Women, Money, & Risk

Some time ago, a friend of mine who worked in a large, midwestern university told me about some scary results she found while doing research for her job: While reviewing salary-related correspondence between her department’s HR wing and job applicants, she noticed that male applicants routinely asked for significantly more money than their female counterparts did.

Same goes for benefits. Men would require the university to pay for moving costs or hire their spouses as part of the contract, for example, whereas women would not. This pattern was consistent, regardless of the job in question.

A Woman In Society

Maybe I shouldn’t admit it, but until my friend told me what she’d found, I’d never given much thought to my role as “woman in society,” mostly because I’d never felt discriminated against on the basis of my gender. Even though I was raised by southern women who did face gender (as well as economic) discrimination, I’d always believed that my abilities were limited only by my interests and work ethic—but never my sex.

Imagine my surprise when I learned that capable, ambitious 40-something women were asking for 3/4 or maybe even 1/2 as much as their male counterparts. For the first time, I felt indignant and conflicted about being a woman.

Clearly, “society” was partially to blame for creating a world in which women felt so unsure of themselves professionally. And yet, didn’t women bear some responsibility, too? Shouldn’t we demand better? Couldn’t we just ask for more money?

Getting What You Want

Since then, I’ve made concerted efforts to ask for what I want. When I felt that my tuition payments were too high, for example, I simply asked the Assistant Dean to reduce it, citing good grades and consistent community involvement. She made a call and did so—by at least 50%.

I’ve also learned to ask for what I think I’m worth. I try to think of these interactions as logical negotiations, not emotional or ethical quandaries. My negotiating partner can always say no, after all.

This strategy has served me well, but it’s not always easy. I find myself second-guessing my experience and stumbling over what I’m worth more often than I’d like. I have to consciously work at it.

It makes me sad that confidence, assertiveness, and even cockiness—traits that correspond to getting what we want—are almost always associated with men, not women. It seems that women are far less likely to risk failure or rejection to make something happen, or to confidently put their real opinions out in public and deal with the consequences.

Of course, this is not all our fault—we simply aren’t conditioned like men are. Instead, like the worn stereotype suggests, we’re trained to be diligent, pretty, peace-making caretakers. All wonderful qualities, when balanced with the reality that we could be different if we felt like it. But unfortunately, this is not always our reality.

Avoiding Risk, Seeking Approval

At the heart of our conditioning are two key forces: Risk aversion and approval-seeking behaviors.

It’s obvious that risk-aversion in women has biological roots—we don’t want our foolish behavior to accidentally kill our babies. But I’m not talking about smoking, drugging, hurt-your-baby, lose-your-family risks. I’m talking about calculated risks that have a decent chance of yielding high returns, and some chance of failure. Compared to our male counterparts, we tend to avoid these types of risks.

In fact, some women even avoid taking risks that have a very small chance of failure and high chance of success—if taking said risk might get us branded “irresponsible” or “foolish” or if doing so means sticking our neck out.

The problem? We don’t want to take risks that might expose less savory aspects of our personalities, because we’re conditioned to believe that friction and disapproval are bad. So we don’t put ourselves out there for evaluation. We don’t bite off a little more than we can chew, knowing we’ll figure it out as we go. We censor.

The worst part is that it isn’t just men who do the censoring—women censor each other, too. We censor by judging ourselves and our peers primarily according to how responsible and diligent we are (again: amazing qualities when balanced). We censor by waving the invisible “don’t be unreasonable” rag when one of us gets out of line. We censor by prioritizing other peoples’ needs over our own, or letting fear and guilt drive our decisions.

The tragic result is that many women can’t even imagine what getting what we want would look like—much less take the risks we need to actually get it.

