Get Rich Quicker with Diversity

Read time: 5 minutes

I used to think of workplace diversity as a cool thing that makes daily interactions with colleagues more interesting.

Today I treat diversity as no less than an innovation superpower.

I am firmly in the camp of the believers. We have witnessed that enhanced diversity not only drives superior individual outcomes; it has a tremendous positive effect on the success of any team and any organisation.

In this article we’ll delve into:

• the types of diversity that are essential in driving innovation,
• some of the surprising benefits of a diverse team,
• the importance of 'diversity skills’, and as always,
• I’ll provide actionable steps to enrich yourself and your organisation.

I. Types of diversity and business benefits

When we speak about diversity driving innovation within organisations, it's crucial to think beyond just demographic diversity:

• Demographic diversity: age, ethnicity, gender etc - the most visible forms of diversity. It creates an environment that reflects the diverse world in which we live, which helps us to design products or services that appeal to a broader market.

?? Diverse team = Big business

?? Homogenous team = Limited market size

• Cognitive diversity: how people perceive, think, and solve problems. People with different personality types and thinking styles can hugely enhance a team's problem-solving capabilities. It promotes our ability to generate unique insights and tackle complex issues from multiple angles.

?? Diverse team = Superior problem-solving

?? Homogenous team = Straightjacketed thinking

• Cultural diversity: takes into account different values, beliefs, norms, and ways of understanding the world, which are always shaped by one's cultural background. Cultural diversity can enhance our ability to operate in international markets and design products that are culturally sensitive and appropriate.

?? Diverse team = Global insights

?? Homogenous team = Cultural insensitivity

• Functional diversity: in professional disciplines, or departments within a company. Combining insights from different functions, like engineering, marketing, finance, or HR, can enable out-of-the-box thinking and holistic solutions.

?? Diverse team = Groundbreaking solutions

?? Homogenous team = Siloed thinking

• Experience diversity: Differences in work experience, industry experience, leadership experience, and life experience can vastly enrich our understanding and our approach to problem-solving.

?? Diverse team = Rich ideas

?? Homogenous team = Groupthink

It should be obvious that all types of diversity can contribute to superior innovation capabilities, but the mix that proves most beneficial will depend on the specific needs and context of your organisation.

II. Unexpected benefits

Most of us are aware of the role of diversity in boosting creativity, attracting talent, and enhancing your company’s reputation. However, it also offers non-obvious benefits:

• Organisations with richer diversity show greater adaptability and confidence in the face of disruption.
• They’re also better equipped to mitigate unconscious bias in their decision-making. By highlighting blind spots and the impact of intersectionality, greater diversity strengthens an organisation’s understanding of its teams - and by extension of its customers, too.
• These organisations tend to provide richer customer experiences and ensure psychological safety, encouraging employees to share new ideas more freely.
• A remarkable statistic comes from a McKinsey report from 2018 . According to their study, companies in the top quartile for racial and ethnic diversity are 33% more likely to have financial returns above median in their respective national industries.

So there are real, tangible financial benefits associated with cultivating different types of diversity within our organisations.

III. Diversity skills: Some are more 'skilled' at diversity than others

We are all diverse, but are some of us more diverse than others?

No one individual can be inherently more 'diverse' than another, of course. Diversity refers to the variety of differences between people, and each person has their unique mix of characteristics, experiences, and identities. So we’re all equally ‘diverse'.

However, when it comes to being 'skilled' at diversity, it's more about how individuals understand and make use of diversity in their interactions. Some people might be more skilled in this regard due to a few important factors:

• Cultural competency: Some people have had more exposure to different cultures, beliefs, and customs, either through personal experiences, education, or their living environment. This exposure can make them more adept at navigating diverse settings.
• Emotional intelligence: High emotional intelligence can contribute to better understanding and empathising with people from different backgrounds. High EQ colleagues therefore tend to enable inclusive environments where diversity is valued.
• Open-mindedness: Individuals who are open to new ideas, perspectives, and ways of doing things tend to be best equipped to leverage the benefits of diversity.
• Active learning: Those committed to continuous learning about diversity, inclusion, and social justice issues are generally more effective in engaging with diversity in a meaningful manner.
• Exposure to diversity: People who have lived and/or worked outside of their comfort zone often have a more developed understanding and appreciation of diversity.

Although each of us is equally 'diverse', some become more 'skilled' than others at leveraging diversity thanks to their experience, attitudes, or personal characteristics.

These 'diversity skills' can play a significant role in extracting the benefits of diverse teams.

IV. Say yes to Rich: Actions companies should take

Now that you’re convinced of the benefits of cultivating richer diversity, there are several concrete measures that you can take - starting today:

• ?? Adopt more inclusive recruitment practices that value diverse skills and backgrounds, as opposed to looking for cookie cutter profiles or for a strong match with existing employees. The same applies to promotions from within.
• ?? Create and maintain a culture of deep respect, radical openness, and psychological safety. (See my previous article on this topic to read more about how to achieve this.)
• ?? Provide 21st century diversity training to increase awareness and cultural competency. But do so in a way that goes beyond a box-ticking exercise for cosmetic purposes.
• ?? Implement inclusive workplace policies that cater to diverse needs. (This one should be a no-brainer nowadays.)
• ?? Actively promote diversity in leadership roles. If there’s little diversity at the executive level, it’s unlikely an organisation will be able to extract the benefits of diversity lower down the org chart.

Conclusion

Diversity is not a checkbox to tick. It’s a valuable company asset that enriches innovation culture and drives superior commercial performance.

A superpower, no less.

Embracing and pushing for greater diversity might just be your key to gaining a genuine competitive edge in today's complex business landscape.

With that in mind, how could you make a personal commitment to drive richer diversity in your everyday work interactions, decisions, and practices?

???This is my bi-weekly newsletter in which I share important insights and tips on building a healthy culture of innovation. Subscribe to Culture for Lunch to get notified each time a new article is published.

If you received this article by email, you can forward it to a friend or colleague.

If you are reading it on LinkedIn, please hit the like button (??) and help me spread the message.

Thank you for reading and enjoy your lunch,

Stephen