The secret to surviving change: diverse teams

Would you like to know how to make your company survive in an uncertain and changing environment? Well, according to a study by Carnegie Mellon, Stanford and INSEAD universities, if your founding team is functionally diverse, you are more likely to survive environmental uncertainties. Now, not everything is rosy, because if your company was founded in a predictable environment, it is better to have a homogeneous founding team, since it will work better in that environment.

The study was conducted with more than 140,000 Stanford University alumni who founded companies between 1960 and 2011, evaluating the length of time the companies survived and whether they achieved positive liquidity events (initial public offering or merger/acquisition). Founders were also asked about the functional roles present in their founding teams (sales and marketing, general management, operations, finance).

Functionally diverse founding teams have members fill a variety of roles and have a broader focus, serving areas such as sales, marketing, manufacturing, and distribution. They also seek and exchange vast amounts of information and discuss a wide range of perspectives because many points of view are represented.

While there are some limitations to the study, such as that the data were collected at one point in time and did not follow the companies at the same time, the findings highlight the importance of companies developing capabilities to allow flexibility in decision-making processes, which are often inflexible. In this way, they will be able to take advantage of the unique opportunities that environmental change brings and ensure that their company survives in the long term. Come on, entrepreneur, take the plunge and move on!