Why Diverse and Inclusive Teams Are the New Engines of Innovation

Why Diverse and Inclusive Teams Are the New Engines of Innovation

In today’s unpredictable business environment, organizations that harness the differences of their people are the ones that will excel. In the weeks after my keynote at the Great Place To Work For All Summit, I’ve spoken about the inextricable relationship between diversity and innovation with leaders around the world, and consistently, these two areas emerge as key priorities. That is because there is a growing awareness globally that diversity drives innovation.

My team at the The Medici Group and I find this consistently in the transformation work we’ve done with thousands of teams at companies around the world. Regardless of industry, field, or domain, the organizations that seek diverse viewpoints—across ethnicity, gender, age, educational background, etc.—experience higher rates of innovation. Great Place to Work’s research supports this notion as well: workplaces that, for example, actively engage remote employees or employees with longer tenures (who are sometimes left out of “cutting edge” initiatives) are much more innovative.

Elevating the importance of diversity and inclusion is just half of the equation for unleashing your organization's innovative potential, however. A deeper, more structural change is needed. Many leaders associate innovation with experts, technologists and R&D professionals whose job it is to grow the company. But the truth is that innovation is about people. It’s about the game-changing ideas they are able to create by coming together in diverse and inclusive teams. In this piece, I provide insight as to why diverse and inclusive teams are the new engines of innovation.

1. Diverse and inclusive teams create more unlikely ideas

Ideas aren’t created out of thin air. They’re created by people—by teams of people. And the more diverse these teams are along many dimensions—culture, ethnicity, gender, sexuality, age, experience level, educational background, expertise, etc.—the more likely they are to draw inspiration from seemingly unrelated places. These idea combinations lead to more unlikely—and more innovative—ideas. Let’s look at an example.

There was a hospital in England some years ago that was experiencing high error rates when they were transferring patients from the surgical unit to the intensive care unit. Teams were uncoordinated, and a handful of these errors had cost patients’ lives. Most hospitals looking to fix this kind of issue would’ve looked to what other hospitals were doing. But this one didn’t. Instead, they drew inspiration from Formula One racing. They looked at how a pit stop crew operates and applied these techniques to their transfer model. The results? Errors decline dramatically.

Intersections like these show that creating innovative ideas often requires borrowing concepts from different fields.

Diversity drives innovation.

This is the core idea behind my book The Medici Effect. Think back to how the Italian Medici family brought sculptors, architects, philosophers, and inventors from all over Europe to Florence. Together these minds unleashed an explosion of new ideas—one of the most creative eras in Europe’s history: the Renaissance.

You can unleash an explosion of ideas in your own organization. But that’s not enough. You have to decide which ideas to try.

2. Diverse teams are better at making decisions

When it comes to deciding which ideas to test and to put more resources behind, diverse and inclusive teams are far better than homogenous ones.

Data collected by Cloverpop on its decision management platform—and used by hundreds of companies—found that the more diverse the team (by gender, geography and age) the better the decision that team made. James Surowiecki’s book The Wisdom of Crowds also supports this idea.

What my team at Medici sees constantly in our client engagements is that when teams increase their level of difference, they increase their chances of selecting an idea that ends up being game-changing. Why is that? Because diversity of thought stretches a team in ways that can be uncomfortable, but effective. It raises their ambition level on what they believe they can accomplish and redefines the parameters that they otherwise operate within when they’re working in homogenous teams.

A diverse team of decision-makers can also prevent bad decisions from being made—ones that may alienate customers, harm the brand, or impede growth—simply by including people who think about the landscape differently.

Now, even though diverse and inclusive teams make better decisions, a crucial last step still remains: actually bringing these ideas to life.

3. Diverse teams are better at making innovative ideas happen

Diverse teams have far more pathways to execute on an idea, which enables them to iterate on them faster and more cost-effectively. The surface area of the resources they can tap dramatically expands. Not only that, but they can also navigate the enterprise on a tight budget, and tap into networks they may not have otherwise explored on their own. This type of expansive, serendipitous collaboration is what drives fast action.

When, for example, a Disney park that Medici worked with tapped into the resources of other Disney parks and divisions, they were able to reduce the time it takes to execute on an idea from 40 weeks to 6 weeks, a huge improvement at any company in any industry.

By now, it should strike you that diverse and inclusive teams are like idea factories—they’re literally built for innovation. But what does this mean for you and your organization right now?

4. How to bring the Diversity Drives Innovation mentality to your organization

There are three things you can do right now to enhance your organization’s innovative potential.

  1. Seek others’ perspectives: Innovation requires creating many ideas and selecting the best ones. By doing something as simple as including people with different viewpoints in your meetings, you’ll likely get inspiration you’d never think of on your own.

  2. Be wary of the word “expertise”: Remember that experts aren’t always the ones with the right or best answers. In fact, the shelf-life of “expertise” is expiring more rapidly every day. Open yourself to the possibility that anyone, anywhere can catalyze your company’s next big idea.

  3. When you’re on a team, bring your whole self to it: You as an individual have a wealth of experiences, interests, and passions to drawn on. Use them. Your opinions and insights could send a conversation down a path toward creating something truly unlikely and unexpected!

Frans Johansson