Warning: This blog entry reveals a bit of cynicism.
I would like to believe that the boards of major corporations actually understand the value of a diverse workforce, including at the executive level. Varied experience and viewpoints can provide perspective and insights to generate exciting strategies or solve complex challenges.
If the leadership of General Motors and IBM truly valued diversity, would Mary Barra and Ginni Rometty be their first female CEOs? Really?
These women are bright, accomplished, highly skilled, and deserve to be CEOs.
But, look at the timing.
Barra became CEO as General Motors while dealing with the largest vehicle recall ever (29 million so far, according to FORTUNE magazine). They declared bankruptcy and needed a government bailout not that long ago. And the intractable “GM culture” poses a significant challenge for any CEO.
Rometty is CEO of IBM as revenue has been declining (-5% to $99.8 Billion in 2013) and the media keeps asking “Can IBM Ever be COOL Again?”
What is the logic? When a fairly homogenous group of corporate leaders find themselves in a terrible situation, do they think Well, maybe it’s time to give a minority or a female executive a “chance.” Why not? If the executive fails to pull the corporation out of the mess, some bigoted people would have their biases confirmed. After all, they weren’t expecting success anyway. And if/when the female (or minority) executive succeeds despite the huge odds against her, she probably won’t be compensated higher for that incredible accomplishment. She could also become so tired after pulling a huge corporation into the future, she may just retire.
And then, who will the rescued corporation bring in as her successor? Usually, the corporations revert back to homogeneity. Look at the composition of corporate boards!
This reminds me of observations my late husband had about governmental entities with which he worked. Leaders of states, counties or municipalities would repeatedly find themselves in “messes.’ Then they would scratch their heads and say, “You know what?! We need to bring in a community planner.” If they had actually understood and valued planning, wouldn’t the professional planner have been brought in long ago? And the “big mess” would have been prevented.
Be honest with yourself. Look at the composition of your executive team and your board. And look at the timing of when you “give a woman or a minority a chance.” Are you really setting people up to fail or serve as scapegoats for problems that resulted from homogeneity? (Similar people with similar thinking using similar approaches)
Each week, my email inbox includes several inquiries from entrepreneurs who are looking for startup or growth financing for their businesses.
Typically, the first email is polite and conveys a sense of excitement about his/her product innovation. Most of the emails include a request for a referral to appropriate funding sources.
Some information to provide CONTEXT: The Service Industry Fund that I founded in the mid ‘90s has invested over $1 Bil in scalable service firms. When a business plan comes in that doesn’t fit that FUND, our intermediaries can “shop” for funding from other sources. Plus, since one of the primary challenges to sustained growth is funding, my 35 year old growth strategy firm has helped hundreds of our midsized privately-held consulting clients to obtain appropriate growth financing.
So when I receive a financing inquiry, I provide tailored responses based on the information provided in the initial email ….and then frankly, we brace ourselves for the replies. Last week, I forwarded an email inquiry directly to a past client who is poised to invest several million dollars in the right deal. In the same email I asked the entrepreneur if he had contacted the Technology Council in his state because several have well financed startup funds or angel networks. His product concept would go over very well at NJTC’s JUMP START. You would have thought I called his mother a whore.
It is amazing how many times entrepreneurs will:
- Immediately dismiss a suggestion (no matter what it is, by the way). That behavior is insulting to the resource person who has generously taken the time to read, think and offer advice (for free)… and is a disincentive for any future interaction…let alone funding!
- Provide a detailed history of their past accomplishments that has an arrogant or defensive tone. Many entrepreneurs are quick to feel insulted, misunderstood or unappreciated. Hello! It’s an email inquiry and response between people who do not know one another. Plus, funding is about the enterprise, the potential to make money, market need or demand, etc. Investors don’t fund the entrepreneur’s ego.
- Not express gratitude for the prompt response or informed suggestion. Most intermediaries and funding sources do not respond quickly or provide tangible suggestions…partly because so many entrepreneurs aren’t polite, act entitled, or think they can demand attention.
- Make grandiose claims that their concept is “the next Google”… “bigger than APPLE”… Huge claims like that backfire on entrepreneurs. Real funding sources involve industry experts during their due diligence and will make their own decisions about the significance of the innovation.
- Declare that their unproven concept deserves millions of dollars of outside financing. These entrepreneurs are often the same people who think they can refuse the addition of investors to their board(s) and haven’t invested huge sums of their own money in the concept.
I wonder how many innovative products are not adequately funded because the arrogance of the entrepreneur gets in the way. You can tell a great deal from the second email how a funding search is probably going to turn out.