Leading Diverse Teams | Mark MacLeod

April 10, 2024 - Mark MacLeod

Leading Diverse Teams

leading diverse teams

Startups are an inherently creative exercise. We literally create a company out of nothing.

From an idea to an initial product to, hopefully, a thriving company.

There is no one way to do this. Otherwise, we would all be following a checklist. Each company would look like the next one.

Instead, the opposite is true.

Every company is different. Each has a unique culture. A unique way of doing things.

Diversity (in all its forms), plays a huge part in startup creativity and uniqueness. In this post, I want to explore the importance of diversity. In addition, I want to offer up suggestions for leading diverse teams and enhancing diversity inside your company.

Leading Diverse Teams: What is Diversity?

Diversity is the practice of including people from a range of different social and ethnic backgrounds. People from different genders, countries, sexual orientations, etc.

I am writing this from just outside of Toronto. Toronto is apparently the most multicultural city in North America.

I have seen firsthand the power of diversity in enhancing creativity and performance.

Why Diversity Matters

In the very early days of Shopify, there was little diversity. Tobi Lutke, co-founder and CEO was a German programming genius. Introverted. Quiet. Brilliantly technical.

His co-founders were similar to him. Each strong in their respective technical domain. One was also German.

It’s no surprise then that the initial team members were all the same: quiet, technical, male. White.

Tobi’s initial lead angel investor noted this early on telling him that everyone looked like him.

Tobi’s response was to bring on Harley Finkelstein, an early (and vocal) customer.

Harley is another white male, but he is Tobi’s complete opposite. An unabashed extrovert, Harley can work a room like nobody’s business.

In my short time at Shopify, my office was next to Harley’s. He was an absolute machine. Just working the phone, wheeling, and dealing. He had a huge impact in growing Shopify and has been Tobi’s #2 leader for a long time.

This is just one example of diversity.

The takeaway here is that Tobi changed his inputs.

He went from being surrounded by people who thought and behaved like him to adding someone who did not.

That diversity of input led to better and bigger ideas. Ideas that might not have been challenged before were challenged.

There was more creativity. More input. Leading to better decisions. More innovation.

There Are Many Forms of Diversity

Often when we think of diversity, we think of gender.

It’s no secret that the startup world is male-dominated. Especially at the leadership team level.

It takes explicit action and intention on the part of CEOs to change the gender ratio.

But, there are many more aspects to diversity.

Race is an obvious one. Most startups do well here.

Age is another. The startup world favours youth.

I stopped operating in startups 10 years ago. If I was still a CFO, I would be the ‘old guy’.

Age is a plus as a coach. You are a wise elder. It is not a plus in the startup world. I think that is a mistake. History repeats itself. Markets are cyclical. Older people have valuable experience and pattern recognition to offer.

Any difference that leads to more input, more ideas, and different backgrounds, is a form of diversity. And all of these lead to better decisions and results for your company.

Diversity in Action: The Teacher Who Became a Great Executive

Back when I was a VC, I invested in Unbounce.

Very early on Unbouce hired this guy Ryan to be part of their customer support team.

He had no prior startup experience. In fact, he was a schoolteacher.

Fast forward over an 11-year run. Ryan became their SVP of Customer Success. He had a huge impact on the culture and performance of the business. Now he coaches startup founders.

What a hire! A bold hire. Ryan had no prior business experience at all. But, there was something about him. The founders took a chance and he delivered.

This is diversity in action.

The Challenges of Leading Diverse Teams

It would have been easier for Tobi to surround himself with people like him. It would have been safe. Comfortable.

I fully acknowledge that surrounding yourself with people who are different than you is hard.

First, you have to find them. Then you have to embrace their input. They will have different ideas. Different priorities. Different experiences.

It can be common for diverse teams to experience communication issues, cultural differences, and unconscious biases.

To thrive with a diverse team you have to work through these challenges.

At FreshBooks, every team member completed a Clifton Strengths survey before they started.

The purpose of this was to identify the strengths and communication preferences of each team member.

We each had a card on our desk showing our strengths (this was back when people actually went to offices…).

The leadership team did an offsite with a psychologist. The outcome of this was the psychologist showing us how to communicate better and truly be a “team”.

These are just some examples of how to make diversity work.

If you harness and embrace the differences that diversity brings, you will achieve great things.

If you don’t then you won’t have one company. You will have a collection of tribes.

The developers will identify with themselves, not the company. Same for the marketers. And so on.

You don’t want this.

Best Practices for Leading a Diverse Team

Here are a few practices that I have seen work well for encouraging diversity in companies:

Foster an Inclusive Culture: Encourage open dialogue, celebrate differences, and create a sense of belonging for all team members.

As CEO, if you are in a group meeting, speak last. If you speak first, you stifle debate. You limit ideas.

Promote Equity and Fairness: Ensure equal opportunities for growth and advancement, regardless of background.

This takes explicit effort. It has to be policy. Otherwise, it won’t happen.

Implement Diversity Training: Offer workshops to educate team members on cultural sensitivity and unconscious bias.

In the early startup days, this is a luxury. But once you settle into scaling and have a people leader in your company, make this investment.

Encourage Diverse Perspectives: Actively seek input from all team members, valuing each unique viewpoint.

Hold brainstorming sessions. Have a suggestion box. Encourage people to message you at any time with an idea or concern.

Lead by Example: Demonstrate commitment to diversity through actions, not just words.

Culture flows down from the top. If you model diversity it will become a norm in your company.

Practical Diversity Tips for Startup CEOs

Recruit Wisely: Use diverse recruitment channels to build a varied team. Tap into different communities.

If you seek “rock star” developers you will get male candidates. Audit your job descriptions to make sure they are inclusive.

Create Mentorship Opportunities: Pair team members from different backgrounds to facilitate mutual learning.

This will build bonds and expose people to new perspectives.

Adapt Communication Styles: Be mindful of cultural nuances in communication and management styles.

Some cultures are direct, others not. Speed matters in a startup, so I favours directness. Just do it in a way that doesn’t offend.

Monitor and Measure: Regularly assess the team’s diversity and inclusiveness efforts, adjusting strategies as needed.

Measure gender diversity as an example. Segment your team along different dimensions and see which team members have the most impact, are most engaged, etc.

We improve what we measure.

Building a Diverse Team in Your Startup

Hopefully, these examples convince you that it is wise to build more diversity into your company.

Remember, you are creating something that didn’t exist before. More and diverse input = more creativity. More innovation.

New ideas. Ideas that can disrupt markets. That’s when the magic happens.

The personal examples I shared transformed those companies.

Diversity works! It’s not a thing you do for optics. You do it because it has a substantial, positive impact.

You will build a bigger, better company if you embrace diversity in all its forms.

If you struggle with how to harness the power of diversity in your company, let’s chat.

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