Defeating bias with data: An eye-opening chat with Julia Boorstin

Forty-two percent of small business owners are women. Yet, when small businesses grow and choose to go public, the lion’s share of venture capital goes to male-owned companies. Of the 2,000 IPOs every year, only 18 percent are led by women and only 3 percent of venture capital goes to women.

That’s a big disparity, but it is representative of the unbalanced gender dynamics at work in corporate America. I sat down with Julia Boorstin, CNBC’s Senior Media & Tech Correspondent and author of When Women Lead: What They Achieve, Why They Succeed, and How We Can Learn From Them to discuss the wider implications of bias in business and how data may be the key to defeating it.

Bias: Often not malicious, simply unconscious

Having spent years in corporate America, Boorstin brings a wealth of experience to her recent book about the role of women in business. After relating some experiences from her own professional life, she shared that it is often unconscious bias that rules the day in business. It is pattern matching—our instinctual desire to fit new people we meet into familiar patterns—that often contributes to unbalanced gender dynamics.

When conducting the 120 interviews that served as the foundation for her book, she heard several accounts of bias at work. For example, some women related being asked in job interviews or investor meetings how they would be able to manage the work required while still being a good parent to their children-–a question that is rarely asked of fathers. Others related that they had an easier time fundraising while pregnant during the pandemic because they could mask their pregnancy and avoid the inevitable questions about their ability to handle a business and a baby.

The data’s In: Double standards are a waste of time

Pulling together enough research to require multiple pages of endnotes for her book, Boorstin uncovered data that provides a strong argument against the stereotypes and biases endemic in corporate life.

For example, data shows that, when a woman is named the CEO of a company in a largely male-dominated industry, company stock prices typically fall in the short term, which may reveal a lack of confidence in the new leadership. However, looking at those same companies a bit further down the road, the stock typically outperforms that of companies with new male CEOs by 20% within two years.

Boorstin also found that in seed funding Rounds A and B, men are more likely to win the trust of investors, whereas by Round C funding, that bias disappears. The reason? Males often approach funding with what Boorstin calls “bluster,” taking a forward-looking approach to where their company is likely to be in the future. Women, on the other hand, tend to talk about their company’s current status, which may appear to investors as projecting less confidence in the future than their male counterparts. In the later stages of seed funding, this issue is less important, as companies in these stages of funding have built a history of achieving milestones successfully.

Boorstin suggested a two-pronged approach for eliminating bias in the vetting process. First, when considering a startup’s leadership, look at its proximity to the problem it’s trying to solve. Does leadership truly understand the problem, and does its solution solve the problem?

Second, look at distance traveled. For example, how much progress has been made from a company’s inception to its current state? Looking at these two factors helps investors see a company’s potential sans unconscious bias.

A better way to lead

Reviewing the data regarding the significant impact women make in business and the challenges they face, Boorstin identified some key takeaways for business leaders of any gender.

1. Cultivate a growth mindset, the humility to know you need to grow and the confidence that you are capable of growth.
2. Lead a purpose-driven company, as those companies are the ones that tend to thrive in the long term. (Interestingly, the data shows that women are 20% more likely to form purpose-driven companies.)
3. Cultivate gratitude. The strongest leaders making the best decisions today are those that realize their success comes from their relationships with others and from embracing a diverse group of colleagues with rich life experiences.
4. Adopt a long-range view. Shift your focus from short-term wins to long-term potential.

Reasons for optimism on the diversity front

There is still plenty of room for improvement on the gender dynamics front in business, but Boorstin emphasized that she also found abundant reasons for optimism. From a human perspective, Boorstin was inspired by her interviewees, a group of phenomenal CEOs that are re-imagining the world and working with purpose-driven companies to make a real difference.

From the perspective of the data, Boorstin also found real reason for optimism. The data unilaterally indicated that diversity is better for business in two key ways. First, introducing diversity inherently means introducing new ideas, fresh perspectives, and a richer field of experience.

Perhaps just as importantly, the data indicated that introducing diversity into a team makes the original team members level up so that the entire team becomes smarter, more agile, and more innovative.

There is much to absorb from Boorstin’s insights.

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