Harnessing the power of diversity and inclusion for innovation

When it comes to the topic of diversity and inclusion (D&I) in the workforce, there is no lack of conversation.

And this is a good thing, because despite the best intentions of many corporations to create a diverse and inclusive workforce, the numbers tell a different story.  As an example, a recent PBS report on diversity at leading Silicon Valley tech firms found that among employees of these companies, 60 percent identify as white, 23 percent Asian, 8 percent Latino and 7 percent black. That same report also found that on average 71 percent of employees are men and 29 percent are women.

While advancing workplace diversity is unarguably the right thing to do; it is becoming a business imperative for global competitiveness. Faced with a shortage of skilled workers, companies, and tech in particular, understand that diversity initiatives give them access to a larger talent pool. Manpower reportsthat one-third of employers globally are experiencing difficulty filling jobs. Adding to the impetus for diversity in recruitment, a survey by Glassdoor found that for 67 percent of active and passive job seekers, a company’s diverse workforce is an important criterion in evaluating prospective employers.

Research from McKinsey & Company also indicates that more diverse workforces perform better financially. Companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians. Those in the top quartile for ethnic diversity are 35 percent more likely to outperform their respective national industry medians.

Different experiences and perspectives foster innovation

Creating new business opportunities through innovation is a fundamental source of business growth. To this end, different experiences and perspectives foster innovation needed to meet the needs of an increasingly diverse customer base.

Katherine Phillips, professor of leadership and ethics and senior vice dean at Columbia Business School, writes in “How Diversity Makes Us Smarter” that, “diversity enhances creativity. It encourages the search for novel information and perspectives, leading to better decision making and problem solving. Diversity can improve the bottom line of companies and lead to unfettered discoveries and breakthrough innovations.”

In its survey on “Global Diversity and Inclusion: Fostering Innovation Through a Diverse Workforce,” which included 321 senior executive from companies with at least $500 million in annual revenue up across the globe, Forbes Insights found, “Survey respondents overwhelmingly agreed that a diverse and inclusive workforce brings the different perspectives that a company needs to power its innovation strategy.” 

Diversity is more than a number, it’s a mindset

With such compelling reasons for diversity, especially as an impetus for reinventing existing products or developing new ones to meet changing customer needs, why are some companies still lagging? It’s encouraging that one in five Fortune 1000 companies now employ chief diversity officers to help them recruit a more diverse workforce, implement diversity training, help employees get ahead and even forge relationships with diverse vendors, according to Diversity Woman magazine.

Still diversity can’t be fully resolved by creating a job function or by hiring a certain number or percentage of minorities or female employees. Diversity is not a job title or metric.

Diversity is a mindset that needs to touch every aspect of a company so that organizations ensure that everyone embraces and contributes to the company’s D&I culture.

Diversity needs to start with a company’s hiring and promotion practices to drive more diversity in the talent pool. Recruiting sources and practices may need to change to reach a more diverse pool of candidates. Scholarships and university endowments can help train potential candidates. Since many prospects come through internal referrals, employees should be encouraged to expand their own networking efforts to reach more diverse groups and individuals.

Responsibility for diversity needs to move beyond top management and into teams, which means managers need to constantly address the topic and be prepared to openly discuss social issues and their impact. Unconscious bias training can also prove to be an eye-opening experience for management at all levels.

Another highly effective way to drive diversity and inclusion is advisory boards, made up of management and employees of various levels. Working together, advisory boards and councils can recommend process improvements and systems to ensure continued action toward diversity and gender equality. And it goes without saying all of these steps are diminished unless there is diverse representation at the board of directors level.

So it’s fine that the conversation about diversity and inclusion continues. Companies need to talk about it and act on it — until everyone gets it right.