Week 4: Discuss “The Benefits And Risks Of Homogenous Teams” & “The Role Of Founders In Building Teams”

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Human capital is so important for a startup company. The people in your business are everything, it does not matter what field you are in. The role of founder is how to pick great people (A-players), motivate them, get them excited to come to work every day and lead them to make the best job possible in the most productive way.

Nothing has a bigger impact on your business result and the quality of your life than to build a startup team and find key people for each role. To make up a team, the founder faces the challenge of the mix of cultures and personalities. This decision on who to choose can make or break its effective output and viability.

A homogeneous team includes people who are as similar as possible, with similar points of view, learning abilities and life experiences:

Benefits: take less time to find people. Team members have an easier time of comprehending each other’s verbal and nonverbal communications, have more shared experiences in common.

Risks: the lack of diversification in a homogeneous group stifles creativity and information processing, following “Cognitive Effects of Racial Diversity” published in “Journal of Experimental Social Psychology”.

Heterogeneous teams includes a mixture of races, genders, cultures and ages that provides a wider range of life experiences and opinions. Studies in education, psychology, sociology, and business reach conflicting conclusions about whether homogeneous or heterogeneous team composition provides stronger results, which is unsurprising given the vast number of studies and variables to discuss:

Benefits: create a stronger dynamic within a group. Individuals can be “experts” in roles such as leader, innovator, communicator and peacekeeper.

Risks: difficult to communicate or understand others’ ideas and information. Having a minority of any sort, whether it is a particular gender, race or age group, can lead to feelings of isolation and so loss of confidence or status within the group.

Considerations:

The suitability of homogenizing groups depends very much on the purpose of the team. A team intended to promote cutting edge developments will benefit from grouping high intelligence individuals, but it would also benefit from a mix of cultures and life experiences. Having methodologies for communication and working processes in place early on in the team’s formation can mitigate many problems in both homogeneous or heterogeneous teams.

Hire above your grade, never below. Who will be in business and share the work with you? Who will give the absolute best of them and link to your strategy/goal? However, there are also the challenges such as defining the job properly, putting enough time into the recruiting process and taking enough time to end the hiring process (Ex: 90-day probation period.)

Sources:

Chapter 4, The Founder’s Dilemmas – By Noam Wassweman

Chapter 1, How to Hire A-Players; Starting Your Business: Avoiding the “Me Incorporated” Syndrome – By Eric Herrenkohl

The Academy of Management Journal.

Cognitive Effects of Racial Diversity” published in “Journal of Experimental Social Psychology”

YouTube Videos: Harvard I-lab Startup Secrets: Hiring and Team – https://youtu.be/vts7vU0rOvQ

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11 thoughts on “Week 4: Discuss “The Benefits And Risks Of Homogenous Teams” & “The Role Of Founders In Building Teams”

  1. Reading your description about a homogeneous team reminded me of an old psychology textbook I read about the failed Bay of Pigs invasion in 1961. Basically JFK had a group of people to map out a strategy to take back the island from Fidel Castro. The strategy had a lot of wishful thinking and was held up as a great example in groupthink. Even the people that had doubts about the invasion plan went along with it and minimized their own concerns. That is probably a scenario familiar to a lot of people!

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  2. Hi Mary,
    It seems clear that if a start up wants to start off of on the right foot they need to be diverse from the beginning. The key as you mentioned is communication which can be challenging with diverse or homogeneous groups. I wonder how many founders prefer a homogeneous group because that is what they are used to and getting out of their comfort zone is a challenge?
    Cece

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  3. Nice overall summary of the topic. I would love to read about some of your personal experiences working in different homogeneous or heterogeneous environments.

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  4. Nice overall summary of the topic. I would love to read more about your personal experience working in homogeneous or heterogeneous environments.

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  5. Hi Mary,

    Very nice post. Before I learned about teams in these classes, I always thought that the conventional wisdom of hiring your best friends would be the way to go when trying to find employees or people to found a company with. But in reality, often times this close circle of friends may not be as diverse as we should have it. Maybe we enjoy doing the same things as our friends, come from the same background, even growing up together on the same street. While this has obvious advantages (as you explained), it just might not be the best mix and really runs the possibility of leaving out valuable personal or social capital.

    Excellent article.

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  6. Mary,

    I like the idea in your benefits of the heterogeneous situation where people are experts in their role and own the strengths of what they are bringing to the table, being the only one of each role. I think it is key to find A-players that can also get along with everyone as well as offer their ideas and strengths, in either homogeneous or heterogeneous situations. Great post!

    Thanks,

    Mackensie

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  7. Mary,

    Nice post. I agree with you, human capital is so important to any business. As we think about forming teams, this is where I feel the entrepreneur really plays a key role. I think we all understand the importance of diversity in team not only in race and ethnic group but in skill level and expertise. The entrepreneur as leader can work to make this team shine if he/she has the right skill. If not this person may find diverse teams difficult to work with and will not be able to successfully build the team’s capacity. When this happens, it’s very disappointing to see. I have been a witness to such situations.

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