Why Bringing Diversity to your Start-up Team is Critical

diversity

Why Bringing Diversity to your Start-up Team is Critical – A good leader seeks diversity in work and life experience, as well as in approaches to problem solving, leadership and development.

Why Bringing Diversity to your Start-up Team is Critical

Too often, we think about diversity too narrowly. Usually terms like race, gender, sexual orientation and religion come to mind. For start-ups, these diverse descriptions are a good place to start, but they don’t go far enough. Diversity is not the same as inclusiveness … and both are important.

Start-ups, however, need to think more broadly because they need to create leadership teams that represent not only diverse life experiences, but a range of mental models, problem solving abilities and relationship-building skills in order to quickly identify problems, overcome challenges and generally be agile and resilient as they navigate toward their goals.

Why Diverse Teams

I have been involved in some very diverse teams having worked in international organizations over the last 15 years. Not only did I enjoy the diversity of sharing my work experiences with colleagues from different nationalities and cultures, but I found it easy to do. Many people who haven’t experienced a culturally-diverse organization think it is difficult to blend different cultures and perspectives, but I have learned that it is much to the contrary – I found that diversity created a  thriving environment that brought with it so many new ideas and opportunities to learn. I found these diverse teams were a major contrast to being on teams where everybody shared similar life and work experiences.

Beyond general agility and resilience, I have found that diverse teams:

  • generate more innovative ideas.
  • manage through problems more effectively.
  • offer different world views and perspectives on a market.
  • bring with them varied networks of potential partners and customers.
  • make better decisions. Homogenous teams don’t challenge assumptions, debate ideas or force people out of their conceptual boxes. Diverse teams will look at a problem from many different perspectives before making a decision.
  • are a good place to start for the next round of recruiting.
  • create a more exciting place to work.

Today, I use diverse teams and inclusiveness as a key dimension for evaluating the leadership capabilities of founders. If the founders encircle themselves with like-minded people, that tells me they think they will always be right and they seek only people who will confirm their world view. Today’s markets are global and diverse, so it is important that start-ups, especially those with global ambitions, recognize this early and recruit people who can bring a global perspective.

If you are a founder, surrounding yourself with great talent is important. Don’t look into a mirror and decide that everyone you recruit should look like you. Take the time to not only design the product or service you want to launch, but also the team that is going to help you launch it.

Diversity Means Diverse Development Paths – As Leader, Celebrate All Accomplishments

To nurture a diverse team, identify individual strengths and develop the people along a path where they perform the best. This is crucial. It is important though, that your staff understand there is just one path toward success.  There are technical paths and leadership paths, as well as paths that allow people to switch disciplines either to align better with interest, or, with abilities.

For instance, I recently came across some really great technical people who did not have the best interpersonal skills. That is okay. Let them do what they are good at, the kind of work that fulfills their passion, and let others do the more customer-facing work.

Letting technical people do technical things seems counter to the development of a leadership team into a well-rounded, multi-skilled group. It is not. It really reflects the empathy and people skills required to develop and keep talent. Not all people want to be people managers, or develop customer relationships. Good leaders will create opportunities for advancement as the company grows which will offer people paths, customer paths and technical paths.

People paths lead to management and leadership opportunities, focused on nurturing the people who comprise the organization. People paths look internally. Customer paths look externally, ensuring that customers have what they need to succeed, really helping the organization develop long-term relationships with customers. The technical paths recognize technological skills and allow people to progress with those skills, developing into mentors and coaches for other technology-oriented people within the organization. This approach goes beyond the individual contributor because it asks senior technical people to be leaders of technical communities. They are still able to demonstrate their leadership, but in a way that aligns with their interests, rather than forcing them into roles that often, frankly, do a disservice to the organization because it takes them away from where they can best contribute. These technology leadership roles help make sure the organization keeps exploring the technical boundaries at the same time they ensure the quality of the technical solutions.

What Start-up Leaders Should Consider When Creating a Team

So there are some general thoughts, but I want to share some very practical recruiting and organizational design thoughts as well. I have learned these from the start-ups I’ve been engaged with, as well as those I have helped mentor.

