Diversity as a Driver For Innovation

Yes, it actually does matter

Photo by Alex Holyoake on Unsplash

It’s 2019 and people still treat diversity building in their organization as a checking-the-box exercise. If you are still applying the Rooney Rule or saying things like “we need to fill our quota,” you’re getting it all wrong.

What do I mean by diversity? I’m not just talking about the obvious gender and ethnic diversity, I’m also referring to diversity of thought that is born out of having different experiences: education, work experiences and life experiences.

The data is compounding showing that diversity yields better performance and better innovation. From the board level to workforce composition, the yields are higher and challenging thought yields higher performance and more novel outputs.

Why does diversity yield better results?

It’s not always what you think. We sometimes believe that if we introduce one person who is different into a group, that they will change the outcomes by simply coming up with something novel, but it’s often attributable to that person’s ability to change the whole dynamic of the group and thus co-create something that would not have been possible otherwise.

In a 2016 HBR article on this topic, they conclude that people from diverse backgrounds have the ability to alter the behavior of a group’s social majority and thus drive more accurate group thinking. They cite a study published in the Journal of Personality and Social Psychology, in which they created six-person jury panels out of 200 people and split them into either homogeneous groups (control) or diverse ones. The diverse panels were able to raise more facts on the cases they were reviewing and avoid more factual errors than their control panel peers. A similar study around pricing stocks, saw groups that had a combination of financially literate and literate people more able to accurately predict prices.

Radical innovation can also be improved through the outputs of diverse teams. In a 2017 paper on diversity and innovation (Ali Mohammadi, Anders Broström, Chiara Franzoni), scientists examined the correlation between radical innovation (new products) and the composition of the team. They examined diversity by international descent and educational background. The results showed that greater ethnic and educational diversity yielded superior performance in radical innovation. Specifically, an increase in educational diversity by one standard deviation resulted in an increase in innovative throughput by 5%. Ethnic diversity’s ratio was 1:1.3%.

I can attest that in my own experience as a product designer and product manager that the best outputs came when we created “war room” teams taken from a cross-section of disciplines and backgrounds to come up with whitespace innovation. The freedom, space, separation from existing processes helped, but without the diversity of thought and freedom to challenge each other, we could not have created the new products that we did. Today, I see this also in the teams that I invest in and the different ways that our startups can challenge each other in the cohort spaces we’ve created.

Creating the change –don’t just hire for diversity, build an inclusive culture

Regardless of if your a large corporation or startup, it’s never too early or too late to start thinking about building for diversity. Instead of looking to check boxes, we should be vigilant about culture by observing how meetings are conducted, noting who is included and excluded, and listening to conversations where decisions are being made to determine whether status quo ideas and proposals are being challenged.

Hiring is certainly important as that is the top of the funnel that determines whether you can bring in the right talent but of much greater concern should be placed on fixing the leaky bucket and creating a place where people want to work and feel their contributions matter. Sustaining diversity is always a greater precedent than simply hiring a few and checking boxes. For those that feel they need help on the top-funnel issue, I highly recommend you read this article: Tips for Hiring Women in Tech From a Female CEO Who Had Trouble Hiring Women in Tech. This specific case study is about hiring women, but can be extended to other forms of diversity.

Another thing to do in making this change is to embrace the discomfort and the challenge. If you are starting from a non-diverse place, these changes may not be easy and it takes work so commit to making it happen with the aforementioned benefits in mind. Remember, change is not easy and this one requires you to force yourself to seek out, relate to and work with those that may think differently from you – things we don’t usually aim to do in our day-to-day. Finally, take these steps incrementally, you can start with one team and slowly build up overtime. Be conscious about the culture your creating and try to highlight to everyone the benefits that are coming to fruition with each team you expand.

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