson & Johnson Human Performance Institute. “This can carry over from the office to all areas of life. While you may be fully equipped to take on a new leadership role, you may not realize just how important it is to stay healthy and resilient, and to continue to develop and improve your character.”

“As you establish yourself in your new role, don’t lose sight of your purpose,” Kibbey said. “Continue to ask yourself: What are you chasing? Why are you chasing it? Who are you becoming as you’re chasing it? Ensuring your decisions align with your character and values can significantly impact your work and quality of life.”

Why Immigrants Make Great Entrepreneurs

They’ve often overcome a lot of hardships. A business setback is nothing.

Immigrants being interviewed at New York’s Ellis Island, circa 1940. PHOTO: GENERAL PHOTOGRAPHIC AGENCY/GETTY IMAGEs

Source: https://goo.gl/ExpqLJ

By Adrian FurnhamNov. 26, 2017 10:11 p.m. ET

Outsiders face a tough struggle fitting into a new culture. They must figure out how to deal with, and overcome, frustration, loneliness and a steep learning curve.

And that’s why immigrants make such great entrepreneurs—they’re once again outsiders facing many of the same kinds of obstacles. Been there, done that.

I’ve been studying immigrants for over a decade, trying to figure out what makes so many of them go into business for themselves in the West—at higher rates than natives do—and succeed, too. The Kauffman Foundation’s annual Index of Startup Activity shows that immigrants were almost twice as likely as native-born to start new businesses in the U.S. in 2016. Almost 30% of all new entrepreneurs were immigrants, Kauffman says. A report from the Partnership for a New American Economy found that in 2016, 40.2% of Fortune 500 firms had “at least one founder who either immigrated to the United States or was the child of immigrants.”

I’m not surprised. What I’ve found is that immigrants not only have the qualities that help any entrepreneurs succeed—including aggressiveness and creative thinking—but they get a big boost because many of the skills they picked up coping with a new world are transferable to the entrepreneurial world.

My research is based largely on many conversations with entrepreneurs. In addition, I teach at a university that attracts vast numbers of overseas students. And finally, I bring my own perspective to the research: I am a migrant who grew up in Africa.

One caveat: These are broad stereotypes. Obviously, not all immigrants are entrepreneurial role models. And clearly, plenty of natives are. But there are reasons why so many immigrants forge an entrepreneurial path. It is worth identifying the likely factors—both to help understand the immigrant experience and what they can bring to their new economies, as well as to better identify what makes anybody thrive as an entrepreneur.

Lands of opportunity: The vast majority of migrants (as opposed to refugees) move to improve the economic and educational status of themselves and their families. When they arrive, they are aggressive about taking advantage of the stable economic system and respect for law and order, things they often can’t count on back home. Natives are more likely to take those for granted and not push to make the most of opportunities.

I met three immigrant entrepreneurs recently who had become friends through business. They all said the same thing: They were amazed by the quality of free education, by the benefits of the infrastructure and most of all the lack of awareness by the natives of how lucky they were. As one said, “As long as you are prepared to work hard and take some risks, it is easy to succeed in this country.”

Rolling with punches: All entrepreneurs experience failure and rejection, but outsiders are often better prepared to not be devastated by hard times, because they have already faced harder times than most people can imagine. They’ve left behind friends, family and support networks. Then they enter an unfamiliar nation full of complex bureaucracy, discrimination and other hurdles. Having already faced hardship, immigrants look at business setbacks as less traumatic, leaving them less likely to buckle and break in the face of adversity.

I have met a few entrepreneurs, for instance, who were thrown out of Uganda by Idi Amin. They arrived in cold, indifferent Britain with what they could carry—and used the strength they gained from that disruption to persist in hard times. Coping with difficulties made me, says one of those immigrants, now in charge of a successful business.

They had no capital, and no experience of British law and customs. One, who ran a number of bakeries in Africa, said he had to get a menial job in a local bakery to learn British tastes and preferences. The locals didn’t like bread and cakes as sweet as he expected, and freshness was all important. But he was fine with the setback. He adapted his recipes, started a small bakery and now owns a large chain.

Watching social cues. Because outsiders fear making a faux pas in a new world, they become adept at picking up cues that signal mistrust and misunderstanding. Similarly, they become good at reading people, and noticing the relationships between groups they do business with. That potentially makes them more shrewd and more perceptive in situations such as negotiations or sales pitches.

One entrepreneur told me that he was astonished that everything in markets and shops was openly priced. He came from a culture where everything was negotiated—in his words, the difference between the mall and the bazaar, where people must learn to haggle, charm and persuade. People in his home country needed to observe customers closely to figure out how rich they were, whether they were serious, and whether they knew how to play the game. He believed that skill had served him well when negotiating deals in his adopted country.

A different network: In some sense, immigrants don’t have the array of local networks that natives do. But they often can substitute that broad network with a much deeper network: co-nationals. These earlier migrants are in many ways more supportive of their entrepreneurial successors than the networks that are available to native entrepreneurs. The earlier migrants offer financial support—including loans and discounts on products and services—as well as insights about local practices and people. Networking with this support group gives new immigrants a relatively safe environment to build interpersonal skills as well as learn crucial skills they need.

It also offers them a way to simply survive difficult times, giving them breathing room to become entrepreneurs. Often a whole family shares a large, run down, cold and damp house with three other large families in the same position. They share everything and learn from one another.

Seeing with fresh eyes: Because immigrants learn about their new home culture, and its rules of language and etiquette, from the outside, they often have perspectives that natives don’t have. They see possibilities and opportunities that natives don’t see, and find new ways to be creative. They bring new flavors, musical sounds, cultural tastes to their new land. They also bring new ideas about selling, managing, customer service, technology and more. Confronting a problem with a fresh perspective is a huge advantage. Immigrants come by that naturally.

Dr. Furnham is a professor of psychology at University College London. Email reports@wsj.com.

Appeared in the November 27, 2017, print edition as 'Why Immigrants Make Such Good Entrepreneurs.'