  • Think about diversity in education, country of origin, age, travel experience, language, lifestyle — these lead to a diversity in thinking models, as well as approaches to problem solving.
  • Hire technology specialists, not generalists, people who understand deeper architecture and scalability issues.
  • Make sure you hire people with prototyping skills. On the flip side, you need people who can build prototypes that can be used for fundraising, marketing and demonstrations. These people differ in skills from the deep technical talent because they know how to make something appear to work, that may not actually work. They also possess the ability to let go of deeper technical issues, at least for a moment, while they build and deploy the demonstration system.
  • Hire sales people who can both listen to feedback and understand the feedback so they can bring it back to the technical team. Early sales people should also be very enthusiastic about the product, helping to get customers excited about the possibilities.
  • Bring in business management people as soon as it makes financial sense. Let the technical and management team do their thing. Much needed hours spent in front of QuickBooks, HR, legal and other issues don’t generate revenue or innovation.
  • Never outsource core product or service development. Start-ups need to be the team that can build something, not the team that can specify something to someone else to build. (If you outsource, full IP protection is recommended.) This implies that you know what your core product or service is. If you are offering a service, and you need technology to facilitate the service, it is okay to outsource that technology component because it is not core. Start-ups often think that technology is everything, but innovations in business model, service or partnerships don’t always need unique software to make them work.
  • If you are building a global team, hire people with global experience.

Finally, don’t get over concerned with finding leaders to take the business to the next level.  I have seen too many founders getting outside “business experience” in too early. Not only does this potentially dilute the stock for the founders and early employees, it often has the opposite effect on the company. Rather than creating a more mature company quickly, it can disrupt good working relationships and add rigidity that isn’t necessary. Spend time building a good diverse team and achieving your goals. If you do a good job, and hire adaptive learners, perhaps you won’t need to bring in outside leadership – you’ll be able to take the company to the next level with the team you have built.

The Great Decoupling: Is There A Prescription for Work Displaced by Automation?

Robot repair technician represents the Great Decoupling.

In a recent Harvard Business Review article, ‘The Great Decoupling,’ Erik Brynjolfsson and Andrew McAfee, authors of, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies, face the reality of wage stagnation in average incomes in the United States and the elimination of many mid-level jobs.

Early in the article Brynjolfsson says: “Digitization is creating new types of economic disruption. In part, this reflects the fact that as computers get more powerful, companies have less need for some kinds of workers. Even as it races ahead, technological progress may leave some people—perhaps even a lot—behind.”

And McAfee follows with: “There’s no economic law ensuring that as technological progress makes the pie bigger, it benefits everyone equally. Digital technologies can replicate valuable ideas, processes, and innovations at very low cost. This creates abundance for society and wealth for innovators, but it diminishes the demand for some kinds of labor.”

Three Issues with The Great Decoupling

We have to ask ourselves if this is inevitable. For the most part I like this. Anything that can be automated means I can do something else. There are three areas that bother me though. First, is personal motivation. If someone loses their job to automation, are they motivated to learn a new skill to engage in a new role, so that they can continue to positively contribute to society. The second factor is tougher, because we have to ask, that as the industrial age wanes, and the digital age takes over, what will people value. In other words, will the kind of work people find fulfilling be something that society values.

And third, we have to address wealth distribution. As U.S. corporate profits rise to heights in the aftermath of the  great recession, we are not even seeing labor’s share of GDP keep up with that trend, and in fact, it has fallen. Wages as a percentage of GDP are ten percent lower than they were in 1950. Corporations, however, are accumulating great amounts of capital that has not been taxed and that isn’t being invested in anything.

Innovation in Wealth Distribution

We have to ask if legislators need to insist that the large holders of cash in the technology industry redistribute their wealth—or better, do companies like Apple and Microsoft, Google and Facebook — including not-for-profits like the Gates Foundation — start investing their money in creating the new skills required to really use technology effectively rather than to just create it. I think we really need to look not at solutions where government redistributes wealth, but how to encourage businesses do it better. The companies that can do that will be winners. Unfortunately, they have their own investment portfolios and advisors that aren’t great at looking at these issues. As I said, we will need to encourage, and we will need to be patient.

