Diversity performs better

Diversity performs better
November 2, 2020 Digital Intensity

By Gideon Malherbe, VCI Founding Partner

Race, gender, self-identified LGBTQ+, language, age, education and disability are just some of the elements of discussions on diversity. These discussions can often also include topics relating to country demographics, industry cycles, professional certifications, pay scales, regulatory frameworks and more. Fortunately, we’re on a positive trend line as we see a majority of companies in North America, Europe and around the world making diversity a top priority.

Of note is the role of diversity in contributing to the successful management of corporate transformation. Research in 2020 shows that companies in the top quartile of ethnic and cultural diversity were 36 percent more likely to outperform on profitability. This means that diverse teams perform better than monochromatic teams. There is also substantial research into the relationship between knowledge combination capability and the innovative performance of organizations.

It’s true that bringing together people of diverse ethnic, social, economic, and philosophical backgrounds often results in some tension and turmoil. Here we keep in mind that cultural backgrounds are a primary source of identity and serve as a foundation for a great deal of self-definition, expression, sense of individual identity and group belonging. To succeed is to make the work environment welcoming to all and the task of innovation challenging and rewarding.

Company behaviors are manifest though its culture. A culture of successful innovation embraces people of various backgrounds and beliefs. Successful innovation teams work with appreciation and respect whilst pushing the envelope of novel solutions for their company.

Here we get to the core element of diversity in thinking. We need to make sure we actively involve people who represent various views of the world and who are not the same as the proverbial “us.” We also need to create design criteria that is more enriched that the proverbial “we need more diversity.” In this way, companies can leverage the abundance of thoughts and ideas to improve business in all dimensions.

If there is dysfunction in a company because people don’t understand the benefits of diversity, there is a decreased chance of developing successful innovation programs. And a halfhearted approach to designing diverse teams will inevitably result in a bureaucratic culture. Innovation won’t make its way through an environment where only safe, decades-old ideas will be adopted. And this type of company will fall further and further behind as the rest of the world is increasingly proactive in cultivating diversity in all of its forms.

If you compare diversity in heavy industry with technology shops like Google, you’ll find more diversity at Google because they have a propensity to innovate. Whereas in heavy industry, we tend to find a decision must first happen that innovation is important and then start to design an innovation culture.

Google wants a workforce that’s representative of its users, and a workplace that creates a sense of belonging for everyone. They proactively look to hire people with different backgrounds and a wide range of experiences. They focus on how a candidate will add to Google’s culture, not simply how they might fit in. This is an important shift in perspective, from “culture fit” to “culture add.”

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VCI Transformation Forum, Notes & Insights, October 2020

Let’s get in touch

Gideon.malherbe@govci.com

+1 914-381-0000