Title: What If Women Ran Wall Street?
Study: What If Women Ran Wall Street? (Sheelah Kolhatkar, New York Magazine 2010)
Finding: A certain amount of risk-taking is biologically driven by testosterone, and women can use this to their advantage in producing less emotionally-driven results.
InPower Insight: Despite the common story that women can’t control their emotions, studies that look at women and risk and biology show that men sometimes have more trouble with it than women do.
Summary:
Despite what we’ve been led to believe, the market isn’t rational or efficient at all—it’s all about feelings. According to new research, “Wall Street’ volatility is…driven by our body chemistry.” Research shows that because men have more testosterone, their actions are more impulsive and that more female presence on Wall street could “prevent extreme behavior” and “irrational exuberance”. Men produce fifteen times the amount of testosterone as women and in highly competitive environments testosterone levels tend to rise.
Researchers at the Harvard Kennedy School say that there is something “biological [that] explains risk-taking” and its found that testosterone is the most imminent. In a study conducted at Harvard, economist Terry Burnham, higher-testosterone male rejected money offers if “someone else was getting a larger share.” Burnham also purports that having too many men contributing to major business decision might cause them to take more risks.
Women are found to view an offer more holistically and predict all possible outcomes before making a final decision. Women are more likely to put aside their egos and admit that they are mistaken. Researchers in the field of neuroscience suggest that the disaster on Wall Street could have been predicted because the highly competitive environment was dominated by men, more detrimental risks were taken. Among 1, 200 traders at one of the largest propriety firms in the country, 5 out of the twenty women present were very successful. Thus, the success rate for women was 25 percent in contrast to 2 percent for men.
Personal Coaching Tip: Don’t believe the stories you hear about women being unable to control their emotions or take risks. Women have less testosterone, which actually makes them less impulsive when it comes to risk taking. In the case of Wall Street traders, successful women were able to turn this to their advantage. So can you.
Keywords: Competition, Risk, Testosterone
Guide to Women in Leadership
Organizations with women in their executive suites regularly out-perform others. Yet rising female executives (and their mentors) are frustrated at how hard it is to break through the glass ceiling. In this extensive guide, Executive Coach Dana Theus shares her tried and true strategies to help women excel into higher levels of leadership and achieve their executive potential.
