How Changing Team Members In Startups Affects Innovation

Recent research conducted by University College Dublin indicates that the composition of a new venture’s team plays a crucial role in determining its capacity for innovation, a key factor in enabling nascent organizations to gain a foothold in the market and contend with established firms.

The study reveals that the simple act of introducing membership changes in the team tends to enhance the likelihood of innovation, even after considering the types of experience gained or lost during these transitions. Additionally, while the departure of an experienced founding team member might initially appear detrimental, the potential for creative recombination that accompanies such turnover ultimately exerts a net positive influence on the venture’s innovative potential.

New connections

“When these episodes take place, it can inspire the venture to make new connections between information they already have and the current situation the firm finds itself in,” the researchers explain. “That seems to lead to increased innovative outcomes—and that finding was very robust.”

The researchers delved into the dynamics of 440 new ventures over an eight-year period, meticulously tracking the movements of team members. Surprisingly, when a company experiences stability with its founding members, it gains valuable insights from their experience. However, in the event of departures among these individuals, an unexpected positive outcome emerges: the venture can leverage the team’s shifting composition to foster creativity and drive innovation.

This occurrence presents what the researchers term “reflective episodes,” a phase during which companies can carefully assess the existing competencies within their teams and explore how these capabilities can be effectively integrated and synergized.

Enhancing innovation

The study outlines three key ways through which new ventures experiencing member changes (including additions, departures, and turnover within the founding team) can enhance innovation. Firstly, by incorporating new team members with relevant experiences, they can introduce fresh perspectives and expertise.

Secondly, during times of membership transitions, the opportunity arises for the company to pause and thoughtfully reflect on its team processes, maximizing potential benefits. Lastly, the study suggests implementing strategies to mitigate the disruptive effects of change; the smoother the transitions are managed through best practices, the greater the potential for favorable outcomes.

Notably, this research reveals that companies need not wait for turnovers to experience the advantages of a reflective episode. By proactively embracing and leveraging changes within the team, businesses can create an environment that nurtures innovation and drives success.

“You don’t necessarily have to go through a traumatic experience where you’re losing half your team or gaining two more people to do that,” the authors conclude. “You might be able to do gain these benefits on a smaller scale by having retreats or perhaps getting rotations where you’re shuffling the composition of the team to get that fresh perspective.”

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