Being More Cocky

In the interest of making this a solvable problem, I’ll do some “shoulding” on women:

We should start by asking for what we want—whether it’s more money, more time off, a better pencil sharpener, a new business, or whatever. Then, we should learn to calculate the real risks involved in pursuing what we want. This means assessing the situation and deciding if the positive outcome (whatever success means to us personally) is worth the temporary risk (Someone being annoyed at us? Getting fired? Seeming selfish?) it takes to achieve said outcome. Then, we should acknowledge when the feared or imagined risk is lower than the actual risk. Finally, and more often than not, we should take the intelligent, calculated risk.

In other words: we should access our inner 6th grade basketball (or put in your substitute activity here) player, and act a little more cocky.

I am indebted to Clay Shirky and Cheryl Heller for their recent articles on this same topic.

Maybe We SHOULD Go To B-school

A while back, I wrote about the up and downsides of going business school. I concluded that for some people, but especially entrepreneurs in the creative professions, business school might prove more limiting than helpful.

Well, I may have been wrong about that. It looks like business schools far and wide are starting to improve upon the old, rigid finance and accounting-based model that puts young students on the fast track to a solid mid-level management job at Target’s headquarters or an 80-hour workweek at Deloitte and Touche.

Instead, according to this recent New York Times article, some schools (such as the Rotman School of Management at the University of Toronto) are taking a hint from Stanford’s d.school and beginning to re-orient their curricula around “design thinking” and the idea that “students need to learn how to think critically and creatively every bit as much as they need to learn finance or accounting.”

In other words, business schools are starting to flirt with the humanities and steal from the design world.

Nothing makes me want to throw down $70,000 more than the prospect of marketing, art, and comp lit getting in bed together. And looking at my own odd career trajectory, I can say an open relationship between the three might actually work out—I majored in psychology and religious studies in undergrad and got a Master’s degree in philosophy and ethics, but I managed restaurants and mentored business school students through school. I’m pretty sure this DIY interdisciplinary approach has made me more, not less, capable of running a business.

Though it may ruffle feathers at first, it’s great to see business schools add classes like “The Fundamentals of Integrative Thinking, about understanding and analyzing how people use [finance and accounting] models in every day lives” and “The Opposable Mind, about developing and practicing the personal skills you need to be a good integrative thinker and manager” to the standard menu.

If business school’s new goal is to produce better innovators, thinkers, and problem solvers, I can see no better way than this (beyond kicking students out of class and into the job market early or offering internships at IDEO, maybe).

Still, I maintain my earlier reservations: It’s probably not a good idea to spend gobs of cash on business school unless you have a specific reason for doing so. Even if you do get to read poetry in strategy class.

Cheap, Simple Fixes

Of all the chapters in Steven Levitt and Stephen Dubner’s follow up to Freakonomics, SuperFreakonomics, my favorite is the one on cheap, simple fixes. In it, Levitt and Dubner talk about how “big, seemingly intractable problems are often solved in surprisingly cheap and simple ways.”

In 1847, one out of every six mothers giving birth in doctors wards died of peurperal fever (the current death rate is 9 out of every 100,000). The problem was, nobody new why. Experts usually blamed the mothers, either for misconduct in early pregnancy or bad eating habits.

Then came doctor Ignatz Semmelweis, who was the first to acknowledge that doctors had no idea what lead to puerperal fever and suggest that mothers weren’t to blame.

After years of research, Semmelweis concluded that it was the doctors themselves who were unwittingly causing the deaths—by bringing in bacteria from cadavers they had been dissecting just before the births.

The solution? Doctors needed to wash their hands.

Germ theory had not been invented yet, so nearly everyone rejected Semmelweis’ ideas—it wasn’t until after his death that the medical community came to respect him. Today, of course, his theories are widely accepted. (Although not, apparently, always followed. The book also talks about how it’s nearly impossible to get doctors to thoroughly wash their hands, even though they know they should.)

The quirky, Occam’s Razor-ish appeal of SuperFreakonomics is typical of Levitt, and useful—you find yourself automatically applying his insights in behavioral economics to day-to-day life stuff.

Check out the book. Aside from an occasional nosedive in tone (I’m still on the fence about “pimpact”—see Chapter 1), it’s real good.

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