Many entrepreneurs think that diversity on their team just makes their job harder, since startups are all about making fast decisions, and executing efficiently. Often they assume that this is only a big-company issue, having more to do with the legalities of equal opportunity, hiring minorities, and moral imperatives. In reality, diversity in a startup can be your big competitive advantage.
In a recent Deloitte Review of “Diversity as an Engine of Innovation” executives were asked about the connection between diversity and company performance, and 90 percent agreed it was critical. In a different survey of over 500 European respondents, 83% felt that diversity initiatives had a positive impact on their business. Quantification studies still show more mixed results.
While more quantification efforts are always a good thing, I believe the evidence is conclusive that there is business value for startups in using diverse teams, including different genders, age, race, and ethnic cultures. These varied personal perspectives and life experiences will allow a startup to benefit in many ways, including the following:
Diverse teams make better decisions. When homogenous teams make decisions, their similar ideological preferences and backgrounds tend to compound any weaknesses. Diversity brings new perspectives and range to the group dynamics, which will likely improve the accuracy of the outcome.
Groupthink with diversity enhances learning. By groupthink, I mean cooperation in which every member of the group holds the vision, mission and values of the group above self-interest. Teams that are homogeneous are less likely to challenge their own assumptions, less likely to listen to feedback and, therefore, less likely to learn.
A diverse team brings a broader perspective. This means your plans will be more creative, and your solutions to problems can occur faster. Your startup, for example, will more likely see and understand sooner the needs and wants of a larger and more diverse customer base.
Diversity will likely strengthen team culture. As your startup grows, you need to attract and retain a broader group of talented individuals, who share a common set of values and commitment to action. Diversity highlights the value of different perspectives on the team, and fosters innovation and creativity.
Diverse teams will have more diverse networks. You as the entrepreneur will thus have access to a broader pool of potential investors, customers, vendors, and expertise. Greater, diverse networks can solve greater, complex problems, and compete more effectively in a rapidly changing marketplace.
Tristan Walker, VP of Business Development at Foursquare and Silicon Valley diversity advocate, recently pointed out that, "By the year 2040, racial minorities will account for the majority of the United States population." If entrepreneurs really want to keep up with the needs of this evolving population, they need to capitalize on the diversity that comes with it.
Starbucks, led by Howard Schultz, is an example of a startup that has long actively supported a focus on diversity, and credit these efforts with their success in a very competitive industry. Diversity and inclusion continue to be a central part of Starbucks’s strategy to, in the words of the company’s vice president, global diversity, May E. Snowden, “embrace diversity as an essential component in the way we do business.”
To me, it’s clear that the startups that make decisions based on individual and team merit, rather than title, politics, or culture execute faster and learn faster than their competitors. In today’s highly competitive environment, that can be decisive.
So, whether you are making early strategic hires, or growing your advisory board, look for people who are smarter than you, and not just like you. It will help both you and your business to grow faster and live longer.
Disclosure: This blog entry sponsored by Visa Business and I received compensation for my time from Visa for sharing my views in this post, but the views expressed here are solely mine, not Visa's. Visit http://facebook.com/visasmallbiz to take a look at the reinvented Facebook Page: Well Sourced by Visa Business.