The work displacement is real, and it isn’t all in repetitive factory jobs. It can also be seen in the service industry. Let’s take a look at an example of a bakery. In traditional bakeries, a person working there would get to know the clients, they would greet them personally every day and anticipate their orders. Today, we do this with technology and loyalty programs. The person you have never met sees you are coming to the counter and anticipates your order. But this person isn’t necessarily knowledgeable about baking or customer service, or even interested in becoming so. The traditional bakery worker would stay perhaps their entire career at one bakery, earning higher wages every year. Today, that person is probably a part-time college student with no interest in a career. It isn’t at the same scale as people being replaced by robots in a factory, but it is just as much a labor displacement where automation makes it less expensive, but results in multiple reductions in knowledge and customer experience. But if we only look at the profits of the bakery, their margins, then everything looks OK, at least for now.

The next issues becomes what to do with the profits. That margin goes back into the capital. What happens to that capital? Who do you give that to? If an organization accumulates huge surpluses that go beyond a capacity or willingness to expand the business, do they in turn encourage personal investment in the people they know—do they encourage people to study or explore new areas where they want to create value? Do they go as far as creating new definitions of value?

One way we are seeing this happen is through “B” corporations. These corporations can get around the traditional view of shareholders, who ultimately expect financial returns, and focus on social and environmental performance, accountability and transparency.

Redefining the Relationship to Work

But we also have to redefine our relationships with those who work. We have to encourage engagement, we need to ask how long we tolerate those who avoid participation. I create an environment where I don’t require people to attend meetings. People choose which meetings they need to attend. What do we do with the employee who chooses to never attend a meeting? This approach is set-up to encourage personal responsibility, not to let people avoid it. We have to consider this question when considering how to re-engage displaced workers.

In many ways, the population isn’t ready. We have been giving them junk food and stupid TV. If we end up redistributing wealth, it can’t just be a check for doing nothing. It has to be tied to people doing something positive to contribute back.

If we think about new forms of value, I think we are seeing the resurgence in creative skills too, which is really encouraging. It’s already there in some ways. It probably isn’t as strong as what we are seeing with the push for STEM, but the creative piece is back also with innovation. If we don’t have people who can create and collaborate, then we can’t create new value. Businesses are starting to realize this.

Investing in Leveraging Technology, not just Making It

I think we have to really worry about a zero-sum game where technology companies only focus on creating technology and not how it is used. If we end up bankrupting the economy, no one will have the means to use the technology, let alone the interest in anything beyond survival. We need to create a new set of values that are more holistic, and more connected. We need to help people imagine innovative ways to take advantage of the technological capabilities that go beyond simple ideas of productivity.

I’m all for eliminating the complexities of the digital economy, so I can concentrate on bringing value to the human economy.

Leadership and Management: It’s Time to Teach Empowerment

Leadership Diagram Shows Vision Values Empowerment and Encouragement

Leadership and Management: It’s Time to Teach Empowerment

Management was the role that imposed the discipline and managed the process. Managers were taught to think like this. And the only model they had until they started work was the education system — and previously it was about the authority.

We live in a world in which employees are expecting to be influenced, motivated, and enabled to contribute toward the effectiveness and success of a common goal. We often call this leadership.

I think our current issues of enabling future leaders versus managers goes back to education as designed for the Ford assembly-line system and the industrial age.  
We often still teach one subject at a time, one class following another, one teacher lecturing many students.

Remember, I’m French! I like a little process, or else it’s chaos, but sometimes, sometimes you just have to let people go so they can explore.

Do students really need that level of authority? Do the students need a manager to tell them what to do? Do they really need detailed instructions for everything? When there is a project, there is a beginning and an end, and a lot of stuff that goes in between that is about negotiating your way toward a goal. Especially if it’s something new. How do you manage to do a project that nobody has done before?

I’m not sure that a person who is managing and leading you is the person who has to manage the process. If you are building a house with a plan and certain entry ways, think about the leader as the one who creates the context for people who need to do the details. She says, here’s the budget and the general idea, but all of you, architects and builders and craftspeople, go do what you do best within these guidelines. They create a creative community in the moment and the leader helps that community come together. Yes, you have to have people who know how to hang cabinets, and a vision to align with; they could hang the mismatched cabinets on-time and within budget, and they could be good managers, but they wouldn’t be helping create something wonderful–they would just be following a disconnected process.

