Innovation may be a buzzword in business, but our understanding of how to measure and achieve it evolves on a daily basis. Many have come to understand that innovation is not just advancement towards a technological future, but also the acceptance and fostering of different people from varied backgrounds. If a business needs to think “outside of the box” for their next idea, how are they going to do that when everyone on the team is from the same background, city, schooling, or identity? Consistency in perspective simply cannot sustain itself in our global economy.
According to a 2003 study, the changing demographic of the United States caught many US-based business developers off guard. Diversity was once considered to be of little concern to major corporations, but a 2000 census of the US population proved that diversity was growing, vital to sustaining business, and could be the future of profitability (McCuiston, Pierce & Wooldridge 2003). On a more global scale, this rings especially true to the global marketplace.
Since then, there has been an increased emphasis on the impact diversity holds for business; both on a local and global level. However, despite this, many businesses have failed to become entirely inclusive. Discriminatory practices still run rampant in many offices around the world, and employee quality or potential is often overlooked based on trivial misconceptions or stereotypes.
The companies that have pulled through and become inclusive are showing the benefit fostering diversity has on internal company culture, on growing a loyal customer base, and increasing profits. The main draw within diversity for many businesses is the ability to attract (and retain) top-level talent within an industry.
Diversity is universally understood as variety. For business, this means more than the traditional ‘cookie-cutter’ version of an employee that has dominated the industry for over a century. As the Harvard Business Review describes it: it is both inherent (what you’re born with) and acquired (what you learned from experience).
Diversity can expand into any form of identity or background. Diversity can mean empowering women into leadership positions – something that is growing and showing to be profitable for the global marketplace. Diversity can also mean providing opportunities to people of color; people on the LGBTQIA spectrum; or people with a unique education outside of the industry.
You’ll never know which mind holds the next great idea, and hiring diverse employees is a sure-fire investment that will pay off in the long term.
You’ll never know which mind holds the next great idea, and hiring diverse employees is a sure-fire investment that will pay off in the long term. Even if the employee lacks the qualification at first, allowing them the opportunity to learn and understand can lead to endless possibilities.
Diversity comes into play in a couple of ways, but most notably in the creation of ideas and execution of tasks. The Wisconsin Task Force on Arts and Creativity in Education defines the creative process as: “identifying a problem, exploring multiple solutions, and accepting the risk of failure as the best solution emerges” (WTFACE 2010). In a business sense, this can be seen with brainstorming sessions or group projects.
As the senior director in the Office of Diversity with Walmart, Donald Fan notes that diversity is especially powerful when you can combine differing perspectives in these brainstorming scenarios: “Diverse teams often outperform teams composed of the very best individuals, because this diversity of perspective and problem-solving approach trumps individual ability” (Fan 2011).
These varying viewpoints allow co-workers to challenge each other and think differently. However, these businesses have to ensure that the environment is inclusive. Without inclusion, these ideas will not be able to “germinate and grow” (Fan 2011) and will end up staunching any creative output. Employees will be more wary of speaking up and sharing their ideas to the group. As Fan notes, inclusive workspaces must trust their employees, empower them, value their input, respect their differences and opinion, and must work to capture the best opportunities.
A study co-authored in 2014 by Sara Ellison, an MIT economist, found that diversity in terms of gender is powerful for many businesses. Ellison looked specifically at the bottom line of businesses that were all female, all male, and compared the results to co-ed businesses. Covering survey data from more than 60 American offices from 1995-2002, Ellison concluded: “shifting from an all-male or all-female office to one split evenly along gender lines could increase revenue by roughly 41 percent” (Ellison & Mullin 2014).
However, Ellison’s study also revealed some of the bigger challenges to a diverse workplace. According to her results, employees in the most successful and co-ed offices were less happy on a day-to-day basis. This could be due to some of the bigger challenges that diversity brings to the office: mainly greater risks, resistance to change, and issues with communication or understanding. However, the reward is well worth overcoming the obstacles.
