Building Stronger SME Teams: How to Leverage Diversity for Better Business Results
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In today's competitive business landscape, SMEs face unique challenges in attracting and retaining top talent. One key advantage SMEs can leverage is building diverse teams that foster innovation, resilience, and enhanced problem-solving capabilities. Here are practical strategies SMEs can implement to assemble high-performing, diverse teams.
Why Diversity Matters for SMEs
Diverse teams consistently outperform homogeneous ones, bringing varied perspectives, creative solutions, and improved decision-making. SMEs benefit substantially from diversity, as it allows them to innovate faster, respond better to market changes, and attract a broader customer base.
Practical Tips for Building a Diverse Team
1. Expand Your Recruitment Channels
Relying solely on traditional recruitment channels limits your access to diverse talent. Expand outreach through:
- Specialized Job Portals: Utilize platforms dedicated to diverse hiring, such as Jopwell, DiversityJobs, or RemoteWoman.
- Community Partnerships: Collaborate with local community organizations, professional associations, and educational institutions to reach underrepresented groups.
2. Craft Inclusive Job Descriptions
Inclusive language in job postings helps attract a diverse applicant pool.
- Use clear, accessible language and focus on essential qualifications rather than exhaustive requirements.
- Express a genuine commitment to fostering an inclusive and equitable workplace.
- Consider using tools like Textio to identify and eliminate potentially biased phrasing.
3. Adopt Structured and Bias-Free Interviewing Processes
Implement structured interviews to standardize questions and evaluation criteria across candidates, reducing unconscious bias.
- Ensure diverse representation among interview panels.
- Focus on competency-based assessments rather than subjective opinions.
4. Prioritize Inclusive Workplace Culture
Building diversity is only effective when paired with genuine inclusivity:
- Establish mentorship and sponsorship programs.
- Conduct regular diversity and unconscious bias training sessions.
- Foster open dialogue and feedback channels to address concerns proactively.
5. Use Flexible Working Models
Flexible work arrangements make your workplace accessible to individuals from diverse backgrounds, including caregivers, individuals with disabilities, and those from different geographic locations.
Real-World SME Case Studies
1. Avtar Group (India):
Avtar Group, founded in 2000 in Chennai, India, is a human resources consulting firm specializing in promoting workplace diversity, equity, and inclusion, with a particular focus on creating second career opportunities for women. They launched a job portal (myAvtar.com) as India’s first diversity job portal, which caters to women, LGBTQ+ individuals, person with disabilities (PWD), veterans, and seniors.[1]The portal hosts job fairs, upskilling programs, and events for underrepresented groups. Within the company’s first year of operation, they hosted three job fairs exclusively for women, which attracted over 6,000 registrations, over 50 employers with 1,000 interviews set and over 500 shortlists.[2] Avtar has influenced corporate inclusion policies and increased workforce participation for women in Tier I-III cities in India.
2. Findings from Reports and Studies:
- How Diverse Leadership Teams Boost Innovation (Boston Consulting Group, 2018): a study which surveyed over 1,700 companies across eight countries found that companies with above-average diversity in management teams reported 45% of total revenue from innovation (new products/services), while companies with below-average diversity reported 26%.[3]
- Diversity Matters Even More (McKinsey, 2023): a study of global companies revealed that firms in the top quartile for both gender and ethnic diversity in executive teams are 9% more likely to outperform peers financially. The study also found that companies with top-quartile gender diversity on boards are 27% more likely to outperform financially than those in the bottom quartile. For ethnic diversity, top-quartile firms 13% more likely to outperform.[4]
Measuring Success
Continually assess the effectiveness of your diversity initiatives:
- Regularly track diversity metrics across your workforce.
- Conduct anonymous employee surveys to evaluate inclusivity.
- Refine your approach by analyzing insights gathered from feedback and performance outcomes.
Building diverse teams provides SMEs with essential tools for sustained innovation, effective decision-making, and a robust competitive edge. By proactively implementing inclusive hiring practices, fostering welcoming workplace cultures, and continually evaluating their diversity initiatives, SMEs can build stronger teams that drive sustained business success.
