A couple of months ago, I posted two curious financial facts: 1) hedge funds managed by women perform three times better than those managed by men, and 2) companies with female CEOs outperform those with male CEOs by 50 percent.

Based on those facts and my own subjective experience, I concluded that the average woman inside the business world is smarter than the average man. Last week, new research revealed why and how women are smarter.

According to separate neuroscience studies conducted at the University of Southern California and Duke University, women make less-risky decisions under high-stress situations. As explained in the New York Times:

"Under low stress situations, men and women make decisions about equally well [but] men took more risks when they were stressed. They became more focused on big wins, even when they were costly and less likely."

In other words, when everything's going smoothly, women and men are even as far as decision-making goes. However, when things get hairy, men tend to play the long shots while women tend to think things through.

And that's a huge competitive advantage in the business world and, well, pretty much everywhere else, too.

The reason women make better decisions under stress isn't that women are "nicer" or "more collaborative" or any of that crunchy-granola BS. It's because women's brains handle the stress hormone cortisol better than men's brains handle it.

According to the neurobiologist Ruud van den Bos, men under stress experience a huge spike in cortisol, which degrades their decision-making ability. Women experience a smaller spike, which creates urgency but doesn't impede decision-making.

Every pundit and analyst in the business world has repeatedly pointed out that today's business world is continually getting more stressful. The more stressful things get, the better that women (on average) will become at decision-making than men (on average).

My brothers, let me net it out for you. When the going gets tough, she gets smarter and you get dumber. And since disruptive innovation means the going is always getting tougher, if you're not hiring and promoting women, you're only proving how dumb you are.

Published on: Oct 20, 2014
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