Yasheng Huang: Goldman Sachs’ 10,000 Women Initiative will help train the next generation of Chinese entrepreneurs

MIT Sloan Prof. Yasheng Huang

I am just back from an exciting weeklong trip to China to meet applicants for a new program MIT Sloan is helping develop at Yunnan University for women entrepreneurs. The program is part of Goldman Sachs’s 10,000 Women Initiative. Goldman’s initiative is a $100 million campaign designed to provide business and management education to promising female entrepreneurs in developing countries.

I met 15 candidates and found them each to be impressive – educated, articulate, and brimming with ideas. They have already experienced some success: some of them had at least 1 million yuan in revenue, which is about $150,000.

During my meetings, I asked the women about problems they’re facing, and the issues that keep them up at night. I wanted to get a sense from them of what they wanted to get out of the program. Our objective is to help these women solve problems by providing a platform that involves a practical curriculum, consulting clinics, and opportunities for networking.

A lot of the problems they shared aren’t necessarily unique to women small business owners, but perhaps women entrepreneurs feel them more acutely than men do. For example, many of the women expressed difficulty in retaining key employees. One of the likely reasons for this is women entrepreneurs tend to operate in the services sector, as opposed to, say, machinery or manufacturing where men tend to dominate. There is a greater human dimension in a services company, which means these women are more reliant on specific employees. If they lose one, it is a more devastating loss because they’re losing that worker’s customer knowledge and trust.

Another challenge women entrepreneurs face is expanding their businesses into new regions. Women entrepreneurs may have particular difficulty with this because in order to expand into new locations, they need to establish relationships with government bureaucrats and landlords. Unfortunately there is a bit of an old boys’ network that is hard for outsiders to penetrate. Now the program we’re helping Yunnan develop can’t demolish the clubby mentality in one go, but we can introduce participants to seasoned, powerful business executives in the region who can share their experiences, wisdom, and connections.

A final concern voiced by several of the candidates had to do with the creation of a company culture. In my mind, this reflects the current stage of the Chinese economy. It used to be that the best way to motivate employees was: money, money, and more money. But today’s new breed of entrepreneurs recognize they need more than that to encourage and inspire employees. You need to pay them, sure, but you also need to inspire them. A lot of male entrepreneurs in China–especially in the manufacturing sector–have very strong personalities. They’re almost like dictators. They are ruthless, brute force managers. Women entrepreneurs tend not to be like that–thank goodness. And yet, because there’s no other model of effective management, they are unsure of how to adopt a collaborative style. Hopefully, our curriculum will help them do that by showing them alternative leadership techniques.

One applicant I met while in China really stood out. She runs a household cleaning service in the countryside. Now that’s about as low-tech a business as you can get. However, she has also developed software to manage her scheduling and her customer service division, and now she is selling that software to other companies. So she’s not just running an old-fashioned cleaning business with modest ambitions, she’s running a software company that has big potential. She epitomizes the dangers of drawing a sharp distinction between high- and low-tech businesses.

Our goal with the program is to expose participants to high-tech management methods and techniques that will advance their business models. Equally important, in my opinion, is that we will be gathering these women entrepreneurs together so that they can learn from, and inspire, each other. That will greatly enhance the potential of this program.

Yasheng Huang holds the International Program Professorship in Chinese Economy and Business at MIT’s Sloan School of Management. He also holds a special-term professorship at School of Management, Fudan University and an honorary professorship at Hunan University

Read more about the program in the Financial Times

Also see the International Center for Research on Women Report

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