Need innovation? Add more diversity

“If you can’t see it how can you be it, or believe it is possible.”

Last week I spoke at the Asian Racing conference on Korea about diversity. The themes are relevant to any industry, If you need innovation the fastest and easiest way to get it is by adding more women to your teams.

There is plenty of evidence today that if young women can see older women in roles, then they believe it’s possible for them too. That’s why we need more of us in these roles!

Having more women (not just one) in senior roles, in management teams, on boards and in government is so important because it shows all women that it is possible, you don’t have to be unique, exceptional or chosen, and it becomes more of the NORM.

If we want good decisions, good strategies, great outcomes, then we need good discussion and that usually comes from having people around a table who don’t all look like us.

If you sit at a table with mostly the same kind of people it means you will probably all be thinking the same and that won’t help any industry move forward. Neither is it representative of our community or the world we live in, or our customers.

The more differing views discussed, whether it’s around a Boardtable or a leadership team, the more open to possibilities, open to change and aware of the future we are. A diverse Board or management team offers insights, perspective and experiences to a CEO from these differing views that a non-diverse board can't. On a non-diverse Board everyone shares similar views and has had a similar experience and things move more slowly.

If you need any more encouragement to add women, both Boston Consulting Group and McKinsey have come out with reports in the last month on how increasing the diversity of leadership teams leads to more and better innovation and improved financial performance.

In both developing and developed economies, companies with above-average diversity on their leadership teams report a greater payoff from innovation and higher EBIT margins.

Even more persuasive, you get these gains with relatively small changes in the makeup of senior teams.

People with different backgrounds and experiences often see the same problem in different ways and come up with different solutions, increasing the odds that one of those solutions will be a hit.

In a fast-changing business environment, such responsiveness leaves companies better positioned to adapt.

But if you want that innovation -  It’s only when women occupy a significant share of management positions that the innovation premium becomes evident: innovation revenues start to kick in when more than 20% of managers in a business are female

Companies in the top 20% of financial performance have more women in their leadership team, nearly 20% more than those in the bottom 20% of financial performance

The biggest takeaway from the study:  a strong and statistically significant correlation between the diversity of management teams and overall innovation.

I ended my speech reminding of a picture on kindergartens everywhere. Diversity: different individuals from different countries, valuing each other regardless of skin, sex, intellect, talents or years.

When  we value the differences we all bring to the table by collaborating, innovation will follow.