Small Business Needs More Diversity in Leadership


In a not too distant past, diversity at the leadership level was not as common; nor was it commonly agreed upon beneficial practice. Though still not at desirable levels such practices are more widely discussed and accepted. However, most discussions around diversity tend to be around midsize and larger organizations; supposedly having a “trickle-down effect” if those larger organizations lead by example.

Before going into its necessity for small business, let’s agree on a couple of simple principals for this article:

  • Diversity should almost never come at the expanse of qualification.
  • Diversity is proven to have a positive impact on revenue and profits.

Now that we have established some ground rules, let’s move on to why small business should be the main place where inclusion and diversity takes place.

Why Diversity?

It doesn’t matter what school of thought you prescribe to and it doesn’t matter where you look: small business is the backbone of United States economic growth engine. It equally employs the largest number by leaps and bounds. So one would wonder why we expect large companies to lead the way of having more diverse and inclusive leadership. The answer is: we shouldn’t. We should expect diversity and inclusion to “trickle up” from small businesses not only because of their unparalleled dominance but even more importantly because of their inherent flexibility, nimbility and adaptability.


So, since Small Businesses (SMB) are so dramatically dominant how would or should they go about such diversity and inclusion? Most of the conversations on SMB starts around entrepreneurs and their ability to succeeded in highly competitive markets where the competitions is not static: not only is it likely that they are already either competition with established businesses but also trying to create interruptions, but they also have to wrestle with the traditional challenges of SMB including funding, human resource management, production and quality assurance as well as consumer dynamics.

So when and how do they even have time to attend to “abstract” philosophical concept such ad diversity and inclusion? The answer is: from the get go.

Considering all the mentioned above daily challenges, there is very little time to pivot in ways that allow for integration of additional requirements that may have secondary and tertiary impact on operations in general. So the right time for integrating diversity and inclusion into the overall organizational structure has to be in very early stages of planning the organizational structure and future.

But what if we are talking about an established SMB?

Though a bit more complicated in established setting, it is not only feasible but also practical. In those instances, it is a matter of prioritization: considering that human capital management is one of the most important challenges both in terms of planning and impact, it stands to reason that is the perfect point of start for implementing appropriate measures.

Planning & Forethought

It is virtually impossible to have recommendations that apply across the board because of variety of internal factors such as organizational structure as well as external factors such as local governing laws.

However, some of the basics can include considerations of balance in selection, local and regional demographics, organizational culture and makeup. Essentially the gist of it is to include variables that enable both a demographic diversity as well as organizational philosophy.

What does it all add up to?

In spite the fact that we didn’t even examine the positive real impact of diversity and inclusion in terms of tangible such as increased ROI, there is plenty of reasons to except SMB to be in a major “disrupter” in how we include diversity in our leadership hiring: SMB dominates the market and is nimble/flexible to an extend that justifies such pivots.

Let’s encourage diversity and inclusion in SMB so it can encourage the large organizations to follow suite.


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