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Why Diverse and Inclusive Teams Are the Engines of Innovation

 Why Diverse and Inclusive Teams Are the Engines of Innovation

The business world may be ever-changing, but one thing remains constant: Organizations that harness the differences of their people are the ones that will excel.

Our Great Place To Work® research has found that when it comes to unlocking innovation, workplace diversity and inclusion is the key. Regardless of industry, field, or domain, organizations that seek diverse viewpoints — across ethnicity, gender, age, educational background, etc. — experience higher rates of innovation.

For example, our research has shown that when employees are uncomfortable sharing personal details, such as sexual orientation or whether they have a disability, those companies see a drop in levels of employee trust, pride, and camaraderie, all of which are critical to effective innovation at work.

Similarly, racially diverse workplaces show higher revenue growth than their less diverse counterparts — 11.1% for those in the top quartile versus 8.6% for those with significant gaps between white and minority employees, based on our research.

But elevating the importance of diversity and inclusion in the workplace is just half of the equation for unleashing your organization’s innovative potential. 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 can create by coming together in diverse and inclusive teams.

Here’s why diverse and inclusive teams are the new engines of innovation at work:

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.

A striking example of this concept is Wegmans’ cauliflower rice story. In 2014, before the cauliflower craze truly hit mainstream consciousness, Jody Wood, a meal coach at Wegmans, came up with the idea of introducing cauliflower rice as a healthy food option in the store. This initiative was spurred by Wood’s personal journey to find dietary solutions for her husband’s Type 2 diabetes.

The idea was implemented thanks to the inclusive and diverse culture at Wegmans, which values input from all employees, irrespective of their role. Wood’s seemingly simple idea was embraced by the management, tested in the store, and then rolled out across the Wegmans chain after resounding success.

This not only exemplifies the power of diverse ideas in driving innovation but also showcases how an inclusive culture can allow a company to stay ahead of trends.

2. Diverse teams are better at making decisions

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

Data collected by Cloverpop found that the more diverse the team (by gender, geography, and age), the better the team’s decision. James Surowiecki’s book “The Wisdom of Crowds” also supports this idea.

When teams increase their level of difference, they increase their chances of selecting an idea that is game-changing. Why is that? Because diversity of thought stretches a team in ways that can be uncomfortable, but effective.

Diversity of thought also fuels employee trust, which raises employees’ ambition level on what they believe they can accomplish and redefines the parameters that they otherwise operate within.

For example, when we asked employees in the Trust Index™ Survey if there was anything that made their workplace special or unique, one LGBTQ+-identifying respondent said:

“There are a lot of opportunities for growth and variety. My team and I are constantly developing and implementing new ideas and processes, which I feel is intellectually challenging and impactful in a way that no other job I have been a part of has been able to offer me.”

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.

3. Diverse teams are better at making innovative ideas happen

Diverse teams can bring to bear a broad array of experiences, perspectives, skills, and networks. This expansive resource base allows them to execute on ideas more quickly, efficiently, and cost-effectively.

“A diverse team of decision-makers can prevent bad decisions from being made — ones that may alienate customers, harm the brand, or impede growth.”

Consider the experience of one Disney Park that collaborated with the broader Medici Group. In this instance, the park didn’t operate in isolation; instead, it tapped into the resources, knowledge, and experiences of other Disney parks and divisions. This collaboration embodies the power of diverse teams, demonstrating how leveraging a wide range of internal resources can drastically improve operational efficiency.

Prior to this cross-collaboration, it would take 40 weeks for this park to bring an idea to fruition. After incorporating insights and strategies from a diverse set of teams across various Disney divisions, the time to execute on an idea was reduced to just 6 weeks.

This outcome not only improved the park’s operational efficiency but also enhanced its ability to innovate and adapt to changing market demands.

By promoting expansive, serendipitous collaboration, organizations can drive fast action and keep pace with the rapidly evolving business landscape. Hence, diversity doesn’t just evolve new ideas; it provides the pathways and accelerates the pace to execute these ideas efficiently and effectively.

How to bring the “diversity drives innovation” mentality to your organization

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

There are three things you can do right now to create a culture of innovation:

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.

Embracing this mindset is not only empowering for all employees but also fosters an environment where innovative thinking is truly democratized. As one young LGBTQ+-identifying employee insightfully shared in our company culture survey:

“The work culture is one that supports the mantra, ‘The best idea at the table wins’.

“Though I am a new, young employee, I feel like I have agency and autonomy, and my contributions are considered equally valid to those of my peers who have been here for years.”

3. Encourage employees to bring their whole selves to work

Every individual has a wealth of experiences, interests, and passions to draw on. Create a company culture that celebrates and uses them. These different opinions and insights could send a conversation down a path toward creating something truly unlikely and unexpected!

4. Foster psychological safety

When you have a diverse and inclusive workplace, you can unleash an explosion of ideas. But hiring a diverse workforce isn’t enough. Employees from every group need to feel psychologically safe to bring their unique perspectives forward.

The concept of psychological safety, first introduced by Harvard Business School professor Amy Edmondson, means creating a workplace where employees feel safe to take risks, voice their opinions, and admit mistakes without fear of punishment or judgment.

When individuals feel psychologically safe, they’re more likely to share unique ideas and perspectives, which can spark innovation. It also ensures that the diverse voices within your organization are not just present, but are heard and valued. This atmosphere of trust and openness is crucial for diversity to effectively drive innovation.

So, don’t let titles or years of experience restrict the flow of ideas in your organization. Today’s dynamic and rapidly evolving business landscape demands fresh perspectives, and sometimes the most ground-breaking ideas come from the least expected sources.

Diversity in the workplace drives innovation

Ready to tap into the potential of diversity and drive innovation in your organization? Don’t wait. The Great Place To Work Trust Index Survey, featuring the unique Innovation Velocity Ratio, is designed to assess and elevate inclusion and innovative practices in your workplace.

This isn’t just about today. It’s about preparing for a successful future, built on the rich diversity of your team. Join the ranks of forward-thinking organizations by getting started with the Trust Index Survey today. The time for inclusive innovation is now.


Frans Johansson Claire Hastwell