Importance of diversity and inclusion in startups

Diversity and inclusion are more of a leadership mindset that understands the importance of new ideas and different approaches. It is building a belief system that forms a company culture, impacting everything.

Importance of diversity and inclusion in startups

Thursday October 28, 2021,

5 min Read

What is diversity? A simple definition states it is a practice or quality of involving people from a range of different social and ethnic backgrounds, different genders, and sexual orientations.

It’s about empowering people from diverse backgrounds by respecting and appreciating them for their work without discriminating against them for being themselves.

But diversity and inclusion go hand-in-hand.

What is inclusion? Inclusion simply means embracing every individual, regardless of nationality, gender, sexual orientation, or race. In workplaces, it can mean inculcating a sense of belonging by supporting them.

However, diversity and inclusion aren’t just about race and gender. While talking about, say boardroom representation, it is not about the number of women with a seat at the table, but it is much wider, encompassing all aspects from age, culture, skills, and life experience. It is much more than hitting numbers or ticking boxes.

Diversity and inclusion are more of a leadership mindset that understands the importance of new ideas and different approaches.

It is building a belief system that forms the company culture, impacting everything — from the candidates shortlisted for the job to how conversations and company meetings unfold.

Diversity of mindset

More than statistics, it is the diversity of mindsets that is vital and adds a business value. Even a report by McKinsey has reaffirmed the connection between diversity and company performance.

Diversity Wins by McKinsey surveyed 15 countries and over 1000 large companies to reach a conclusion that the relationship between diversity in executive teams and the likelihood of financial outperformance has strengthened over time.

Diverse team members bring a broad range of knowledge to the table and also open doors for collaboration with diverse audiences, helping the businesses to break into the new markets while growing it.

With diverse teams, businesses have a better reach, resulting in the company’s depth and scope.  

How it is a game-changer for startups?

We have already seen how big businesses are benefitting from diversity and inclusion. Startups can reap the benefits of being diverse and inclusive by attracting a larger talent pool.

One can start with making key processes, such as recruiting, hiring, training, and learning, development inclusive for the diverse talent pool. The businesses grow with a diverse team and inclusive work environment, resulting in growth and success.  

Further, it builds stronger value chains, supply chains, and organisational integration by creating an environment of trust and commitment. Strengthening networks and communities are essential for individual and company growth.

A Boston Consulting Group study has indicated how higher revenue through innovation is possible through diversity. It can be a game-changer if diversity and inclusion become a culture among startups.

What needs to be excluded? Alphas and toxicity!

To weave a fabric of the company that is diverse and inclusive, it is of utmost importance to make the ‘alpha-male culture’ unacceptable. The members in a company who are averse to the idea of open cultures are often the ‘alpha males,’ who believe in dominance more than equality.

In present times, there is no place for alphas when you are seeking innovation from your employees. Out-of-the-box ideas need to be encouraged, proposals made by the contrarians are the lifeblood of innovation.

As a boss or a manager, one should appreciate the unique ideas rather than taking them as a question over your own qualities. That is the whole point of diversity.

We need healthy work environments where there’s no place for biases and prejudices, dogmatic rules or restrictions, especially if it’s a startup.

An open environment, where everyone can be themselves without having to leave a part of themselves outside the office doors, only increases productivity and inspires them to speak their mind without any fear or hesitation.

Great culture brings better employment opportunities

It is natural to feel repulsed if your contribution to the organisation is not taken seriously, and often results in employees leaving the company. It’s often observed people with different backgrounds challenge each other and stimulates creativity along with cultivating healthy competition. Diverse teams form stronger, cohesive teams.

GPTW research on company culture shows that when employees trust that they and their colleagues will be treated fairly regardless of race, gender, sexual orientation, or age, they are 9.8 times more likely to look forward to going to work, 6.3 times more likely to have pride in their work, and 5.4 times more likely to want to stay a long time at their company.

While diversity ensures retention of good talent, it also attracts millennials and Gen Z to work in such a space.

Companies should be able to represent the spectrum of differences in their external branding/marketing as it is more likely to diversify their talent pipelines.

For millennials, diversity is the blending of different backgrounds, experiences, and perspectives within a team, known as cognitive diversity. This new cognitive diversity goes beyond race and gender to validate each individual’s viewpoint.

Even Gen Zs view diversity and inclusion beyond race and gender, they also want acceptance of different points of view.


Diverse and inclusive startups are a win-win for all. They are the need of the hour. However, to make it a part of the company, one has to consider it right from the beginning. Top management or HR need to leave behind their biases and plan diverse and inclusive hiring.

While increasing the number of underrepresented groups is essential to improving diversity in startups, it’s also essential your startup’s structure and workplace support a variety of customs and practices.

Just achieving a specific percentage of different people will not be enough if you are going to confine employees into traditional silos.

Edited by Suman Singh

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)