Question

3. What is the benefit of forming entrepreneurial teams when starting a company? Is a more diverse team better than a team with similar members for a business venture?

Answer 1

A 2018 study of 1000 companies across 12 countries by McKinsey and Co found that companies in the top quartile for gender diversity on their executive teams were 21 percent more likely to experience above-average profitability. The more diverse your team is the more opportunities to approach a problem from different angles.

Adding just one 'outsider' to the mix caused the whole team to spend more time considering other possible options, leading to better problem-solving. An interesting conclusion these 'diverse teams' were less confident in their collective response.

As Andrew Hill, editor at the Financial Times stated in a recent article about the perils of groupthink: "Groupthink persists because taking better decisions is harder, and takes longer. Homogeneous teams are easier going. Decision-making seems effortless. As a result, such groups can be perilously overconfident about the rightness of their ideas." Diverse leadership is just as important An important lesson we can learn from this study is that to leverage the full benefits of diversity, you need truly diverse teams.

A lack of diversity in leadership will continue to place barriers on innovation, even in the most diverse teams. One study found that when an all-male team of decision-makers made decisions that were then executed by a gender-diverse group, the group underperformed by 15 percent.

Teams that are also diverse in age and geographic location make better decisions 87% of the time. Diverse leadership teams not only make better business decisions; they also influence team behavior.

One study found that when leaders of professionally diverse teams promote inclusivity, they can prevent the negative impacts of perceived status within a team, leading to improved performance.

While governments and top research institutes have tried for decades to solve some of our most pressing global issues ranging from poverty to obesity to environmental degradation. We are now seeing the rise of innovative solutions coming from a new source.

According to Sztaba, the key behind Syntoil's innovative solution is its inclusive and diverse team. Although studies show that female CEOs make double the revenue, they still receive less funding, demonstrating a persistent bias in the startup world.

Status differentials in healthcare organizations have been proven to result in the low performance of diverse teams.