I’m a female CEO—apparently a rare breed these days. Even rarer perhaps is my leadership team, which is 50 percent women, and that of the 31 people on staff at my financial technologies startup, 50 percent are women. That said, my development team is all male, a fact my CTO and I are working hard to change by pestering female developers on LinkedIn. We also have team members from all over—from Canada to Costa Rica—and we’re diverse in age, interests, ethnicity, cultural identity, backgrounds, opinions and perspectives.
These differences are inherently important in how we solve problems as a team. They lead to valuable discussions and better decision-making as a company. Researchers have measured and documented higher performance by diverse teams, and anecdotally, I can confirm that my company is reaping the benefits of prioritizing and valuing a diverse team as a core value. The link between fostering a culture of creativity and innovation and prioritizing diversity is a clear one for me.
I sometimes hear the argument that diversity makes it hard to build and maintain great culture—that great teams should be able to have a beer at the end of the day and hang out together outside of work. The truth of the matter is that it’s not easy to maintain great culture with such a hollow metric in any case. Our team works amazingly well together in solving the complex challenges that come up each day. More often than not, it’s easy for us to gather and enjoy time together outside of work because of the successes we share. But we view this as a secondary bonus, not a primary vehicle for building a great team.
I hire the best and brightest people I can find who will push our company to be better. How do I maintain diversity as I hire? I follow three principles:
Forget the Beer Test
This idea that you should only hire people who you would get beers with is just nonsense, in my opinion. I enjoy drinks with all kinds of people, and it doesn’t mean I’m going to like working with them. Even though the beer test is designed to be a personality test of sorts, I think it points CEOs in the wrong direction; it gives us a false sense of security that we’re hiring the right person. I suggest hiring people who pass the “they’re going to force me to raise my game” test instead. Focus on the right qualifications for the job even as you strive to balance culture fit with each hire. In many cases, because you often know the identity and needs of your company best, you have to rely on your gut after taking a holistic look at your candidate.
Seize the Moment
When I meet the right person who both fits a need I have and brings diversity to the team, I sacrifice other luxuries to hire them and take the payroll risk. When I met my COO, who was one of the most accomplished women I had ever met and brought critical skills to the table, I hired her even though I couldn’t really afford it. I knew it was a bit too early, but I also knew the chances of finding another woman with her experience and knowledge—and who would want to work at a risky startup—were slim at best. So I made it happen, and it stands as one of the best hiring decisions I’ve ever made. When you meet the right person, think hard about what it would mean for your team and the future of your company to pass her by because of cost or other factors.
Know Your Data
Know the profile of your team and its members. Not just in terms of diversity, but also in terms of your team’s cultural profile. We recently signed up with RoundPegg to discover the shared values among our employees and reveal areas where we differ. It helps us make informed hiring decisions and better recognize candidates who will bring diversity of thought and fundamental alignment of culture and values to our team.
Why is diversity in the workplace so hard for so many to achieve? For a variety of large and complicated reasons. Startups, being nimble and progressive in many ways, have a huge opportunity to get it right, but diversity is still not a core competency or priority for many. NCWIT is encouraging more companies to release diversity data to highlight the issue, because in the end, we can’t fix a problem we don’t fully see or understand.
Having a diverse team has increased my chances of building a better company that will stand above the competition. Being cognizant of how difference fits in as we define our collective culture is not a hardship. These approaches have helped us be more mindful about what we do, how we do it and how it impacts our team as a whole.
Author: Krista Morgan is cofounder & CEO of P2Binvestor, a marketplace lender that provides asset-based working capital to growing companies.