Challenges of Diversity and Innovation in the Workplace

This report is intended to help leaders and HR professionals understand the connection between, and challenges within, diversity and innovation within companies. To produce this report, I synthesized data from numerous interviews with managers across multiple international companies in conjunction with statistical data sourced from existing studies.

"Innovation is a process to bring new ideas, new methods or new products to an organization, true innovation is involving every single employee to look around their work area to identify small problems around them and to be empowered and responsible to solve them."

- Norman Bodek, PCS Inc.

Some critical characteristics of an innovator

1. Continuous reflection
2. Unattached exploration
3. Iterating between abstract and concrete thinking
4. Action-oriented
5. Opportunity-focused
6. Mental resilience

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Innovation has always been the life-blood of organizations across the globe. The ability to differentiate oneself from the competition is paramount for any business to stand out and thrive in competitive marketplaces.

In an increasingly digitally-connected world, it is becoming harder and harder for companies to achieve this. Technologies and processes are innovating at breakneck speed. It’s not enough to simply look at the existing tools on the market and find whatever gaps remain.

Instead, modern companies need to innovate how they innovate, and the most successful way to do that is through diversity.

Why diversity is crucial to innovation

Most executives agree that innovation is a crucial aspect of their company’s growth strategies. The ability to find the next big thing — or even to simply revolutionize the current big thing — is often a surefire way to grow even a large, international corporation considerably.

The problem is, much of innovation in the business sphere is still focused on technologies and processes. Companies are spending all of their time and resources scrutinizing the thing they’re trying to innovate.

What they should be doing, however, is putting more effort into the people doing the scrutinizing.

In order to reimagine a solution to a problem, it’s necessary to be able to perceive this problem from different angles. When most of a workforce has a homogenous cultural, social, and economic background, it can limit the team’s ability to consider a problem from a fresh perspective. That’s not to say innovation is impossible, but it’s certainly limited. There are approaches and considerations that may never occur to a non-diverse team.

This is where diversity plays a large role in modern innovation.

Diversity is about empowering people by respecting and appreciating what makes them different, in terms of age, gender, ethnicity, religion, disability, sexual orientation, education, and national origin.

-Global Diversity Practice

According to a McKinsey report, 94% of senior executives believe the corporate culture and team are the biggest drivers of innovation. Studies show that diverse companies derive more revenue from innovation than companies with lower diversity levels. Companies which have above diversity generate some 45% of their revenue through innovation; companies with below average diversity only 26%.

Diverse teams are able to bring a breadth of perspectives to an issue that non-diverse teams can’t. People from one country and one social background will have a very different view of the availability, usability, and effectiveness of a given piece of technology, service, or process than those from a different background. What might seem mundane to one group may be unique and inspiring to another, or vice-versa.

But, of course, this is a solution easier said than done. There are several important challenges businesses must overcome when it comes to running an innovative, diverse team:

• Ensuring management and leaders understand how to effectively run a diverse team. Incorporating people with diverse cultural backgrounds, who may have different language proficiencies, is a skill many leaders have not yet had to learn.
• Creating a feedback loop that involves all members of the team, to prevent senior management from limiting concepts to what they feel is right.
• Engendering a workplace culture of innovation, where creativity is encouraged and workers feel empowered and safe to offer suggestions.
• Ensuring that team members themselves are able to function well in an innovative environment. There is a certain vulnerability to sharing ideas that we are proud of; if they’re rejected or criticized, it can create tensions within a team. Individuals must work well as part of a collaborative creative unit.

How businesses can encourage innovation through diversity

Though presented in bullet points, managers and leaders looking at the above challenges will recognize how significant they can be. Overcoming any one of them would be a considerable task for an organization.

However, the teething troubles are certainly worth the rewards.

1. Encourage diverse hiring. More than ever this should be coming higher and higher on the company's list of priorities. Workers overwhelmingly report that they prefer working on a diverse team than a homogenous one when given the choice. Even where innovation is not strictly the desired outcome, having a diverse team will empower the company in other ways.

2. Build global leadership. Like most things in a business, the most effective changes come from the top. By focusing on building global leadership within an organization, managers and leaders will start to be better prepared to handle diverse teams from the outset. Less time will be needed to train managers to be inclusive leaders, as it will already be fully integrated into their role.

3. Encourage diverse thinking. It’s too easy to get set in our ways. Senior management is often senior for a reason — they’ve been doing their job for a significant length of time, and have been effective at it. While this experience is invaluable, it also runs the risk of establishing a status quo that can jeopardize a company when change becomes necessary. It’s important to establish feedback processes where everyone in the team, from top to bottom, is given equal opportunity to provide feedback and insight into how processes are working. It is only by giving everyone the ability to have their voices heard that diverse, innovative concepts can be discovered.

4. Ensure team members to handle criticism. This goes for everyone on a team, from the highest manager to the newest hire. Giving feedback is only half the challenge; the other half is receiving it. Coaching can be an invaluable way to make sure that everyone on a team can productively provide and receive feedback, without getting emotional, defensive, or confrontational. This in turn will encourage everyone to voice their ideas.