Diversity drives innovation, especially if embraced by leadership

Diversity in tech symbolised within an office setting.

While most entrepreneurs and businesses accept that having a diverse workforce offers benefits, the idea that diversity drives innovation may be ambiguous or difficult to quantify. 

Fortunately, there’s a lot of evidence that diversity drives not only innovation but also market growth, a finding that should motivate everyone to embrace the power of diversity. 

Diversity drives innovation: the evidence

A few years ago, Harvard Business Review published a study that is still relevant today. In a survey of 1,800 professionals, 40 case studies, focus groups and interviews, researchers reviewed two types of diversity: inherent and acquired. Inherent diversity involves traits of birth (ethnicity and sexual orientation); whereas acquired diversity involves traits gained through experience: working in another country can help you appreciate cultural differences. They then looked at companies whose leaders demonstrated at least three traits of inherent diversity and three of acquired diversity.

Innovative ideas and approaches

Diversity drives innovation by creating an environment that encourages outside the box thinking. When minorities are part of the workforce and leaders value cultural differences, all employees can persuade managers, owners and directors to develop innovative ideas.

Failure to embrace diversity from leadership translates into losses of market opportunities.

According to the researchers, the explanation is simple: inherently diverse contributors understand the unmet needs in under-leveraged or non-leveraged markets.

The survey also concludes that when at least one employee has traits in common with the customer, the entire team can better understand that customer. Thus, a workforce with a member who shares a customer’s ethnicity is a staggering 152 times more likely to effectively reach out to that customer. This isn’t one person’s communication skills we are talking about, it’s the entire team. 

The importance of embracing diversity 

Importantly, diversity is about empowering people by appreciating and embracing our differences. It can enrich our lives and broaden our horizons. But in business, diversity also drives innovation, as it becomes an integral part of an organisation. And while there is no single formula for embracing diversity in business, it’s essential to build a diverse team.

To do this, companies need to ensure that hiring and onboarding processes are inclusive.

Inclusion fosters diversity

While having a diverse team is a huge asset to an organisation, there is still work to be done. 

Diversity awareness must be raised and established in organisation-wide policies.

When leaders encourage diversity and inclusion, they are creating an environment where the freedom of expression is respected, and their staff are safe to speak up without prejudice. This is the point where diversity drives innovation: employees, out of their comfort zone, confront new situations, coming up with ideas that translate into growth.

More and more organisations are recognising the benefits of growing a diverse team, which is great, but it is important to have the working culture and processes in place to allow your team to flourish.


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