does diversity drive innovation? - executive … diversity drive innovation? ... deloitte study...
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DOES DIVERSITY DRIVE INNOVATION?
E X E C U T I V EC E N T R A L
In a 2015 global Boston Consulting Group study of 1500 executives, 75% claimed that innovation was one of their company’s top 3 priorities. However 83% said their company’s innovation capability was average or weak.
IS DIVERSITY PART OF THE SOLUTION?There are many opinion papers and studies pointing to a relationship between increased diversity and innovation. But what’s the nature of that relationship, and how does it work? Diversity on its own, without careful management and leadership, can result in negative rather than positive disruption. Roberge & Dick (2010) found that diversity does not automatically lead to better performance. Without ‘diversity intelligent’ inclusive leadership, diverse groups can become polarised and marginalised.
SO HOW DO YOU HARNESS DIVERSITY EFFECTIVELY FOR INNOVATION?The first thing is to understand diversity. Roberge & Dick (2010) distinguish between surface or visible diversity and deep diversity. Visible differences include reasonably obvious things like race/ethnicity, gender, age, and physical disability. (Some may argue that even these characteristics are not necessarily obvious). Deep diversity might include more subtle attributes like personality, attitudes, values and knowledge sets.
Hewlett, Marshall & Sherbin (2013) characterize diversity in a slightly different way, into inherent and acquired diversity. Inherent diversity includes traits you were born with, such as ethnicity and gender, while acquired diversity is about what you gain from experience. They give a couple of examples: working in another country usually gives you cultural intelligence, while experience of selling to females might give you insights into gender.
“Inherent diversity, however, is only half of the equation. Leaders also need acquired diversity to establish a culture in which all employees feel free to contribute ideas.”
- HEWLETT ET AL (2013)
MANAGING DIVERSITY IS COMPLEX AND SIMPLEThe point here is that diversity is more complex than we might think. But it’s also simpler than we think, because in the end the benefit of all varieties of diversity is the multiple perspectives that all these attributes bring to the workplace and to innovation. Diversity of thinking is what it’s all about when we’re talking innovation. A 2015 Deloitte study found that idea generation was a critical factor that set ‘breakthrough’ innovators apart from the rest. And what is essential for idea generation? Diverse thinking and experience.
Diverse work groups will have a broader range of knowledge, skills and viewpoints to bring to the table. Multi-disciplinary teams, for example can make a huge contribution in collaborative solving whole of systems issues like environmental sustainability. A culturally or demographically diverse team brings you closer to your marketplace. A team with a member who shares a client’s ethnicity is 152% more likely to understand that client than a non-diverse team (Hewlett et al 2013).
WHAT’S THE ROLE OF INCLUSIVE LEADERSHIP?The second thing is to develop inclusive leadership. Most companies will have a diversity strategy: understanding how to make it work is the challenge, and making it work starts at the top. Senior managers need to acquire understanding of diversity and their role in driving strategy.
A Forbes (2011) study identified barriers to implementing a diversity and inclusion strategy as being: failure of middle management to execute strategy; budgetary issues; being too focused on survival in the current economy; and a failure to understand the connection between diversity and business drivers. This is about what we shouldn’t do.
For more information on Executive Central Diversity and Innovation Programs contact: Rob Balmer | E: [email protected] M: 61 (0) 425 247156 or Leonie Rothwell | E: [email protected] | M: 61 (0) 439 547 540
E X E C U T I V EC E N T R A L
For more information on Executive Central Diversity and Innovation Programs contact: Rob Balmer | E: [email protected] M: 61 (0) 425 247156 or Leonie Rothwell | E: [email protected] | M: 61 (0) 439 547 540
SO WHAT SHOULD LEADERS DO?Hewlett et al (2013) identified six leadership behaviours to drive innovation through diversity. Leaders need to make sure everyone has a voice and is heard; create a climate of psychological safety so people are willing to share ideas; give team members decision-making authority; share the credit; give useful feedback; and listen to and implement team feedback.
Other success factors include the development of empathy or the ability to take on the perspective of others. This means not just the appearance of taking on board other people’s ideas, but actually integrating them into market strategy where it makes sense to do so.
“Leaders who give diverse voices airtime are nearly twice as likely as others to unleash value-driving insights, and employees in a ‘speak-up’ culture are 3.5 times as likely to contribute their full innovative potential.”
- HEWLETT ET AL (2013)
And finally in managing and leading diverse groups we need to remember all the lessons we’ve learnt about teams in general. These might include the role of positive team communication, shared goals, a collective identity and sense of belonging.
WHAT’S THE PAYOFF IF YOU GET IT RIGHT?No prizes for guessing the answer here: there’s a strong business case for diversity as competitive advantage, with increased innovation, market alignment and growth, and high levels of team performance. And we haven’t even got started on the benefits of diversity in terms of attraction, retention and organisational culture. © 2015, Rob Balmer
READINGBoston Consulting Group (2014) The most innovative companies – 2014. https://www.bcgperspectives.com/content/articles/innovation_growth_digital_economy_innovation_in_2014/
Bourke, J. and Dillon, B. (2015) Fast forward: Leading in a brave new world of diversity. Chartered Accountants ANZ with Deloitte http://www2.deloitte.com/content/dam/Deloitte/nz/Documents/human-capital/deloitte-au-hc-fast-forward-diversity-290515.pdf
Forbes (2011) Fostering innovation through a diverse workforce. Forbes Insights. http://www.forbes.com/forbesinsights/innovation_diversity/
Hewlett, S., Marshall, M., and Sherbin, L. (2013) How diversity can drive innovation. Harvard Business Review. December 2013
Roberge, M. and van Dick, R. (2010) Recognizing the benefits of diversity: When and how does diversity increase group performance? Human Resource Management Review. 20: 295 – 308