Diverse team working together
Many surveys have shown that businesses that have diverse workforces outperform their less diverse peers, as demonstrated by the 2018 McKinsey report. Numerous methods are used to encourage businesses to become positive actors of change and adopt company cultures that include underrepresented communities, from laws, like a recent bill enacted in California, to incentives used to motivate progress. Despite this, some startups remain resistant to change. According to Silicon Valley Bank, only 26% of startups are making efforts to increase diversity in their leadership teams.
Embracing a culture of diversity and inclusion can be a real game-changer for a startup’s positioning and development. Such an approach can have an impact on some of the five key factors necessary for a startup’s success: funding, ideas, the team, timing, and the business model.
Baby-boomers are retiring, and Gen Y and Gen Z are going to be the ones driving a company’s success. They are team-oriented and collaborative.
Why be more diverse and inclusive?
1/ The changing workforce and emerging markets
The world is in a state of perpetual change. Your customer base is changing rapidly, as are its tastes and preferences. New groups of customers need to be represented within your organizations. Diversity and inclusion need to have a place in your agenda — otherwise, your organization will be excluded from the new global consumer landscape and you will give your competitors the edge. By fostering a climate of inclusion and by recruiting for “culture add” instead of “culture fit” — where everyone looks the same and therefore thinks the same way — you will avoid the disadvantages of homogeneous teams and create business opportunities.
Baby-boomers are retiring, and Gen Y and Gen Z are going to be the ones driving a company’s success. Traditional managerial methods do not allow them to develop their potential to the fullest. They are team-oriented and collaborative, which is why an inclusive management approach is essential for a healthier, more productive, and innovative corporate culture, with a higher retention rate and greater commitment.
Speaking of opportunities, a startup’s diversity and inclusion agenda will enable underrepresented voices to express themselves, highlighting new markets that the startup may have missed because of a lack of understanding of different geographical origins, backgrounds, life experiences, points of view and culture. These voices may better understand the unmet needs of under-leveraged markets and your clients.
You may have some employees in your startup who have identified a need in a foreign market that you have overlooked, but in a non-inclusive environment that creates a lack of trust and respect for others, they won’t dare to share such insights about their culture, and you may lose business opportunities as a result. Or to look at the problem from another perspective, a lack of diversity would ultimately lead to the same outcome.
Diverse teams bring new perspectives, new vision. The most successful companies are those that evolve with the world’s workforce, embracing the kind of demographic change that brings different perspectives, better problem solving and decision-making abilities, and different skills to the workplace.
2/ Becoming more agile and innovative
An inclusive startup culture means always being ready to identify potential problems and frictions within the company, and solving them before they have wider implications (on productivity, employee engagement, etc.).
By being inclusive, employees are more engaged and are more likely to go the extra mile when challenges arise in the business landscape.
Startups that integrate a culture of diversity and inclusion into their DNA allow everyone to bring their best selves to work, to have a voice and a sense of belonging. Collaborative work is more efficient and teams enjoy a greater capacity to learn from each other at all levels, making them more agile, innovative, and successful.
The power of difference and inclusion unlocks innovation.
To be more successful and innovative, it is important to create an adequate framework for your employees. Their potential can be enhanced by providing a psychologically safe space, where they feel respected for their differences, valued, heard, and empowered to contribute their ideas. The magic of innovation happens when they are able to take part in decision-making — when a collaborative environment is created that embraces a culture of feedback and the celebration of success.
We often see an increase in innovation in inclusive environments, where “outside the box” ideas are better encouraged and listened to.
3/ Appealing to talent, investors and consumers
Showing that a startup not only has ambitions for economic growth but also to play a socially responsible role and contribute to building a sustainable future can send out a positive image. This can be appealing for the next generation of top talent because, according to a Deloitte survey, millennials are actively engaged when they believe an organization fosters an inclusive environment. Diversity and inclusion are ‘must-haves’ for a startup, helping create a positive dynamic for people to bring the best of themselves to work, thrive and outperform their peers.
Startups with diversity and inclusion in their core company values are also attractive to investors because these values create a healthy corporate culture that retains employees. Not to mention that diversity and inclusion are also linked to an organization’s financial performance and shareholder value.
Investors are opening their eyes to the urgency and importance of investing in diverse startups — which are more innovative and able to challenge ideas more intelligently, with better awareness of different cultures and points of view — because markets are global and require specific products and services. Any other approach may negatively impact a startup’s finances and, therefore, make it a bad investment.
Diversity and inclusion are attractive to consumers who like startups with diverse teams. We’ve seen an extension of this phenomenon with the emergence of inclusive marketing, which is in high demand among consumers.
As a startup, you may wonder where to begin your diversity and inclusion journey. One of the first steps is to articulate your mission and your startup’s values. Then, start small by setting measurable goals, like building a diverse team and defining KPIs because, “If you can’t measure it, you can’t improve it.” Before recruiting a diverse team, look at your board and executive members to see if they represent your ambitions for the composition of the company overall. Are there any diverse members from underrepresented groups? Changing organizational culture is not a state but a process. It requires each individual to make a choice to be committed, to take action every day, and to hold themselves accountable.
ABOUT THE AUTHOR
Dolores Crazover is the founder and CEO of DEI & You Consulting.
She has a passion for microbiology and is on a mission to complete a Rubik’s Cube within four years.
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