Sunday, September 7, 2014

Workforce Diversity Inspires Innovation

Workforce diversity is said to inspire the drive for innovation, and studies have been undertaken to show how and why this is so.

A research undertaken last year provided compelling evidence that diversity unlocks innovation and drives market growth—a finding that should intensify efforts to ensure that executive ranks both embody and embrace the power of differences.

The aforementioned study analyzed two kinds of diversity: inherent and acquired. Inherent diversity is that which involves traits you are born with, such as gender, ethnicity, and sexual orientation. Acquired
diversity is that which involves traits you gain from experience: Working in another country can help you appreciate cultural differences, for example, while selling to female consumers can give you gender smarts.

The team of researchers considered companies whose leaders exhibit at least three inherent and three acquired diversity traits as having two-dimensional diversity, according to the article on Harvard Business Review.

Their findings?  
By correlating diversity in leadership with market outcomes as reported by respondents, we learned that companies with 2-D diversity out-innovate and out-perform others. Employees at these companies are 45% likelier to report that their firm’s market share grew over the previous year and 70% likelier to report that the firm captured a new market.

The important elements of 2-D diversity, as the researchers point out, are what many diversity companies have already observed to be the driving force behind innovation: a diversity of thought, a diverse workforce that includes minorities large enough to form critical mass, and leadership that values differences.

A much earlier study, Global Diversity and Inclusion: Fostering Innovation Through a Diverse Workforce, by Forbes Insight, presents key findings, some of which are:
  • Diversity is a a key driver of innovation and is a critical component of being successful on a global scale.
  • A diverse and inclusive workforce is crucial for companies that want to attract and retain top talent.
  • Responsibility for the success of company's diversity/inclusion efforts lies with senior management.
  • Significant progress has been made to build and retain diverse workforces, but there are still some impediments to companies' efforts.

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