[1] https://www.myavtar.com/services/diversity-hiring
[2] https://hr.siliconindia.com/vendor/myavtar-refurbishing-the-comprehensiveness-of-the-indian-recruitment-industry-cid-18481.html#google_vignette
[3] https://www.bcg.com/publications/2018/how-diverse-leadership-teams-boost-innovation
[4] https://nsga.org/wp-content/uploads/2024/02/McKinsey-Diversity-Report-December-2023.pdf
In recent years, FC Barcelona has become a cautionary tale for organizations that pursue ambitious growth without strategic financial alignment. Once a benchmark for both sporting and commercial success, the club is now burdened by over €1.4 billion in debt as of 2023 and operating under a strict La Liga spending cap. Additionally, the club must reduce its wage bill by over €130 million just to meet league rules for registering new players. The Growth Obsession Barcelona aggressively pursued growth through international fan engagement, brand extensions, and record-breaking player acquisitions. This included massive spending on players such as Robert Lewandowski, Jules Koundé, and Raphinha, contributing to the club's total player acquisition cost of over €160 million in a single window. But this expansion came with soaring wage bills and mounting liabilities. The club's misalignment between growth planning and financial forecasting was a critical error. While revenue-generating arms like merchandising and global sponsorships flourished, they could not keep pace with an unsustainable cost base driven largely by player salaries and amortized transfer fees. Financial Engineering with Short-Term Vision To balance its books temporarily, the club sold future media rights and pursued aggressive financial instruments. In 2022, for example, Barcelona sold 25% of its La Liga TV rights for 25 years for approximately €667 million, bringing in immediate liquidity but sacrificing long-term earnings. For SMEs, this is akin to trading future revenue for present solvency, a move that can be viable only with careful scenario planning and value recovery strategies. Misjudging Risk in Strategic Planning Strategic growth is not just about identifying opportunity; it's about anticipating risk. Barcelona's assumption that continued Champions League performance and global expansion would underwrite its expenses proved overly optimistic. When performance faltered and stadium renovations disrupted match-day revenues, the financial buffer collapsed. Key Takeaways for SMEs Link Strategy to Cash Flow : Ambitious growth plans must be anchored in realistic cash flow projections. Avoid Short-Term Fixes with Long-Term Costs : Monetizing future assets can create liquidity but may harm valuation and flexibility. Stress-Test Your Plans : Build downside scenarios into your strategic planning. What happens if key revenue assumptions don’t materialize? Watch for Structural Overheads : Ensure that fixed costs scale responsibly with revenue. Barcelona's story is a masterclass in the risks of misaligned growth and financing. For SMEs navigating cross-border expansion, acquisitions, or new product development, the message is clear: growth without financial discipline is not just risky, it can be fatal. Sources : https://www.espn.com.sg/soccer/story/_/id/37630027/barcelona-sell-further-15-percent-tv-rights-investment-firm-sixth-street https://www.espn.com/soccer/story/_/id/44708566/uefa-champions-league-stats-barcelona-winning-streak-ends-mbappe-drought-saka-chases-henry-arsenal https://www.nytimes.com/athletic/6399278/2025/06/05/barcelona-transfer-window-finances/ https://www.espn.com.sg/soccer/story/_/id/39956504/barcelona-finances-laporta-laliga-palanca-assets-transfers https://www.bloomberg.com/news/articles/2025-05-23/fc-barcelona-seeks-debt-amendment-to-gain-time-to-finish-stadium https://www.espn.co.uk/football/story/_/id/39562707/more-money-woes-barcelona-laliga-slashes-spending-limit
When markets run hot, the temptation to chase concentrated equity bets is strong. But smart business leaders know better. It’s not just about outperformance — it’s about resilience. And that’s where strategic diversification wins. Diversification: A Growth Strategy in Disguise True diversification isn’t about owning a bit of everything. It’s about building intentional exposure across asset classes, geographies, and liquidity profiles — to smooth volatility, protect capital, and unlock optionality. For entrepreneurs, the stakes are even higher. Your business is already a concentrated asset. Your portfolio shouldn’t be. What Are You Really Optimizing For? In bull markets, single-stock investors might outperform a 60/40. But when the cycle turns — and it always does — diversified portfolios recover faster and draw down less. Historical data shows traditional balanced portfolios delivering ~6.5–7% annualized returns with lower standard deviation. During the 2008 crisis and 2020 pandemic, they protected capital and provided liquidity when it mattered most. That’s not just performance — that’s staying power. Layered Diversification: What Smart Capital Looks Like Asset Class Diversification: Modern portfolios benefit from exposure across equity markets (including domestic large-cap, international, and emerging markets), fixed income instruments (government bonds, investment-grade corporate debt, and alternative credit strategies), and real assets that provide inflation protection and portfolio stability. Geographic and Currency Exposure: International diversification helps mitigate domestic economic risks while potentially capturing growth in developing markets. For businesses with international operations or aspirations, currency diversification can also provide natural hedging benefits. Alternative Investments: Real estate investment trusts (REITs), private credit, and carefully selected alternative investments can enhance returns while providing portfolio diversification benefits not available through traditional public markets. Business-Level Diversification: The diversification principle applies equally to business operations. Revenue concentration across customer segments, geographic markets, and product lines creates similar risks to investment concentration. The most resilient businesses and investment portfolios both embrace strategic diversification. Avoiding the Extremes Over-diversify, and you dilute conviction. Under-diversify, and you amplify risk. The sweet spot is intentional allocation — grounded in your business stage, risk appetite, and time horizon. A founder nearing exit will think differently from one entering a growth phase. Your portfolio should reflect that. The Case for Patient Capital Diversification enables one of the most underrated advantages in wealth creation: the ability to stay invested. It’s what keeps you from panic-selling at the bottom. It’s what gives you the freedom to think long-term — in your business, and in your portfolio. Bottom Line: Resilience Is the Real Alpha Smart diversification isn’t about being safe — it’s about being ready. Ready to withstand shocks. Ready to pivot. Ready to seize opportunities when others are sidelined. Our team combines strategic growth planning with financial analysis to help businesses build resilient capital structures. From structured financing transactions to comprehensive market research, we develop tailored solutions that align your investment strategy with your growth ambitions. Contact us to explore how strategic diversification can strengthen your financial foundation while supporting your business objectives.