One United States university, Arizona State University (ASU), has found the power that diversity brings to being innovative in the ever-growing global college experience. For two years running, ASU was named the top school in innovation by U.S. News and World Report. For a public research institution in America, this was a high honor.
The President of the institution, Michael Crow, has helped create an industry standard for underprivileged and “nontraditional” (or returning) students through ASU’s Diversity Plan. He has pioneered programs aimed at the Native American youth in Arizona, as well as at the local Hispanic population, and helped advance the education of women in STEM research; claiming that the only way to stay ahead is to be an inclusive university both in student base and in leadership opportunities.
Businesses can take note of ASU’s recognition and drive towards innovation. ASU’s open platform to students of varying backgrounds not only attracts top talent, but ASU also gives them the room and investment needed to flourish. Obviously, those efforts have paid off.
Jack Ma claims that their secret to success is the company’s inclusion of women in leadership roles.
Another, more global presence, is Alibaba. They have proven that success is intrinsically tied to empowering diverse employees. The Chinese e-commerce corporation has been exceedingly successful within their past few years as a public company. Jack Ma, founder of the company, claims that their secret to success – or “secret sauce” as he says – is the company’s inclusion of women in leadership roles.
Most CEO positions in the world are run by men, with less than 4% of CEO positions within Fortune 500 companies being held by women. Alibaba, on the other hand, claims to have 35% of their leadership positions held by women, and 40% of the total employees being women. Compared to top tech companies in Silicon Valley — who have only recently experienced a rise in women leadership roles — these numbers are impressive and strong evidence at the power inclusion holds.
Diversity is more than a numbers game. It leads to greater risks, and can cause resistance to change and issues with communication. But it also leads to greater rewards, and a tighter company culture, and a more loyal customer base. The risks may be intimidating, but the rewards are far more substantial.
Especially in terms of a more diverse workforce; providing employees the support to grow and test their creative ideas is vital to fostering a more innovative base. Companies will find that being creative inventors requires a true deviation from the norm. Our identity is created by our worldview and personal experiences, and what we bring to the table is not only unique because of this, but extremely vital to the future we want to create in this world.
Inviting innovation into the office is more than creating an action plan or investing in technology. It is also breaking the mold, thinking outside the box, and taking a great leap that will lead to even greater outcomes. Allow your employees to become those mold-breakers, and your business may be the next champion of the industry. You’ll never know until you try.
By Katie McBeth
Katie McBeth is a freelance writer out of Boise, ID, with experience in marketing for small businesses and management. She spends her free time being the mother of three cats and a dog named Toby. You can follow her animal and writing adventures on Instagram or Twitter: @ktmcbeth.
Ellis, Sara & Mullin, Wallace P 2014. ‘Study: Workplace diversity can help the bottom line’, Journal of Economics and Management Strategy [online]. Available from: https://www.eurekalert.org/pub_releases/2014-10/miot-swd100614.php. [Accessed 15th, November, 2016].
Fan, Donald 2011. ‘Proof that Diversity Drives Innovation’, DiversityInc.com [online]. Available from: http://www.diversityinc.com/diversity-management/proof-that-diversity-drives-innovation/. [Accessed 15th, November, 2016].
McCuiston, Velma E, Wooldridge, Barbara Ross & Pierce, Chris K 2003. ‘Leading the diverse workforce: Profit, prospects and progress’, The Emerald Research Register, vol. 25, no. 1, pp. 73-92. Available from: http://business.kingston.ac.uk/sites/default/files/BH4702%20Introduction%20to%20HRM%20-%20article%201%20for%20Problem%20Based%20Report.pdf. [Accessed 15th, November, 2016].
Wisconsin Task Force on Arts and Creativity in Education, 2010. ‘Towards a Definition of Creativity’, Education.com [online]. Available from: http://www.education.com/reference/article/towards-definition-creativity/ [Accessed 15th, November, 2016].