“How’s your Mango IPA?” asked David.
“Really good! Hoppy, with subtle notes of mango,” said Peter.
“Notes of mango? Sounds like a girl’s drink!” mocked David with a smile.
“That’s very sexist,” said Peter.
David was about to contest the assertion but checked himself. “Sorry, I guess you’re right,” he admitted.
“Blame it on Dad?” asked Peter mischievously.
“Well, my company is a bunch of white guys dude,” complained David.
“But seriously, does it really matter to you that all your employees are white males?” asked Peter.
“Quite frankly, it doesn’t. I just keep getting told that it shouldn’t be. I don’t get it.”
“That’s hilarious,” said Peter, chuckling. “He’s got a lot of learning to do here,” he thought to himself, still chuckling.
* * *
Diversity is critical for innovation, but why? What specifically is it about having people from different backgrounds, with different identities, and with unique needs and interests that drives innovation? How do race, gender, and other variables predict innovativeness?
Diversity is important not only in terms of the obvious manifestations, such as age, gender, and race. What drives innovation is also diversity in perspective, experience, education, and training, among other variables, and having different people in your organization increases the likelihood of reaping all of diversity’s benefits for both the company and its people. There are many works that explain how historical and contemporary structures and inequities demand diverse, equitable, and inclusive workplaces. Given space considerations and our immediate interest in how diversity sparks innovation, we refer readers to the depth and breadth of the sources found in this footnote.1
For our present purposes, diversity can be defined as “innate diversity” (age/gender/race, etc.) and “acquired diversity” (education/experiences/viewpoints, etc.). In a large survey conducted by Forbes, of 321 companies with revenues greater than $500 million, a whopping 85 percent agreed or strongly agreed that diversity is key to innovation.2 The report states: “Competition for talent is fierce in today’s global economy, so companies need to have plans in place to recruit, develop, and retain a diverse workforce.” Survey respondents reported that some areas of diversity, such as age and disability, have been harder to improve, begging greater efforts to create equitable conditions for all.
A similar ranking is reported by Stuart Levine, writing in Forbes.3 Levine’s report looked at diversity among companies belonging to the S&P 500 and found that “Diverse and inclusive cultures are providing companies with a competitive edge over their peers.” There is a substantial and growing body of evidence showing that diverse groups are more innovative and productive.
One of the pitfalls of talking about diversity is that it can too quickly lack substance or bypass needed changes, becoming simply symbolic or a publicity tool for organizations. What organizations need to realize is that attending to diversity is a market imperative. In a scathing attack on what he calls the “fraud of diversity,” William Powell rails against the lack of true cultural pluralism hiding behind a mad rush by organizations to tick the appropriate boxes to create an “HR metric and a really cool definition that’s supposed to make us feel warm, gooey and accepting.”4 He argues that everyone now generally agrees on the harmful consequences of lacking diversity, but “without embracing the reason behind the need for diversity, the how and the why of it all go painfully unnoticed.” This simply cannot continue, as the United States and other countries are “at an inflection point regarding gender, race, and similar variables, and without full inclusion society will fail to maximize its talents and organizations of all types will lose legitimacy,” connecting “firmly with calls from vast, cross-disciplinary literatures—warranting both attention and change.”5
First, a diverse workforce represents the diverse marketplace for every organization. It’s a simple equation: the better represented the marketplace within the organization, the better its market orientation. The better the organization understands its consumers, the better it can innovate for its market. Diverse teams are better able to understand unmet market needs. If someone within a team is in any way like the consumer without, they are more likely to understand that consumer better. Levine reports that when there is at least one member in a group that shares the client’s ethnicity, that team is twice as likely to understand that client’s needs. The same holds for bigger markets and the consumer at large.
Second, diversity is important in the creative process. There are several reasons why diversity creates cognitive complexity. Steve Jobs is known to have often used William Plomer’s words to define creativity as “connecting the unconnected.”6 The more diverse the group of people and their experiences, the richer the discussion, and the more they will reach far and wide for concepts and lenses that can be connected during the creative process. It’s what Arthur Koestler has called “bisociation,” which underscores that almost all creativity is generated by smashing together two unrelated planes of existence (or frames of reference) and seeing what sits at the intersections of those worlds.7 Such creative moves simply cannot come into being without multicultural, multiform, and multiple identities in the mix of an organization’s work.
In terms of process, diversity “jolts us into cognitive action in ways that homogeneity simply does not,” says Columbia Business School professor, Katherine Phillips, describing her own and others’ research for Scientific American in “How Diversity Makes Us Smarter.”8 She says that the heart of it is “informational diversity”—people coming from different backgrounds that bring a rich assortment of knowledge, thought, experiences, and perspectives to any situation. This array of people and perspectives forces the consideration of broader groups, opening the possibilities of collaborating with a wider set of solutions. Diverse group members set a foundation for unique and creative results.
