Nan Langowitz says the latest study on women-led businesses in the Commonwealth shows that nearly half the 100 companies at the top of the revenue chart grew by more than 5% over the course of the past year, far exceeding the national expansion rate.
But it wasn’t just the numbers that stood out in the report, said Langowitz, director of the Center for Women’s Leadership at Babson College, one of the organizers of the study; it was also how they were attained.
Indeed, the study, conducted in conjunction with the Commonwealth Institute, a non-profit group founded in 1997 to help women entrepreneurs, CEOs, and corporate executives build successful businesses, revealed that many of the Top-100 companies have flat organizational structures with open and collaborative management styles that play a key role in their strong growth patterns.
What’s more, most of the businesses focus on creating favorable work environments that foster loyalty and productivity. Despite a still-sluggish economy, these companies offer employee incentives such as profit sharing, professional development, and flexible work schedules.
"What this study shows is that these strategies work," said Langowitz, noting quickly that while women-led businesses do not have a monopoly on such operating philosophies, they utilize them in greater numbers. "By taking steps to create a positive work environment, these businesses achieve a higher degree of loyalty and, in many cases, higher productivity, which leads to their success."
That has certainly been the case at Randall’s Farm Inc. in Ludlow, where Karen Randall, the second-generation owner of the family-run business, has expanded the former fruit and vegetable stand into a multi-faceted operation with $6 million in annual revenues, good enough to tie for the 73rd slot in the Top-100.
Randall told BusinessWest that diversity and flexibility have been the keys to the company’s success, but she also underscored the importance of a work environment that helps people balance their jobs and their many other responsibilities.
"I have a lot of high school and college students working here, and I tell them that school and their family are the most important things, and that work comes next," said Randall. "We have flexible schedules and work with people; we’re very accommodating, and that pays off — we don’t have much turnover."
Martha Borawski, president of Pioneer Valley Travel in Northampton, another Western Mass. company on the Top-100 list (No. 90), said similar strategies have helped her company weather a number of changes in the travel industry that have driven many companies out of business.
"We’re had to reinvent ourselves a few times," she said, "and I’d like to think we’ve created an environment where new ideas and creative thinking can flourish."
BusinessWest looks this month at the latest Babson-Commonwealth Institute study — this is the third in what will be an ongoing initiative — and also at what’s behind the numbers and how area businesses are reflective of the trends that are emerging.
Taking the Lead
Langowitz told BusinessWest that Babson initiated the study on women-led businesses in 2000 because Ö well, they had never really been studied before. And as their numbers have grown over the past few decades, it became clear that they should be studied.
"So many studies have focused on businesses that are male-dominated," she explained, adding that she and others involved in the study feel it is important to benchmark what women business leaders are doing. "We wanted to get another perspective and focus on this specific, growing segment of the economy."
As the name implies, the 2003 Women-Led Businesses in Massachusetts study focuses on businesses with women at the helm — both owners and CEOs/presidents. The 237 companies that responded were ranked according to total revenues, not by employment, said Langowitz, noting that she considers this a more scientific statistic concerning overall size, although there is no perfect barometer.
Topping the list were Cumberland Farms Inc. in Canton; Massachusetts Electric Company in Northborough; Western Massachusetts Electric Co. in West Springfield; Domain, a retail home furnishings business, in Norwood; and Granite City Electric Supply Co. in Quincy.
Western Mass. was well represented on the list, with 10 companies. In addition to WMECO, led by CEO Cheryl Grise, other area companies on the list are: Realty World Sawicki (No. 12), an Amherst-based realty company led by Ernestine Sawicki; Bassett Boat Company Inc. (23) in West Springfield, led by President Diane Bassett Zable; Bay State Moving Systems in Chicopee (38), led by President Elizabeth Schofield; The Center for Extended Care in Amherst (61), led by President Bette Skole Kravetz; United Personnel Services Inc. in Springfield (65), led by President Mary Ellen Scott; Randall’s Farm; NEPM in Wilbraham (75), a company specializing in custom imprinted promotional products and business gifts, led by President Kathryn Selvia; Pioneer Valley Travel; and Chicopee-based MicroTek Inc. (90), an electronics manufacturing company led by Anne Paradis.
Langowitz told BusinessWest that the Women’s Institute at Babson, created five years ago to focus on the advancement of women at all stages of professional development, and the Commonwealth Institute decided to conduct regular studies of women-led businesses to watch trends develop over time, rather than gain what she called a "snapshot."
Lois Silverman, founder of the Commonwealth Institute and one of the first women in Massachusetts to take a company public when she was CEO of CRA Managed Care, concurred. She said the 2003 study shows that women-led businesses are becoming an increasingly more powerful economic engine in the Commonwealth.
