Dr. Dana Kanze is an accomplished professor of organizational behavior in the workplace at the London Business School. Her research applies behavioral insights to understand sources of labour market inequality, spanning the areas of judgement and decision making, ethics, motivation science and entrepreneurship. Her internationally accredited TED Talk entitled, “The real reason female entrepreneurs get less funding,” has spurred many important discussions surrounding the biases that investors carry within their evaluation of start-up ventures.
As an ad hoc reviewer and keynote speaker, Dr. Kanze started her career as an investment banker and strategic consultant for Citigroup and Winterberry Group. Eventually, she went on to co-found and run a venture-funded start-up before receiving her pHD in Philosophy at the Columbia Business School.
“It was liberating to realize that I could deep dive into one particular area that kept me up at night.”
In Dr. Kanze’s case, this was organizational behavior and gender disparity within the workplace because of her former personal and professional experiences.
The Influence of Culture
Dr. Kanze teaches a class called Leading Teams and Organizations at the London Business School where she emphasizes the influence of culture on startup organizations. Many practices in companies come from the inherent values of a culture. Dr. Kanze encourages her students and entrepreneurs to be intentional about the values that they carry into their company. By being intentional, there is a higher chance that there will be more equity in the workplace. Dr. Kanze references the role of language in the mission statement of an organization and how this wording influences employee equality in the workplace.
The way a company motivates people to complete tasks can influence the ethical culture of an organization such as workplace discrimination. She found that if a company motivates its employees in a way that prioritizes urgent action rather than motivating employees through thoughtful consideration. If a company motivates its employees through urgent action as opposed to thoughtful consideration, the employees of the organization are less likely to consider ethical standards. However, motivating employees through thoughtful consideration promotes a more ethical environment and less workplace discrimination.
“Mission statements are just one cultural artifact. There are so many other ones that reflect the underlying values, norms, and processes that collectively influencing the culture”
Promotion versus Prevention
Dr. Kanze spoke to us about her motivation behind her study on promotion versus prevention. Dr. Kanze relayed that she felt that there was a gap in venture funding between male and female entrepreneurs that persists to this day. Dr. Kanze aimed to see if biases existed within the source of capital — the investors. Dr. Kanze and her team looked at the linguistics in the interactions between investors and entrepreneurs to develop a theory called regulatory focus theory. This theory distinguishes between orthogonal orientations of goals, chronic dispositions, and situationally induced focusing in one over the other.
In Dr. Kanze’s field studies, she discovered two sets of “goals” — promotional and preventional. Promotional goals are viewed as ideals, strategic approaches towards discussing gains and are focused on hopes and advancement. Prevention goals are viewed as strategic approaches towards avoiding losses and are focused on safety, responsibility, and security. It was discovered that women field prevention focused questions in venture pitching and men field promotion focused questions which contributes to the disparities in the field of funding. Dr. Kanze received a mostly positive response to her study regarding disparities in the field of funding. However, there is still a lot of work that needs to be done regarding a behavioral response to her research. Dr. Kanze’s research confirmed that women are not doing anything “wrong” to incite disparities in the field of funding.
Dr. Kanze also found that investors penalize female founders more than they do male founders for a lack of fit. Dr. Kanze’s audience members predicted that female founders were often receiving less funding than male founders because many female led organizations cater to female needs. However, Dr. Kanze found this to be false. She discovered that female founded organizations actually receive less funding overall when their organization caters to male dominated fields as opposed to female dominated fields.
“Evaluators are likely to fill in the blanks with their assumptions.”
Dr. Kanze emphasizes that especially as a female it is very important to be upfront with your experiences in the industry in order for evaluators and investors not to make rash assumptions about your abilities.
Dr. Kanze encourages us as a society to take a proactive approach in helping those who are underrepresented make more of an impact in the world of entrepreneurship.
“Creating awareness and calls to action is now more important than ever.”
Dr. Kanze believes that success in gender parity is achieved when there is parity on both the investor and entrepreneur side. Success is achieved when female venturers who are actively seeking capitol receive 50 percent of allocated funding, and when 50 percent of the investors are women as opposed to 20 percent.
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Written By Anna Kroner