In 2023, startups with all-female founding teams received just 2% of total venture capital funding globally, despite clear evidence that female-led companies often outperform their male-led counterparts in key business metrics. [1] The gender gap in startup financing isn't just a diversity issue, it's a business inefficiency. For Small and Medium-sized Enterprises (SMEs), especially those led by women, understanding the dynamics behind this disparity is key to building resilience and driving change. The Funding Disparity: Despite increasing attention to gender equity, female founders continue to face significant funding hurdles. Compared to all-male teams, women-led businesses: Receive significantly less funding at both early and growth stages. Are more likely to be asked risk-averse questions by investors. [2] Often lack access to the same financial networks and mentorship channels. Studies show that female founders are more likely to bootstrap their businesses or rely on personal savings. These barriers slow growth and limit access to essential resources. The Business Case for Investing in Women The underfunding of female founders isn’t just unjust, it’s economically shortsighted: Startups founded and co-founded by women generate 10% more cumulative revenue over five years. [3] Women-led companies deliver higher returns per dollar invested (78 cents of revenue per dollar invested, as opposed to just 31 cents for those led by men). Diverse leadership teams drive innovation and are better aligned with today’s diverse consumer base. In other words, backing female founders is a sound business strategy with proven returns. Real-World Examples of Female Founders Breaking Barriers Whitney Wolfe Herd – Bumble (USA) After leaving Tinder, Wolfe Herd launched Bumble with a mission to put women first in the dating world. She took the company public in 2021, becoming the youngest self-made female billionaire in the U.S. at the time of Bumble’s IPO. [4] Anne Boden – Starling Bank (UK) Founder of Starling Bank, Anne Boden built one of the UK’s top digital challenger banks. While facing resistance from traditional investors early on, she scaled the company to over three million customer accounts and profitability by 2022. [5] Melanie Perkins – Canva (Australia) Melanie Perkins co-founded Canva after facing multiple rejections from investors early in her entrepreneurial journey. She grew it from a bootstrapped startup into a global design leader. Today, Canva is valued at over $40 billion and is celebrated for its inclusive leadership, with gender balance embedded across the executive team [6] What Female Founders Can Do While structural barriers persist, female founders can proactively increase their chances of success: Tap into Women-Focused Funds : Explore platforms like All Raise, Female Founders Fund, and Coralus (formerly known as SheEO) that prioritize gender-diverse investments. Perfect Your Pitch : Tailor pitch decks with strong financials and growth metrics. Anticipate investor concerns and respond with data. Seek Alternative Funding : Consider grants, crowdfunding, and non-dilutive options like revenue-based financing. Build Advisory Networks : Connect with mentors and advisors who understand the fundraising landscape and can open doors. At Creativa, we are focused on technical market research, strategic planning, and capital advisory; and can help bridge the knowledge and access gap female founders often face. Rethinking Capital, Rewriting the Norm The gender funding gap won’t close overnight, but we can accelerate progress with intentional action. Supporting women-led businesses isn’t just about fairness, it’s about unlocking untapped innovation and value. As financial advisors to growing companies, we encourage female founders to reach out for support on funding strategy, growth planning, and financial analysis. The future is diverse, and it’s already underway. Sources: [1] https://www.weforum.org/stories/2024/03/women-startups-vc-funding/ [2] https://www.cems.org/news-events/news/investigating-gender-gap-early-stage-funding [3] https://web-assets.bcg.com/img-src/BCG-Why-Women-Owned-Startups-Are-a-Better-Bet-May-2018-NL_tcm9-193585.pdf [4] https://www.forbes.com/profile/whitney-wolfe-herd/ [5] https://www.mckinsey.com/industries/financial-services/our-insights/the-journey-of-building-a-neobank-from-the-ground-up [6] https://fortune.com/longform/melanie-perkins-canva-founder-ceo-interview/