Establishing Diversity in Mastermind Groups
Having diversity in your mastermind business group gives your clients an edge in the marketplace, a true competitive advantage. It then becomes your job to carefully and intentionally select members for your group that represent different perspectives in gender, age, and race. But what are the science and the art behind diversity in peer groups and why is it so important?
Diversity in Mastermind Groups
I trust you have read the numerous articles written about corporate America and the benefit of having diverse boards of directors. For example, Diversity Matters, an often-cited 2015 McKinsey & Co. report, claims that diversity on corporate boards benefits the bottom line. In a study of 366 public companies in Canada, Latin America, the U.S., and the U.K., companies with boards that ranked in the top quartile for racial diversity were 33 percent more likely to outperform those in the bottom quartile. Those in the top quartile for gender diversity were 21 percent more likely to outperform those in the bottom quartile, the report said. A less homogenous board doesn’t necessarily guarantee higher profits, but the McKinsey report noted: “More diverse companies, we believe, are better able to win top talent and improve their customer orientation, employee satisfaction, and decision making, all that leads to a virtuous cycle of increasing returns.”
These articles and statistics have been bombarding the media for a few years now and as a result, new mandates and rules are being enforced by governments and the financial markets. It’s both common sense and logical to understand that diverse boards, diverse leadership, diverse workforce all bring valuable insights, opinions, perspectives on solving problems. Perspectives that can make a good decision, a great decision. Wouldn’t you rather have great decisions vs mediocre decisions?
Everything that has been written addresses public corporations and the benefits. But what is the benefit for privately held companies?
More Benefits of Diversity in a Business Mastermind Group
A diverse peer board can do much more than “check the box or act as a feel-good”. Let’s look at the benefits of diversity in peer-to-peer groups or also called business mastermind groups.
A diverse member will:
expand the knowledge, experience, and insight that go into a company’s decision-making because they have different experiences that shape their viewpoints
create “ah-ha” moments from looking at something from a different lens
create clarity around why a problem exists that keeps surfacing
cover your blind spots that you didn’t know you had
solidify and expand the culture of your business by showing you the benefits of working with people with different backgrounds than you as the leader
help understand and educate your thinking of different genders and ethnic backgrounds
expand your leadership skills beyond your comfort zone through working with people who think differently
A great example of this is when Black Lives Matter was top of mind. Many privately held business leaders did not think they needed to address their teams about what was happening. They thought the issue was more for the “big” corporations, not them. They believed silence was fine and there was no need to bring up the subject unless someone on the team did. They felt there was not a need to articulate the company stance and expectations of how others would be treated or a commitment to a more diverse workforce. They felt if everything seemed fine, then don’t rock the boat with what they perceived would be a political statement. Saying nothing is saying something and is speaking about what you believe and what you value. Silence isn’t silence.
The peer groups with diverse members of race and gender thought otherwise. They did communicate with their employees about the topic; they made a plan for filling the gaps in key positions with diversity and becoming more inclusive. Why? Because their fellow members of different races and gender explained the value in doing so. As a result, their teams had more open discussions, became more vulnerable because they felt safe, had ideas about where opportunities were in the company for diversity, and offered to help and lead initiatives. Overall, increased company engagement, employee retention as well as acquiring talent because they showed they understood a key issue in today’s society.
Women’s Mastermind Groups
Can an all-female peer advisory group be more beneficial for women leaders?
There are pros and cons to women-only business mastermind groups. I have never read anywhere a compelling case as to why there should be a mastermind group of women CEOs only. However, I can think of a few reasons why and a few reasons why not.
Women business leaders can face unique challenges. Challenges such as balancing work and family life if they are particularly a new mother. New mothers likely play more of a role with a newborn than the father depending on if they are breastfeeding, etc. Balancing new motherhood with the pressures of running a business adds to the complexity of managing emotions, perceptions, and new challenges. Challenges that those not mothers might not understand or be able to emphasize.
According to LeanIn and McKinsey & Company’s “2020 Women in the Workplace” report, “the pandemic has intensified challenges that women already faced. Working mothers have always worked a “double shift”—a full day of work, followed by hours spent caring for children and doing household labor. Now the supports that made this possible—including school and childcare—have been upended.” And if a woman is a single parent the “double shift” is greater.
The report also cited, “Senior-level women are nearly twice as likely as women overall to be “Onlys”—the only or one of the only women in the room at work. That comes with its challenges: women who are Onlys are more likely than women who work with other women to feel pressure to work more and experience microaggressions, including needing to provide additional evidence of their competence.” In 2019, women-owned businesses represented 42% of all businesses in the United States. And while these firms are growing rapidly, there is still a significant disparity in size between these firms and others, according to the 2019 State of Women-Owned Businesses Report published by American Express. Women business owners face greater challenges accessing capital, resources, and mentorship – in part because unconscious bias and institutionalized barriers stand in the way of such access.
For women in executive leadership and women business owners, being part of a group of like-minded female leaders who can relate to those challenges may be beneficial to the growth of their careers and their businesses. However, being in a confidential environment with men business owners can give women business owners additional support and insight to conquer these challenges. And particularly to benefit from understanding how to navigate in a world of predominantly men CEOs.
How Do I Create a Diverse Mastermind Group and What Does it Look Like?
The biggest challenge of creating a diverse in-person CEO peer group is the lack of diversity in some geographies. Some areas of the country have clusters of races more than others. For example, the District of Columbia has a higher number of Black CEOs running privately held businesses than Blacksburg, VA per capita. That does not make one area of the country bad or better, it’s just the makeup of that geography. A pool of diverse business owners in those areas beyond white males running a business can be a very small pool. This makes forming a diverse group a big challenge to find the right fit peer. Mainly rural, smaller communities will have this challenge vs larger metropolitan areas.
The second challenge is it’s easy to identify some business owners’ gender and race by their name but not always. When being intentional to build a diverse group, which you will have to be to do so, it can be difficult to find these business owners. Talking to the local chamber of commerce, business organizations, economic development, etc. will help you identify these owners.
Another challenge is there are numerous minority businesses under $1M in revenue. They are typically not a good fit for the traditional CEO mastermind group. They are not past the stage of infancy to be strategic to be in a peer group setting as of yet. This further reduces your pool of candidates.
However, when you are intentionally searching for right-fit diverse candidates, you will find them. What you cannot do is just hope it happens, take the easy route of finding any company that can be a right fit but not adds the diverse factor into the equation. While it makes adding a member to your group harder, in the long run, you are building a stronger mastermind group that has many more benefits than a non-diverse group. You are operating at a higher level and creating a unique experience your members can not replicate on their own. But more importantly, by having a diverse group you are doing right by your members and giving them a true experience of diverse thought, approach, perspective, insight, and learning that will give them a better chance of reaching their vision and mission.
