Constant innovation is the key to crushing the competition in any business, but creating real, sustainable innovation is one of the hardest things for any business to generate.
Those businesses that do manage to create innovation on a consistent basis don’t have magic bullets, they have magic teams.
The teams—particularly the managerial teams—that make up the heart of a business are the wheels that make everything else go. The better the teams, the better the innovation inside the business.
So what’s the secret to building a killer team culture? One that’s creative and capable of coming up with amazing ideas that take a business to the next-level?
For years, researchers have been finding patterns between high-performance and high-diversity in management. The better the gender, racial, and cultural diversity, the more dramatic the growth in topline revenue, valuation, and ROI. According to Deszö & Ross, this correlation is particularly strong in innovation-driven industries.
Small-group studies show teams with mixed-gender or mixed-ethnicity perform significantly better in discussion and creative thinking tasks. They make fewer mistakes, share more information, and generate more solutions. They are also less inclined to make assumptions and more willing to be strategic in the preparation of their opinions, when compared to homogenous teams.
It seems the mere knowledge that others in the working environment come from different backgrounds means employees are willing to work harder on communication—a perk that pays off for the company as a while.
Employee and managerial diversity also tends to help businesses engage with a broader consumer base and attract better job applicant talent.
So why do many companies seem to resist a disruption to their homogeneity?—because cultural change is HARD.
Even the best-intentioned employers are more likely to perceive common workplace minorities as less competent, hireable, and qualified.
In 2012, Yale researchers demonstrated this by sending identical resumes to hundreds of employers in the science and technology spaces—commonly considered “minority-friendly” work environments. The only difference between the resumes? Half had the name ‘Jennifer’ at the top, and half had ‘John’.
The results were astonishing. ‘Jennifer’ was considered more likeable – but ‘John’ was overwhelmingly rated as more competent, more employable, and a better candidate for mentoring… and also offered an average starting salary $4000 higher than Jennifer’s.
Again, these were identical resumes.
These employers weren’t trying to discourage diversity. Yet unconscious biases clearly tainted the hiring process, impeding the company’s ability to improve workplace diversity.
Drive innovation requires removing the roadblocks in the path of workplace diversity. Companies looking to maximize their revenue and valuation should make diversity a strategic priority, with purposeful (and explicit) hiring goals.
Adidas, for example, started setting hard targets for female representation in their employee recruitment process. They made diversity a strategic priority, and women now make up 30% of their managerial body. Has change helped Adidas? It would seem so—since instituting hard targets for female representation, company revenues have grown by more than $3.5 billion dollars.
Is increasing workplace diversity easy?—absolutely not.
It takes a lot of time and effort to institute—companies need to not only catalog their workplace demographics, but they also need to examine and scrutinize their hiring practices for flaws.
But the work is worth it—properly leveraged workplace diversity drives growth in innovation, topline revenue, valuation, and ROI, making it an incredible asset.
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