In France and more Latin cultures, there is not as much process as I find in the US. People just think. They do what they think is the right thing. Too often people fall back on the process and say I failed because it wasn’t in the process. I say, just think. Empower people and let them do what needs to be done. People need to think critically, fail and learn from those failures. Just think and you might succeed at the first trial, or you can fail and learn and try it again! You don’t need process for everything.

If we go back to education, you have to start with thinking and empowerment at a very young age. If you empower someone trapped by process thinking, they won’t know what to do. They were raised with rules and instructions, limits and constraints, and they can’t just be empowered out of that. We have to help educate people on how to be empowered. I don’t think a manager can do that, only a leader can create the environment that supports empowerment.

Start-up Lessons: More Business Opportunities With Better Talent Management

businessman writing leadership skill concept

Start-up Lessons

When I think about all the companies that I’ve worked for, not leveraging the talent already in a place always strikes me as one of the easiest things to fix, and one of the hardest management missteps to explain away.

A company at its most fundamental is its people, and if managers can’t find a way to effectively use their most important, and most accessible asset, then they need to rethink the way they approach opportunities.

When looking for good practices, I look to start-ups, which would’t survive without good talent. They need to not only center around a cool idea or cause, they need to immediately engage, continue to intrigue, and perhaps more importantly, they need to prove that they know how to build an organization.

Here are four practices that I see in all good start-ups. I encourage you to consider taking these up today, so that you can turn opportunities into business, and create a more fulfilling work environment at the same time.

Transparency

Unlike mature companies which create departments and functions, and organizational charts and job descriptions, start-ups avoid creating these, choosing instead to have different people, with different backgrounds and varying degrees of experience, rally around shared goals to just get the job done. Many times, start-up roles are filled by people without deep management experience. Big issues that require collective action get addressed as a group and not obscured by the silos. In mature organizations, people often just keep their heads down and do their work. They rarely get called upon to do something outside of their job description, and few volunteer, even if the opportunity arises.

It may be important for a mature company to create efficiencies of scale, but that doesn’t mean they need to completely abandon the idea that everybody is working toward the same goals, and if you can contribute, by all means, jump in and contribute.

Of course, this requires organizations to create practices that overcome the momentum to block the flow of information, to bottle up talent inside of functions, to ignore experience that doesn’t fit the job description, and to make work about getting the work done, not achieving anything bigger than the moment.

Bring in transparency and empowerment by making all meetings public and open to all employees who have some interests or passion on a subject. This approach to meetings eliminates silos–it gives people who really care permission to come to meetings that align with their passion and experience. It helps organizations transform meetings into collaborative experiences that find solutions.

And it doesn’t hurt if all meetings are optional. Create an environment of choice and empower your teams.

And it doesn’t hurt if all meetings are optional. Create an environment of choice and empower your teams.

Some people have a difficult time with the idea of transparency. In this context, the idea is pretty simple. Think about a one room start-up. The phone rings. It is a customer. The customer is on speaker phone. Everybody in the room hears from the customer. They hear about pricing, licensing, customer service, design and quality…all at the same time. The customer’s input doesn’t get parsed, doled out, and passed along from one function to another to treat discrete symptoms. The communication with that customer is transparent. Everybody, in every function, gets all the information.

Even the most mature organizations can use tools like collaboration technology to create transparency and make sure people are aware of opportunities when they present themselves. Individuals can subscribe to channels in enterprise social networking, for instance, to see what opportunities exist, to listen to what the customer is saying.

Hire the whole person

People looking for a job today are being told they should shrink their resume down and tailor it to meet the jobs they are applying for. Often the first reader of a resume is an algorithm looking for key phrases, phrases like years of experience, Masters in Electric Engineering, or worked in Singapore. I was talking with a recruiter for a large software company not long ago and she told me that what keeps her up at night are all the great resumes she never sees because they are filtered out by technology.

