Diversity in Startups

On Wednesday, February 19th, ARYZE hosted an event on Diversity in Startups. Our event featured a presentation by Maria Dahl Andersen, followed by a panel with Mette Knak of Google, Plamena Cherneva of WonderCoders and ARYZE’s own CCO Rasmus Bruun. The event explored the difference between identity diversity and cognitive diversity, how diversity is advantageous for companies, and the role of diversity in startups. 

In the late afternoon last Wednesday, Maria Dahl Andersen took the stage to discuss her A+ winning research on diversity in start-ups. A bright, positive and enthusiastic masters student at Aarhus University, Andersen’s presentation showcased the passion she has for her work. She discussed what diversity is, why it is important and how it can be fostered within start-ups.

Connect with Maria Dahl Andersen on LinkedIn here.

According to Andersen, there are two types of diversity: identity diversity and cognitive diversity. Identity diversity refers to largely visible, quantifiable differences, such as ethnicity, age, sex, and physical capabilities. Cognitive diversity refers to the invisible, non-quantifiable differences in our worldview and approach. Dahl defines this as 

“the differences in how we perceive, encode, analyse, organise and interpret the same information and experiences”. 

Importantly, identity diversity facilitates cognitive diversity. Living with different identities gives people different life experiences, different perspectives and different skill sets. When people with cognitive diversity work together, they bring a broader range of perspectives and skill sets to the task, increasing the chance for a creative, efficient and inclusive outcome. For that reason, as Dahl’s research shows, “teams with different kinds of thinkers outperform homogenous groups.” This phenomenon is referred to as a “diversity bonus”, and it is so advantageous that Michael Dupont of Statum says: 

“I believe I’d be taking a risk in NOT having diversity [at Statum]. In larger organisations, they would probably think of diversity as taking a risk.”

Clearly, diversity is important for companies’ bottom lines, but it also facilitates employee happiness. As Andersen says: 

“Diversity can generate social coherence, enhanced socialising, communication, and open-mindedness among co-workers.”

In order to create a diversity bonus within a business, hiring is key. Often, the perceived personableness of potential employees can affect their chances of being hired. However, having likeability as an employment criteria leads to the hiring of people with similar mindsets to those already in the company. Instead, hiring should be qualifications based and take into account different diversity factors.

Read more about facilitating diversity in hiring here.

However, it is not enough for managers to simply hire diverse people. In order to create a diversity bonus, companies should foster inclusivity and employers must purposefully facilitate teamwork among cognitively diverse employees. It is easier for start-ups to integrate diversity initiatives into their company, and to therefore reap the benefits of those initiatives. Seeing diversity measures as a part of CSR, Andersen quoted the Danish Chamber of Commerce: 

“Newly established companies have better opportunities in incorporating CSR from the beginning instead of having to readjust on the way. In that way, they can inspire and pave the way for larger organisations to follow suit.”

Diversity is important for both companies and their employees, but reaping its benefits involves active facilitation on the part of employers. The ability to build a company around diversity will present an advantage for start-ups.

Panelist Mette Knak of Google

Andersen’s presentation was followed by a panel discussion with diversity experts. To read about panelist Mette Knak of Google, please see here and here; for an interesting discussion about diversity, featuring panelists Plamena Cherneva and Rasmus Bruun, please look here. For more discussion on diversity, start-ups and tech, please visit ARYZE’s blog. To see how ARYZE is leveraging financial and tech developments to solve the SDG 9, 10 and 16, please visit our website.

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