You’re a founder of a new enterprise and one of your top priorities is social and environmental responsibility. Your management team, however, can’t think of anything but the balance sheet. By year’s end, your bottom line is healthy, but you don’t feel your new enterprise has contributed much to society.
It’s a common dilemma that comes down to a core disconnect that many founders don’t think to look for when pulling together their C-suites. But compatibility surrounding worldview, ethical issues, and dedication to social responsibility can be as important to the success of a business as professional qualifications.
Gustavo Mamão, SF ’11, founder of the Brazilian startup Flourish, which guides entrepreneurs in the creation of mission-driven organizations, has always focused on businesses that demonstrate how a company dedicated to a better world can also be profitable. But it’s an ethic, he says, that the whole management team must get behind. “The extent to which a business embraces sustainability and environmental goals is something that should be decided among founders and investors in the earliest days of the enterprise.”
Surround yourself with like-minded people. Bring in as many different perspectives as you can. Fuel creativity by promoting tensions. It seems that every expert who weighs in on the composition of the perfect management team offers up a different recipe. We polled a number of entrepreneurial gurus and asked them to tell us who should be at your right hand when you’re about to launch a new enterprise.
A diverse mix, says Greentown Labs CEO Emily Reichert, PhD, SF ’12. She says the head of a startup needs to entertain a steady stream of different perspectives. If your management team is diverse, she believes, you’ll have a better chance of generating fresh ideas and solutions. “The strongest teams are those that represent multiple cultural and professional perspectives—technical, managerial, marketing. That way, all facets of your business are being addressed during the decision-making process.”
Jag Gill, SF ’13, founder and CEO of Sundar, a global apparel startup, notes that many investors value CEOs who are outside the industry in which the enterprise operates. Although she had advised clients in the world of apparel and had exposure to the industry, Gill herself had a background in finance before launching Sundar. “One thing that someone from outside the industry brings to the table is an impulse to ask why. They haven’t become comfortable with the status quo, so they don’t just accept things the way they’ve always been. They are always asking, ‘Why do we do things this way?’ That reality check is exactly what a business needs to compete and stay healthy.”
Will the calm, cool, and collected applicant turn out to be a better employee than the person who exhibits stress? Traditionally, companies have tended to think so. In fact, many industries conduct stress tests with current and prospective employees to see how they perform under pressure. Those who remain calm during the simulations are commonly seen as the best fit for stressful on-the-job situations.
MIT Sloan professors Juan Pablo Vielma and Tauhid Zaman and graduate student Carter Mundell beg to differ with the conventional wisdom. By measuring galvanic skin response (GSR) over the course of an increasingly difficult exam, the three researchers came to the conclusion that those who perform best under duress actually exhibit some degree of stress when the stakes are lower.
Lie detector technology predicts success
GSR, which is used in polygraph tests, measures changes in skin resistance owing to sweat—a relatively easy way to measure stress, as the body’s sweat glands are connected to the central nervous system. In their paper “Predicting Performance Under Stressful Conditions Using Galvanic Skin Response” Vielma, Zaman and Mundell note that, in the past, the study of stress has focused on understanding it as opposed to predicting it. “Everyone else was looking at, ‘Why are you stressed now?’ We stumbled on whether they would be stressed in 10 minutes.”