Decades of research has shown us that diverse groups are more innovative. Diverse groups, including people from different ethnicities, races, genders, and sexual orientations, have been proven to be more innovative than homogeneous groups. This is discussed in depth by Katharine Phillips in Scientific American, who concludes that diversity and inclusivity are giving companies a competitive advantage.

It’s believed that this happens for two main reasons:

  1. People from different backgrounds bring new and differing information and viewpoints.
  2. Interacting with people different from ourselves forces us to be more prepared, to have more empathy, and to expect differing points of view.

This article explores diversity and innovation in more depth.

What is diversity at work?

Employee diversity can include people with a range of backgrounds. Staff might be a range of ages, a mix of genders, from different ethnic minorities, different races, and different sexual orientations. It can also include people with a variety of experience in life, for example, the subjects they’ve studied, the industries they’ve worked in, their career path before joining your company, and the countries they’ve chosen to work in. It’s been proven repeatedly that teams with a range of diversification are the most productive and innovative.

Here’s what the research has told us

Boston Consulting Group (BCG) surveyed 1700 companies to find that diverse management teams were more innovative. Companies with high employee diversity generated 45% of their income from innovation. This compared to just 26% in companies with lower diversity. So that’s a 19% advantage translating to the bottom line of these better-performing companies.

A great example to bear in mind is that a male and a female leader might have very different perspectives, in the same way that a designer and a scientist would have different views. Every person’s perspective is unique, so the broader range of people you can attract to your team, the more ideas and insight they will bring and share with you.

Cristian Deszö and David Ross studied the effect of gender diversity on top companies. They found that companies with females in upper management tiers generated an increase of up to $42 million in the value of the business. They also found that businesses giving priority to innovation reaped better financial results when women were part of their leadership teams.

It’s also been found that racial diversity can achieve similar benefits for companies. Orlando Richard Texas University surveyed leaders at nearly 200 banks. The study found that higher levels of racial diversity were related to better financial performance.

Why are non-diverse groups less innovative?

It’s been found that being with people who we believe are the same as us makes us think we all have the same knowledge and perspective. This belief can stop us from sharing, discussing, and processing new ideas, which hinders creativity and innovation.

Try it for yourself

You can test your own ability to think about ideas from different viewpoints by doing this short exercise:

You’re creating a presentation for an industry event. The person you’re working with to deliver the talk is from Spain. She speaks fluent Spanish and has English as her second language. She has worked ten years of her career in Barcelona and another ten in Sweden. Think about that person’s culture and experiences and consider how you would prepare for the presentation – what will you do differently?

Get the latest insights

If you’d like to talk about the steps you can take to encourage diversity in your teams, I’d love to chat. At this difficult time I’m setting aside part of my day to offer free mini Executive Coaching and Mentoring to people who would value some help in adopting new ways of working. Get in touch if you’d like to talk.