Startup Diversity In A Digital And Globalized World

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Startup diversity in today's world is not only a theory but rather a fact. But what benefits or obstacles does it bring to your company?

“Meet lots of different people without trying to extract value from them. You don’t need to connect the dots right away. But if you think about each person as a new dot on your canvas, over time, you’ll see the full picture.” – Tony Hsieh, a serial entrepreneur who co-founded Zappos.

We hear about diversity in any field of life from the financial portfolio to exercise regimen. Most managers acknowledge that it is beneficial to have a diverse workforce. Consulting companies write white papers one after another about equality, fair distribution of male and female workforce, nationality diversification. However, the notion of team or company diversity is hard to prove or quantify, especially when it comes to measuring how the diversity affects a company’s performance or ability to innovate. This is the question I wish you to investigate with me.

Diversity – What Is That?

First of all, I propose to narrow down the notion of diversity. The Harvard Business Review (HBR) research scrutinized diversity into two kinds: inherent and acquired. Inherent diversity consists of traits that you have from the moment of your birth: gender, ethnicity, or/and sexual orientation. However, acquired diversity is nothing else than what you gained during your life: education, working experience, volunteering, etc.

Reasons Behind Non-Diverse Teams

There are several theories suggesting that people prefer rather homogeneous than diverse groups, teams, companies. In brief, one of them is the similarity-attraction theory, which describes how much the similarity in believes, values, activities and demographics influences positively the human communication. Moreover, people with similar characteristics are attracted to each other and eager to provide positive feedback. Theories of selection, socialization and homophily tend to explain the presence of team/group homogeneity. Theories of social identity and self-categorization stands for human identification with one or another group based on similar observable characteristics. If to take all the theories together, we can make a conclusion that people seek relationships with those with whom they share the similar traits.

Startup Diversity

With regard to articles from Forbes, TechCrunch, the startup scene is dominated by males, specifically by White or Asian ones. The Guardian stated that “The lack of women in startups is a symptom of a much larger problem involving investors and the retrograde culture they protect and promote. It’s not just women who are excluded – it’s pretty much anybody who isn’t white, male, young, and privileged.”

Whatever news you read or look through, you clearly see the extreme opinions about startup diversity:

#1 Entrepreneurs work long hours; women can’t do that because of families.

#2 All-consuming passion is a key to succeed; women can’t have it when they tend to have a startup and private life altogether.

#3 A modest salary proves the entrepreneur’s commitment; it doesn’t work for women who have families or any family obligation.

#4 People from different backgrounds see the world differently. When you bring (diverse people) together in a work environment, (people) integrate to create a broader perspective that is priceless (Eric Shmidt & Jonathan Rosenberg, How Google Works, 2014).

How Does Diversity Affect A Startup?

After reading all these opinions, taking into account our natural tendencies to create groups/teams with similar characteristics the question remains: “Who cares if the startup performance is at the same level either with diverse or similar team members?

Surely, startups need to be adaptable and global in their outlooks. More and more startups need to hire people who speak different languages when they expand to new countries. From my experience, the startup I worked for had team members from five different countries. Although it didn’t have any team member, who can speak the language of the customer. That considerably slowed down the sales process. At the same time, the startup diversity had a benefit of bringing more ideas and perspectives to the table. Although it also increased the time spent on discussion and conflict resolution. In the end, the diverse team didn’t save the startup from its failure. Yeah, the team was inherently diverse on gender, nationality, ethnicity, and age. Though it was not business competent enough to make a startup successful.

Summing up, in my humble opinion the diversity matters if and only to take into account qualifications, knowledge, skills, languages of every team member. Having a mix of people with different educational and working background can make a team more resilient, adaptable, and better at problem solving. Though the diversity impact on the startup bottom-line is still questionable.

 

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