When they’re trying to launch a new business, entrepreneurs have a lot to worry about. Developing a business plan, securing funding, conducting market research and testing, and doing the logistical work of setting up a business is only the start. After that, you need build and lead a team that’ll satisfy your customers, and grow your business into an innovative and ultimately competitive operation.
All these jobs, and a wide range of smaller tasks, are the reason that many entrepreneurs find themselves ceaselessly working 60 or 80 hours per week. Establishing a business is hard work, and the business owners who succeed are often those that understand that they aren’t necessarily the best person for every job. Specifically, they understand that diverse tasks and responsibilities require a diverse workforce, and they learn how to embrace this diversity to make their business more competitive.
Professional diversity is critical for innovation
Large businesses need a lot of bureaucracy to function, which can make it very difficult for them to build a workforce with a wide range of professional backgrounds. When hiring for a new department, for example, human resources might be directed to only consider applicants with very specific educational backgrounds at a relatively low rate of pay. As a result, they’ll end up with a homogenous office full of recent university graduates that have the same educational background and little work experience. A team like this is might operate effectively, but they’re unlikely to be innovative.
Startups can afford to be much more flexible. In a small operation, an entrepreneur can personally evaluate candidates with very different backgrounds who might bring different qualifications to the table. Working together, this diverse group of employees can act as a melting pot of ideas, bringing a wide range of competencies and experiences that can lend new perspectives to old problems.
Age diversity promotes flexibility
Both large and small companies often make the mistake of ignoring the value of age diversity. In larger businesses, leadership positions are often held down by older employees, while young workers are isolated in the lower ranks. Startups, on the other hand, might lack older employees entirely, leaving the entire operation in the hands of younger and less experienced leaders. This is a problem, because successful businesses need younger and older employees at all levels in order to maximise their potential.
Younger employees can avoid a lot of mistakes and become much more competent much more quickly when they’re working right next to a coworker that has a few more decades of experience than they do. Also, more experienced team members can help to define and sustain a healthy company culture in ways that newer workers might simply not be able to. Conversely, younger employees bring new ideas, new technology, and the energy to implement change and innovation with them.
Gender diversity improves leadership
Despite decades of improvement, the vast majority of business leaders are still men. This is true particularly in top level management positions in nearly all industries, and notoriously extreme in the tech sector. While polling has widely found that men are assumed to possess more leadership qualities than women, hard research suggests the opposite.
Harvard Business Review published a detailed study in 2012 that showed that women outperform their male counterparts in almost every respect. In particular, women showed more initiative, focused more on professional development, and displayed more honesty and integrity. The data also showed that this gap grew more pronounced in higher level positions.
This doesn’t necessarily indicate that women are inherently better leaders, but rather that only the most competent women overcome persistent biases to reach these leadership positions. For business owners, the point is that this means that top leadership talent is concentrated among female applicants. Moreover, gender diverse leadership helps to keep businesses from falling out of touch with their markets and their employees.
Diversity expands your business’ reach
Diversity, in a more generalised way, ultimately serves to give your business greater reach. This is true in terms of building a larger network with businesses and professionals in a wide range of industries, as well as giving your business access to more knowledge, skills and experience through your team.
Besides giving your business the range of perspectives it needs to innovate, this also enables you to plan and implement disruptive changes effectively. Growing, competing, and making cutting-edge changes often requires building new relationships with suppliers, potential customers, and investors. By building a startup as a diverse workplace from the ground up, you can ensure that your business has the resources it needs to outperform less prepared competitors.