Diversity is the superpower organizations need to cultivate for success in 2021.
By: Ajit Verghese
Tags: Diversity And Inclusion, Future Of Work, Entrepreneurship, Open Innovation, İnnovation

Our differences make us stronger and more resilient when they are acknowledged, addressed, and incorporated.

How Six Made Their Way in the World is a Grimms’ fairy tale about an ex-soldier and his five companions with special abilities who through their feats obtain all of the king’s wealth. The story is about a journey that these six are on.

Each member of the ex-soldier’s team is unique and in possession of a superpower that ends up being critical to their journey and the successful completion of their quest. The team includes:

A strong man who pulled six trees from the ground with his bare hands

A keen-eyed hunter who was taking aim at a fly on a twig two miles away

A man whose breath could turn seven windmills

A fast runner who had to remove one leg to slow himself down

And a man who causes a terrible frost in the air unless he wears his hat crooked over one ear

The diversity of the team is what makes them successful: Each of their superpowers is useful in the context of their changing environment. In this fairytale, each of their talents is critical for their collective success, and these talents are shared on behalf of the team and coordinated to maximum efficiency by the ex-soldier.

The power of a diverse team is not just a fairy tale. We’ve seen this in numerous places and research continues to show for both public and private companies that a diverse team is critical to growth.

A 2013 HBR article entitled: ‘How Diversity Can Drive Innovation’ contains a broad set of research which “provides compelling evidence that diversity unlocks innovation and drives market growth — a finding that should intensify efforts to ensure that executive ranks both embody and embrace the power of differences.” It is derived from “a nationally representative survey of 1,800 professionals, 40 case studies, and numerous focus groups and interviews, in which they scrutinized two kinds of diversity: inherent and acquired.” Companies that indexed high on both inherent and acquired diversity did better. Employees of firms with both inherent and acquired diversity were “45% likelier to report a growth in market share over the previous year and 70% likelier to report that the firm captured a new market.”

Diversity drives performance — from a January 2020 Forbes piece entitled ‘Diversity Confirmed To Boost Innovation And Financial Results’

The results, data, and studies are in, and they show that organizations that prioritize diversity and inclusion as a strategic priority do better than less diverse peers. Both board and senior leadership attention to a diverse workforce and an inclusive culture becomes a fiduciary duty to the organizations and the stakeholders that they serve.

Diversity can be a powerful tool, as long as it is not used as tokenism. Simply populating a team with diverse perspectives and experiences doesn’t always translate into better performance. In fact, the uncomfortable truth is that diverse teams can underperform homogenous teams if they’re not managed actively for differences among members. That is due in part to a phenomenon called the “common information effect”. From ‘Begin with Trust’ in the May 2020 HBR: As human beings, we tend to focus on the things we have in common with other people. We tend to seek out and affirm our shared knowledge because it confirms our value and kinship with the group. Diverse teams, by definition, have less common information readily available to them to use in collective decision-making.

These teams start at a disadvantage with this lack of common information, which is compounded by the trust gap that also exists. Professor Dominic Packer, a psychology professor at Lehigh University discusses the concept of the trust gap.

“People…are more inclined to trust members of a group with which they affiliate and less inclined to trust someone from a group other than their own. Packer calls this the trust gap, and he says it might be bridged with mechanisms that help build trust and increase people’s willingness to work outside their own groups.”

At their inception, diverse teams start at a disadvantage because of the lack of common information and the trust gap which exists because of their differences. Like beautiful, but delicate orchids, diverse teams require cultivation and purposeful nurturing — This hands-on approach is required to support teams early on. Team leaders need to work harder to engage all voices across the diverse team and harmonize the different types of knowledge, experience, and information to address the work at hand and bridge the trust gap. To bridge the trust gap requires trust-building activities that allow people to be authentic, empathetic, and accepted.

Again, from ‘Begin With Trust’ from HBR:

Trust has three core drivers: authenticity, logic, and empathy. People tend to trust you when they believe they are interacting with the real you (authenticity), when they have faith in your judgment and competence (logic), and when they feel that you care about them (empathy). When trust is lost, it can almost always be traced back to a breakdown in one of these three drivers.

Trust gaps can be filled if our teams and our leaders are authentic, empathetic, and act from a place of logic and reasoning inclusive of the least powerful of us. Lest we feel that all this complaining is much ado about nothing, There are real-world implications to our negligence.

See a recent study from PNAS, discussing the Innovation Paradox in Science

By analyzing data from nearly all US PhD recipients and their dissertations across three decades, this paper finds demographically underrepresented students innovate at higher rates than majority students, but their novel contributions are discounted and less likely to earn them academic positions. The discounting of minorities’ innovations may partly explain their underrepresentation in influential positions of academia. If diversity breeds innovation, and innovation is predictive of success, do underrepresented scientists generate more novel innovations? To compare minority and majority scholars’ rates of scientific novelty, Hofstra et al., used machine learning to analyze a population of ∼1.2 million U.S. doctoral recipients to identify scientific innovations, investigate the rates at which these innovations get taken up by others, and examine the impact these innovations have on scientific careers. Results show that rewards are similar for low-impact innovation; however, as impact novelty increases, minority contributions become devalued and are taken up at lower rates. This study reveals a stratified system in which minorities need to innovate at higher levels to achieve similar levels of career success, further stressing the critical need to address biases in research evaluation and publication.

Successful organizations are those that actively recruit and mentor diverse perspectives, and then purposefully nurture the whole organization for its differences to build trust, shared experiences, and common information. I

Investing in diverse teams and helping them actively manage their differences will provide the world with the solutions it needs to the problems we are living through. We’re betting on that, and there is room for you too. It’s not too early to start thinking about your New Year’s resolutions.