My favorite five secrets of a great business team? This list came to me first as an answer to the question how do you build a great business team on Quora. These five points aren’t something from the business school curriculum. They come from the experience of actually doing it, recruiting a team and growing a business from zero to millions. (For more on that story, click here).
No skill or experience justifies lack of integrity. You need to trust the people you work with, and particularly, the people who become key team members to build on.
Diversity makes better businesses. Not for fake political reasons, but for real business reasons. Teams of different kinds of people – gender, background, ethnicity, and so forth – have broader vision than teams of people who are all the same. Diversity has been given a bad name by bigots. It’s not just morally correct, it’s also better business.
What diversity does and doesn’t mean.
Different skills and experience. You don’t want all developers or all marketers, you want developers, marketers, administrators, producers, leaders, and so forth. I see student groups that are three and four people who share the same major; that rarely works.
Shared values create strong bonds. Palo Alto Software was built by a team that shared my founder values about good business planning, startups, and small business. Jurlique was built by a team that shared founder values about cosmetics with only natural organic ingredients not tested on animals. And don’t confuse shared values with diverse types of people, skills and backgrounds. They are compatible, not contradictory, ideas.
Avoid the all-C-level-officers team
Beware of title inflation. Having the first four people all have C-level titles is usually a sign of youth and lack of experience. In the real world, founders are rarely all fit to be C-level officers for the long term. I recommend vague non-committal titles in the beginning, like “head of tech,” “marketing lead,” and so forth. Leave room to recruit stars later on, as needed, with the big titles.
Diversity is good for business. Equal opportunity is not only morally and ethically right, it’s also a better way to run a business. Here are some reasons why, and points to consider.
What’s intuitively obvious
It’s pretty much accepted wisdom that when people come together in a common business, it’s better for them to have different skills and experience that the same thing. You want somebody good at sales, somebody good at marketing, somebody who likes managing the money, somebody who can produce whatever it is you sell, right? That’s aside from gender, ethnic, religious, age diversity. The idea is commonly accepted.
Go from there to the obvious parallel with diversity of vision, background, outlook, and experience within a single business culture. Think for just a moment about the larger vision involved in branding and marketing, expansion, and growth. Which is more likely to produce new ideas, early alerts of changes, awareness of new markets and new products: the birds of a feather who flocked together, or a group that includes different people with different backgrounds and ideas?
Diverse companies outperform non-diverse companies by 35%, according to a McKinsey study cited in that post.
Sociologist Cedric Herring found that companies with the highest levels of racial diversity had, on average, 15 times more sales revenue than those with the lowest levels of racial diversity. Herring found that for every percentage increase in the rate of racial or gender diversity, there was an increase in sales revenues of approximately 9 and 3 percent, respectively.
A study at the Kellogg School of Management6 found that diverse teams outperform homogeneous ones because the presence of group members unlike yourself causes you to think differently.
In a Catalyst report called The Bottom Line: Corporate Performance and Women’s Representation on Boards7, researchers found that Fortune 500 companies with the highest representation of women board directors performed better financially than those with the lowest representation of women on their board of directors.
Diversity is good for business
The bottom line, for me, is the bottom line: diversity is not just the future, not just the way the western world is going, not just a natural result of trends and technology, and not just morally and ethically right. It’s also good business.