A Liability of Breadth? The Conflicting Influences of Experiential Breadth on Perceptions of Founding Teams

Abstract

Although it is well established that top management team (TMT) experience is highly valued in new ventures, research has largely focused on the value of experience depth. However, founding teams often bring a myriad of different types of experience to their business. Less is understood about how these experiences are perceived by key stakeholders, and prior theory suggests that TMT breadth could be viewed as either an asset or a liability. Drawing from theory on cognitive categorization, we hypothesize that the perceived value of executive breadth depends on the context in which a venture is situated. We argue that the characteristics of the environment shape the degree to which experience breadth is valued, and we show that investors assess breadth positively in opportunistic environments but negatively in threatening environments. Contrary to previous research, we show that breadth can, at times, be viewed as a distinct liability for a new venture. In supplementary analyses, we also show that these effects are not contingent upon the depth of the founding team’s experience. Further, we find that founding team breadth does have significant influences on firm strategy, including the structural positioning of the firm in an industry’s value chain and the cultivation of diverse revenue streams, but that the effect of breadth on investor perceptions is not mediated through these differences in strategy.

Metacritiques of Upper Echelons Theory: Verdicts and Recommendations for Future Research

“…In doing so, many of these studies obtained confirmation from CEOs and their organizations regarding the individuals that should be included in TMTs and boards, ensuring the relevance of their individual input to group-level variables (e.g., Colbert et al, 2014; Friedman, Carmeli, & Tishler, 2016). Further, many of these studies (e.g., Hartnell, Kinicki, Lambert, Fugate, & Corner, 2016; Mannor, Matta, Block, Steinbach, & Davis, 2019; Qian et al, 2013) rely on established methodological approaches from other organizational research areas to defend the appropriateness of the aggregation of group-level variables (see Bliese, 2000; Woehr, Loignon, Schmidt, Loughry, & Ohland, 2015). Thus, while direct measurement of executive characteristics remains challenging, there appears to be growing success in finding study contexts in which such techniques are indeed feasible.…”

Don’t Get It Misconstrued: Executive Construal-Level Shifts and Flexibility in the Upper Echelons

“…In this sense, adaptive expertise is tied to selfregulation, as it requires the metacognitive capabilities that regulate and control information processing in order to address novel situations (Smith, Ford, & Kozlowski, 1997). Different forms of executives' experiences stimulate these benefits by exposing executives to qualitatively distinct cognitive demands and approaches that build their adaptive expertise, such as career variety (Crossland, Zyung, Hiller, & Hambrick, 2014), experience breadth (Mannor, Matta, Block, Steinbach, & Davis, 2017), and foreign work experience (Godart, Maddux, Shipilov, & Galinsky, 2015). Ultimately, we posit that executives develop adaptive expertise from accumulated experiences in which they confront varied cognitive demands, thereby enabling them to recognize the different cognitive approaches to meet those demands (i.e., high and low construals) and to be better skilled in identifying the conditions under which those approaches are best suited.…”

The founder chief executive officer: A review of current insights and directions for future research

“…Although founding team experience is highly valued in startups, most studies focus on the depth of member experience. The breadth of founding team members' experience, however, is noted as an asset in opportunistic environments but can also be a liability in more threatening environments (Mannor, Matta, Block, Steinbach, & Davis, 2019). In all, as also noted at the individual level, human capital is critical at the team level.…”