In a study Phillips conducted, diverse groups outperformed homogenous ones in problem-solving tasks. In her words, “being with similar others leads us to think we all hold the same information and share the same perspective.” The more homogenous a group, the more homogenous the thinking. “A big part of what I believe is that, fundamentally, we each have something truly unique to bring to the table,” Simo Fidji, CEO, Instacart, told Fortune magazine.9 “It’s that diversity that’s going to make it really fun for all of us to work together—and much more interesting and creative than if we were all made out of the same mold.”
Sanjay has found the same results in leading groups through innovation labs and problem-solving workshops. Several other experiments and even large sets of data across multiple organizations have found conforming evidence that diversity enhances innovation. For example, Cristian Deszö of the University of Maryland and David Ross of Columbia University, who studied the composition of the top management of 1,500 firms of the S&P from 1992 through 2006, found that, on average, female representation in top management led to “an increase of $42 million in firm value,”10 and that this improvement in firm performance was especially seen in firms that strategically emphasized innovation.
We could go on about the importance of diversity to innovation (and we urge readers to start exploring the many works linked to in our footnotes, as well as all that can be found in books, articles, and through professional development opportunities with your staff), but the important point is that this ingredient requires that you make every effort possible to have diverse people with different identities, backgrounds, cultural and subcultural perspectives, levels of training and field experiences, and more to your organization. Diversity isn’t a nice add-on to an organization’s work. It’s now utterly clear that it’s central to the very innovation that’s even possible. If you’re serious about building a culture of innovation and creating an organization aligned with 21st century demands, you’ll need to make a new or renewed commitment to diversity as one of the key forces that can drive your products or services forward.
• Diversity in experience, perspective, thinking, identities, culture, and beliefs is vital for innovation.
• A diverse workforce represents the marketplace and different public, which helps the organization understand its market better.
• Informational diversity forces the group to consider the assortment of knowledge, thought, experiences, and perspectives needed to truly understand user needs and interests.
• Diversity promotes innovation, increasing cognitive flexibility and allowing groups to consider novel perspectives and thoughts that enhance the creative process.
• Groups with diverse members need to work harder and put themselves outside their comfort zones and tap into the knowledge and voices that exist in the room.
1 Some works to start with include F. Dobbin, and A. Kalev. July–August 2016. “Why Diversity Programs Fail,” Harvard Business Review. https://hbr.org/2016/07/why-diversity-programs-fail; G. Morse. July–August 2016. “How to Design Bias Free Organizations,” Harvard Business Review. https://hbr.org/2016/07/designing-a-bias-free-organization; J. Gilhool. June 03, 2013. “Going Global? Better Rethink Your Diversity Training,” Forbes. https://bit.ly/2znePW5; Larger works on structural racism across society include I. Kendi. 2019. How to be an Antiracist (New York, NY: One World); I. Oluo. 2018. So You Want to Talk About Race (New York, NY: Seal Press); R. Rothstein. 2017. The Color of Law (New York, NY: Liveright Publishing). A great diversity, equity, and inclusion reading list can be found at: https://libguides.library.umkc.edu/ld.php?content_id=62834289.
2 D. Tencer. July 29, 2011. “Forbes Survey: Workplace Diversity Key To Innovation,” HuffPost Canada. www.huffingtonpost.ca/2011/07/29/workplace-diversity-innovation_n_913214.html.
3 S.R. Levine, and Thought Leaders. January 15, 2020. “Diversity Confirmed To Boost Innovation And Financial Results,” Forbes. www.forbes.com/sites/forbesinsights/2020/01/15/diversity-confirmed-to-boost-innovation-and-financial-results/?sh=54b73461c4a6.
4 W. Powell. July 28, 2011. “Why Workplace Diversity Is a Fraud,” Business 2 Community. www.business2community.com/leadership/why-workplace-diversity-is-a-fraud-046703.
5 D. Waisanen. 2021. Leadership Standpoints: A Practical Framework for the Next Generation of Nonprofit Leaders (Cambridge University Press), p. 12.
6 “William Plomer > Quotes,” Goodreads www.goodreads.com/author/quotes/59133.William_Plomer.
7 A. Koestler. 1964. The Act of Creation (New York, NY: Penguin Books).
8 K.W. Phillips. October 2014. “How Diversity Makes Us Smarter,” Scientific American. www.scientificamerican.com/article/how-diversity-makes-us-smarter/.
9 M. Aspan. November 10, 2021. “Strategy Session: Instacart CEO Fidji Simo on How She Found Her Own Leadership Groove,” Fortune. https://fortune.com/2021/11/10/instacart-ceo-fidji-simo-leadership-style/.
10 C.L. Dezsö, and D.G. Ross. January 13, 2012. “Does Female Representation in Top Management Improve Firm Performance? A Panel Data Investigation,” Strategic Management Journal 33, no. 9, p. 1080.