"Women have demonstrated their success in building companies for long-term growth," she said. "These firms, in business for an average of 19 years, have continued to achieve solid gains despite the ups and downs of numerous business cycles."
The latest findings from the study, which charted revenues from 2003, revealed several trends about women-led businesses. Among them:
• They have more women in top management positions than other businesses. While the percentage of women in senior positions declines in larger firms, it is still higher than in the general business population;
• The companies on the list continue to achieve success. Of the Top-100 companies listed in the 2002 report, 72 of them are on the 2003 list. Meanwhile, total revenues for the No. 100 company in 2002 were $3 million; for 2003, the number was $4.8 million.
• Nearly 80% of the women-led businesses are run by their founding entrepreneurs. The average tenure of these CEOs is 13 years, which is longer than that of businesses run by men;
• Ninety-two percent of businesses surveyed anticipate growth over the next two years, with 62% expecting growth to be greater than 5%. Their strategies to drive growth include new clients or customer accounts, new products, and strategic alliances. The largest companies also rely on acquisitions for expansion;
• While the women-led businesses in the study span a number of industries, the top four were professional services, high-tech, construction, and manufacturing.
Beyond the numbers are the operating strategies that have enabled women-led businesses to achieve solid growth, said Langowitz, referring to flat management structures, rather than a typical hierarchy, and employee-friendly policies.
"I believe there is certainly a connection between their success and the organizational styles and management philosophies being used," she said. "And there are lessons there for all companies."
Borawski, who took the helm at the family run business in 1980, said she has worked to create an atmosphere where employees can be entrepreneurial and where ideas are allowed to take root. Such a climate is needed in an industry where there is constant change — the Internet now allows individuals to do much of the work traditionally handled by travel agents — and companies have to find new business niches if they want to survive.
At Pioneer Valley Travel, for instance, the company has diversified and become more specialized. For example, it specializes in family reunions, world-wide golf vacations, and destination weddings. In addition, Borawski specializes in travel to Australia, and other staff members have become experts on other spots on the globe.
"We’re constantly recreating ourselves — we’re not airline ticket issuers," she said, noting that many companies that haven’t been able to adapt to the changing landscape have gone out of business. "We’ve made a commitment to being the customer’s advocate; that’s what companies like this one have to be in this age."
Borawski credits her staff members with helping Pioneer Travel make its needed transformation, and she works hard to keep them. She implemented a profit-sharing trust in 1985, and has initiated other programs, such as flex time, to help employees manage work and life. She also encourages staffers to travel, and offers additional paid time to those heading for new destinations.
"For a small company, we offer a lot in terms of flexibility and keeping people employed here," she said. "Good help really is hard to find, and we try to hang on to it."
But turnover is a fact of life at a business with many part-time employees and students, noted Randall, who said it is still important to maintain a sense of continuity and to foster a positive work environment.
She has done so with flexible schedules, a number of benefit programs, and a door to her office that is always open — figuratively if not literally.
"And people take advantage of that open door," she said. "I try to make myself accessible to people and I try to work with them; overall, I’m a good listener.
"People don’t make it a career to be in this size retail operation," she continued. "So it has to be satisfying in other ways."
Randall grew up working at the business, started by her father, which began by producing and selling eggs and produce grown at the family’s 80 acres of farmland. She majored in elementary education at UMass, but graduated in 1976 to a glut of teachers in the region. So she rejoined the company, whch eventually expanded with a greenhouse operation and a creamery, and never left.
She took the reins of the business in 1987 after her father passed away, and in 1997 undertook a major expansion that included a retail center, bakery, deli, and other components. "I was 40 at that time, and knew that I either had to get out or take things to the next level," she said, noting that while there were growing pains the first few years — "people liked what we did, but the books said otherwise" — the venture has enjoyed steady growth since.
The company now employees more than 100 people, including Randall’s two sisters, Anna and Tammy. They are part of a flat organizational structure in which most people wear a number of hats and contribute to continued efforts to diversify the company.
"We know that we can’t stand still — a business has to keep growing or it will die," she said, adding that recent additions include entertainment offerings such as hay rides and pumpkin picking. "We’re selling to the next generation of consumers, and that generation likes to be entertained."
The Bottom Line
Adjusting to the changing needs of consumers is just one of the keys to surviving in business today, said Langowitz, who told BusinessWest that the studies on women-led businesses have revealed a pattern of flexibility.
"That’s one of the many trends we’re seeing," she said, noting that the regular studies will continue, with the hope of garnering more quantitative and qualitative analysis of this growing segment of the economy. "There is a lot that the business community can learn for the organizational, financing, and growth strategies of these companies."
George O’Brien can be reached at[email protected]
