Beyond The Bushes: How Diversity Builds Value

When I was a small girl looking at a vast ocean, I asked my father how he had spotted a tiny boat. “Just let your eye scan the horizon above the water, slowly moving from one side to the other,” he replied. “That way your peripheral vision will notice anything unusual.” That was the first time I realized I HAD peripheral vision, but it worked, and I remember this whenever I’m taking in a really big view.

Similarly, when I was trying to spot game in dense bush on an African safari and failing miserably, I asked our guide for a tip. “Look at the space behind the bushes, that’s where the animals are hiding.” This was logical but it took some practice to get the hang of it. With time, I learned to train my eyes to focus on the deeper distance, not the closest branches, then my mind could put together at least a partial vision of what I could see in the spaces between the branches and behind the bushes. My effort was rewarded when I was the first to spot a majestic greater kudu male though he was standing perfectly still behind some brush.

It is common for investors to look for startup founders who are “laser focused” on their goal and a strategic path to reach it. This singularity of focus does have value, of course, but so does having a team with diverse perspectives. If everyone focuses on the big picture, who will notice the details that may tip their boat? If no one is watching for novel competitive innovations arising out of the bushes, how will leaders know to change their strategy before disaster strikes?

Back in the days when computers started connecting to the internet, employers were frantic about losing control over the time their employees might “waste.” Steve Jobs stood out from the crowd by telling his employees to take some time daily just to browse the internet. That’s like scanning the horizon, right?

About that time, I sat in on a luncheon keynote address that an investment bank had hired Jobs to give. His audience was a room full of oil company executives and his message was about the value of a wider perspective. It went something like this, when Henry Ford started building the model T, the US already had a nationwide railroad system. If railroad companies had influenced Ford to design his vehicles to fit their existing railways, then Americans could have saved billions spent on new roads, and railroads might still be our nations’ top transport industry. The problem was that railroad industry executives did not think of themselves as being in the transportation business, they were, “Railroad Men.”

This hit home with me. As an advisor to oil company executives, I knew they did not think of themselves as being in the business of energy production or natural resource discovery, they thought of themselves as “oil men” who were in the “O’l Bidness.” At that point, they were all complaining about how consumers were happily paying more for water than for oil, which was exponentially more complex to recover. Water wells were being measured in feet, while oil wells were hitting the one mile mark. They had thought it a was just a joke when I suggested they add water to their product line.

Since I was among America’s first female stockbrokers, who were formerly called “Customer’s Men,” I’ve often been asked to speak about diversity in the workplace. Too often the goals of those sessions involved criticism and finger pointing. So, I was thrilled with a more recent panel I served on because, despite the female organizer’s bias toward a controversial storyline, every female panelist took a less biased and more inspirational stance. The successful Eastern European entrepreneur told of how her village back home had supported her aspirations in her early days. Then the researcher explained the reasons that data is showing that the more female and culturally diverse decision makers on a board, the less risk and the higher the valuations. Because they see strategies from a different perspective, diverse management teams are better prepared before they take products to market or make employment decisions, avoiding more expensive pivots at later stages of development. Also, once decision making bodies adapt to knowing they will be challenged, they learn to research strategic decisions more carefully. It seems that, the perfect storm for disaster occurs when everyone looks, acts, and thinks alike, thanks to identical backgrounds.

Recently, I stopped on a road that appeared impassible, thanks to work vehicles that lined the sides and a truck that had parked in the middle. The truck had no driver, so I prepared for a wait. But then a worker crossing the road signaled me to proceed. I hesitated, then, with more encouragement, moved ahead. As I moved forward, I gained added perspective, and could see that the truck was far enough away from the vehicles parked on the side to permit me to veer to one side and pass easily. This illustrated to me the value of perspective. Sometimes we just need to keep going before we see a clear path forward.

From its earliest days of founding LoftyInc in 2010, our team has been mindful of the advantages that come with diverse leadership. Our founder team is diverse in career expertise, age, gender, ethnicity, politics, and religion. This awareness has influenced our decisions as we have built out our company and our funds. During the due diligence phase of investing, for instance, we look for this diversity among founding teams, knowing the headwinds that successful ventures will need to overcome.

The best decision makers are rarely “fearless” about the risks inherent in their decisions, but they are more confident after considering diverse perspectives. Positive outcomes build not only confident leaders, but they also build strong track records, which attract more talent and the resources to grow.

This is how diversity builds value.

By Marsha Wulff

July 2023

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