This sad situation has created a world where recruiters and hiring managers don’t really get to know the whole person. By not hiring a whole person, organizations end up not knowing things about a person that may prove valuable in future situations. Does somebody in a marketing role have a solid retail background — a background perhaps better suited to crafting messages about a new retail-oriented product than the person assigned? Does a customer service person have a strong manufacturing background so that he or she could take the lead on enhancing technical product responses by engaging with manufacturing and engineering on solutions that aren’t in the current documentation? Has someone spent most of their school years through college, playing in an orchestra — but because that wasn’t relevant, failed to be consulted on the background music for the new corporate video?

In a start-up, you do not get hired for today, nor tomorrow–you get hired so you can contribute as your company grows.

In a start-up, you do not get hired for today, nor tomorrow–you get hired so you can contribute as your company grows.

Hiring the whole person enables and empowers. It enables the organization to match emergent opportunities with people already inside the organization. And it empowers the employee to say yes when opportunity knocks.

Make work meaningful

Organizations should have a higher purpose than making profits or serving shareholders.

Organizations should build social and environmental good into their outcomes. They need to have vision that inspires employees. But organizations don’t make work meaningful, people do. People create the work environment.

Start-ups have a clear advantage when creating a meaningful work experience. Most of the time the founder is part of this process. He or she can share the vision and the passion that inspired the creation of the company. The meaning starts with the interview.

Each manager of your organization needs to translate the passion instilled by the founders into inspiration for their team. Managers need to act as leaders, to go beyond just getting things done.

Each manager of your organization needs to translate the passion instilled by the founders into inspiration for their team. Managers need to act as leaders, to go beyond just getting things done.

Managers also need to think holistically. They need to design work experiences. They need to connect people across the organization, and facilitate the discovery of meaning. Managers need to think beyond tasks and actively tie work to strategy. The book, Management by Design by Daniel W. Rasmus, suggests that organizations think about this as the rhythm and motion of the business — that work flows for a purpose and that people need to understand its destination. By creating these connections, as the organization moves forward, all of its assets stay aligned because they are working toward a common purpose.

I know we don’t all work in post-industrial organizations with innovative, co-created cultures that offer distributed deliberation and decision making with highly transparent processes and data. If we want to improve employee engagement, though, we need to help those we manage make sense of what they are doing at the highest level possible, and perhaps that will help us bring some additional meaning to our own work.

Unleash talent

A major organizational strategy should always be: find work that best fits people’s talents and passion. We need to unleash people to apply their talent. But work doesn’t always end up accomplishing this. The hiring process forces people to squeeze their talents into a job description. Once hired, they hone their work to meet the objectives they negotiated. Some people put their objectives on the wall of their cubicle so that when asked to work outside of the parameters of those objectives, they can point and say, “sorry, that isn’t in my scope of work.” In all the reduction-ism we end up under-utilizing people. We hire people packaged in boxes and then put boxes around their boxes in the cause of productivity. We tell them to eliminate distractions and to focus on what is important. And these boxes keep people from exploring the organization. And they also keep the organization from exploring its people.

If we want engaged employees in a world of rapid change, we need to get to know them, and allow them to get to know the organization.

In a startup, goals change at a fast pace. People know that today’s objectives might well change tomorrow. If we want engaged employees in a world of rapid change, we need to get to know them, and allow them to get to know the organization. We need to accept it when people leap out of their boxes and demonstrate a willingness to contribute in new, unexpected ways. We don’t need to create incentives if we offer permission. Letting people explore is good for engagement, and it’s good for innovation. Too often we try to turn businesses into machines. That makes us think about people like machines, and when we do that, we lose all hope for passion and novelty.

A concluding thought

We all get caught up in what needs to be done. There is no excuse for ignoring the value that can be realized by helping people find ways to bring their knowledge and experience to bear on important challenges and opportunities.

The seemingly insurmountable levels of employee disengagement can be reduced one percentage point at a time, one person at a time. Managers need to think beyond the boundaries of the boxes they are in, and help those they are responsible for nurturing find ways to move beyond their boxes and apply their best selves. The mighty combination of transparency, a holistic view of the employee, an investment in meaning, and employee empowerment, creates a business environment that doesn’t need to be told to succeed, it is one that just wants to succeed.