Drawing from experience and research, we'll delve into the evolving needs of the boardroom, how diversity should adapt to the business's growth cycle, and introduce innovative and sustainable solutions to access diverse talent.
As entrepreneurs and business founders, we often find ourselves on a journey filled with challenges and opportunities, especially when it comes to scaling our organisations past the £1 million turnover threshold. I'd like to share some insights on a crucial element that can make all the difference: diversity of thought.
Scaling businesses in the UK face a range of challenges. While they are crucial for driving economic growth, innovation, and job creation, they encounter obstacles related to talent acquisition, market access, and financing.
These challenges can hinder their growth potential. Additionally, regional disparities persist, with some areas having greater access to resources and opportunities than others. To address these issues, the government has taken steps to attract international talent through visa routes, foster market connectivity through the Innovation Hub, and unlock private investment in scaleups. The goal is to ensure that scaling businesses across the UK can thrive and contribute to the country's economic prosperity while narrowing regional disparities. However, for me one factor stands out as a game-changer: diversity of thought leadership.
These are not just buzzwords; I see diversity in leadership as a strategic necessity that brings together a wealth of perspectives, experiences, and skills, equipping businesses to confront challenges with creativity and resilience while seizing unnoticed opportunities.
The statistics that underscore this strategic imperative are well documented: diverse companies enjoy a remarkable 2.5 times higher cash flow per employee, compared to their less diverse counterparts. A Boston Consulting Group study found that companies with more diverse management teams have 19% higher revenues due to innovation, and that gender-diverse executive teams consistently outperform their less gender-diverse peers. Additionally, according to research by Fundera, racially and ethnically diverse companies are 35% more likely to perform better, while diverse teams are 70% more likely to capture and penetrate new markets.
The statistics relating to neuro diversity are particularly significant in relation to entrepreneurs where it is estimated that 40% of all entrepreneurs are neurodiverse (four times the overall population average of 1 in 10). I have been fortunate to work with several neurodivergent leaders who credit their diversity as a key factor in their success, and who epitomise the power of thinking differently. Think of Steve Jobs’ infamous first Apple launch campaign:
‘Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently… they push the human race forward’!
These statistics and stories highlight that embracing diversity of thought is a potent tool for growth delivering tangible financial, strategic and operational benefits to your business.
But, despite most leaders and entrepreneurs recognising the importance of diversity of thought, many are hindered by a lack of diversity in their own networks, and in those of the traditional search firms for NEDs and Advisors they may draw upon for support. Indeed, whilst founders and CEO’s strive to access diversity of thought, they may not always know how best to bring the potent power of diversity to play for their business at that particular time.
The composition of your leadership team and boardroom should evolve as your business grows. In the early stages, agility and innovation are paramount, requiring leaders with backgrounds in entrepreneurship and rapid decision-making. As your business matures, strategic leaders with expertise in governance, risk management, value creation and market expansion become indispensable.
A Harvard Business Review article by workplace culture experts Randall S. Peterson and Heidi K. Gardner underscores that enhanced decision-making and improved business performance occur when diversity and inclusion align with the growth trajectory of a business. Inclusive leadership fosters a more collaborative decision-making process, ensuring diverse perspectives are considered and preventing over-confidence in decisions.
The systemic problem is that accessing diversity of thought at the senior leadership level can often be prohibitively expensive for scaling businesses, making traditional full-time C-suite expansion impractical. Here's where innovative blended leadership teams come into play.
Fractional C-suite Executives, Board Advisors and Non-Executive Directors (NEDs) offer a cost-effective and strategic solution to the diversity challenge. These experts provide specialised skills and insights on a part-time basis, allowing you to leverage their expertise and diverse perspectives without the financial strain of full-time hires. This approach ensures that diversity of thought isn't just an ideal but a practical and sustainable asset for your scaling business.
Tapping into diverse, fractional, and NED talent enables businesses to access the right expertise at precisely the right time, enhancing their ability to make informed decisions and drive sustainable growth.
The advantages of having a diverse leadership team guiding your scaling business are well-established. Research consistently shows that diverse boards outperform homogenous ones in terms of innovation, decision-making, and financial performance. Customers and investors also value businesses that prioritise diversity of thought and inclusion.
As we navigate the complex landscape of scaling a business, diversity of thought in leadership isn't merely a checkbox; it's a strategic necessity. Our journey is marked by challenges and opportunities, and diverse thought leadership equips us to navigate them effectively. As your business evolves, so should your leadership, adapting to the unique needs of each growth stage. This strategic yet cost-effective approach ensures that diversity isn't a luxury but a tangible and sustainable asset for your scaling success.
