How Your Company Can Profit From Diversity & Inclusion

Inviting differences of opinion, synthesizing them and activating them can be difficult for executives facing urgent deadlines or those new to listening to diverse viewpoints, but homogeneity can be tragic for revenue, finding new markets and creating disruptive innovation. Below are the steps necessary to help ensure your company reaps the bottom-line benefits of diversity and inclusion (D&I) while avoiding the costs of talent attrition:

Begin the discovery stage by reverse engineering the process. Determine your end goal. Envision the ideal success scenario. Financially commit to achieving it. Determine the impediments to success: Is it your traditional business model? Is it your decision-making process? Are your models and processes dysfunctional or dated?

To achieve your stated objective, consider setting aside your regular strategy process to follow tech’s formula for success. Silicon Valley firms are guided by certain principles, including failing fast, celebrating said failures, emphasizing “out-innovating” the competition, and assembling a powerful ecosystem of activators and influencers – open innovation teams – who can catapult your strategy much quicker than traditional teams.

These influencers and activators can be internal or external (national or international) subject matter experts (SMEs). Their job is to challenge assumptions and stretch your team’s imagination, freeing them from business as usual and group think. The SMEs role is to help the strategy team leapfrog to outcomes that spark innovation or identify new markets.

You can help your team by allowing them to “fail fast.” While this might seem illogical, if a failure is going to happen for a dev ops team for example, they want to reduce the time in detecting the software problem. Defect repair costs rise significantly the longer the bug remains unnoticed. If discovered after the software hits the market a PR nightmare is added to your to-do list. Hence the need for a lean and agile team that can quickly identify the fail and rapidly fix it. This is analogous for developing any service, product or process.

As your team speeds toward its goal, you may want to take another page from Silicon Valley’s playbook by celebrating the team’s quick failures, for after repeated disheartening losses comes hard-earned success. For every “L”—you will eventually triumph—as so many software developers, CEOs and politicians have seen. Use failure to foster unity, develop empathy among teammates, craft your team’s story, build the brand and value hard-won success.

During strategy and implementation, meetings follow certain steps to enhance effectiveness. In his book Leadership Conversations: Challenging High Potential Managers to Become Great Leaders, Alan S. Berson points out many useful meeting tips, some of which are below:

At the outset, create a forum for open dialogue by letting everyone know that their opinions are required and valued.

Actively listen. It’s been proven that the majority of communication is physical, so your body language is critical. Checking your phone, doodling, crossing your arms or similar actions suggest that you don’t value the perspective being shared—or the person sharing it. Leaning forward, nodding and looking directly at the speaker suggest that you respect the thoughts being put forward—and the speaker. A study from the Center for Talent Innovation reports that leaders who give diverse voices equal time are nearly twice as likely to unleash value-driving insights, and employees in a “speak up” culture are three to five times as likely to contribute their full innovative potential. This is the type of culture has led to out-innovating the competition, as shown by the examples later in this article.

During the meetings, ask probing follow-up questions that do not require an immediate answer: they reduce pressure while increasing creativity. No one likes to feel put on the spot, so afford team members the time to think deeply and come back to you at a later date in person (preferably), as the face-to-face discourse will stimulate further brainstorming and facilitate retaining your strongest talent, precisely because they feel heard and highly valued. The cost of replacing strong talent can run into several years’ salary, depending on the level of the employee being replaced.

As you determine solutions, list the negatives and positives of each potential solution. Your objective is to find the common ground that assuages concerns, defuses conflict and ultimately leads to the most viable solution: the one with the least negatives. Praise solutions that meld the best ideas, as the goal is not a zero-sum game but an innovative solution that everyone on the team feels they have contributed to in some way.

End each meeting by sincerely thanking everyone for their participation and outline next steps. Your challenge is to get your diverse and inclusive team through its initial state of uncertainty, distrust and lack of context. It will take time to build strong communication since communication is in part based on trust.

Homogenous teams are initially quicker than diverse teams because of shared background and attendant ease of communication. However, studies have shown that once diverse teams feel more comfortable with communication, they go farther. Homogenous teams prove to be the hares that ultimately run out of ideas.

Ernst & Young’s use of similar D&I “open innovation” teams resulted in better employee retention, stronger revenue growth, and higher profitability. According to MarK A. Weinberger, EY’s Global Chairman and CEO, “[D&I] is the only way to succeed in today’s global economy.”

Similarly, former Procter & Gamble CEO Bob McDonald recalls that during the 1990s, when he headed P&G’s hair care division, he would visit Japan to meet with companies, but “the people I would meet were generally 70-year-old Japanese men with white hair. The only women I’d see were serving tea.” He cites P&G’s policy of hiring talented women as a distinct source of competitive advantage, as the career success of those women attracted other high achieving women to the company. Further, he cites the company’s D&I teams as the reason the company was able to out-innovate the competition and introduce Pantene shampoo in 55 countries. By 1994 Pantene had become the world’s number one hair care brand.

For your company, curating external SMEs, and managing the strategy and implementation processes might include bespoke think/action tanks and innovation labs, rapid prototyping, diversity and innovation levers and leaders, and/or building circles of influence; all of which can lead to nascent markets, disruptive innovation in products and services, and strategic partnerships among industry participants who should have known of each other, but did not.  Business, technology, and demographic shifts are interrelated. Hence, those three types of changes should be the focus of your strategic vision.

Ultimately, turning D&I from an HR albatross into a revenue generator requires vision. The visionary CEOs above saw that activating open innovation teams through D&I equaled savings ─ and growth. They saw that the seemingly impossible was both possible and profitable.