How Diversity And Innovation Drive Great Cultures In The Future Of Work

Workplace culture has become an increasing priority for both employers and employees in recent years. Your organization’s culture, or its shared beliefs and values, define how your organization does business, how teams interact with one another, customers, etc. Not only does a strong culture inspire high commitment, but it also drives high performance. McKinsey’s research of over 1,000 organizations and three million people found that companies with cultures in the top quartile perform 200% better than those in the bottom quartile.

Even beyond the compelling business case, employee sentiment also supports the importance of a strong culture in driving success. Deloitte’s research found that 94% of executives and 88% of employees believe a distinct workplace culture is essential to business success.  Hired found that company culture is the second most important factor candidates consider when considering whether to work for a company beyond compensation. And as employees continue to expect their organization’s values to mirror their own, Gartner Inc.’s post-election survey of 3,000 employees revealed that 68% of employees would consider quitting their current job to work for an organization with stronger viewpoints on the social issues that matter most to them.  

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The Future of Work

As the pace of change continues to accelerate, companies and employees alike are now under constant pressure to adapt to new business strategies, new ways of working, and new technologies. To succeed, companies must therefore view the future of work in a whole new way. As hybrid work models are increasingly likely to become our new normal, companies and employees alike are now under constant pressure to adapt to new business strategies, new ways of working, and new technologies. With all the places where work now occurs, we need to see work as an activity that is no longer defined by where it’s happening. This shift means that employees now need to experience their work culture virtually from wherever they are. So, the future of work requires companies to not only be able to sustain strong cultures across different teams and geographies, but they must also be able to foster innovation in their culture to stay a step ahead in uncharted waters. At the heart of innovative cultures, the ones that meet today’s challenges and look ahead and solve tomorrow’s challenges is their ability to use diverse ideas and perspectives as a competitive advantage.

Brainstorming team

Why Diversity Matters

Diverse workplaces drive innovation because the more diverse 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. Organizations that can harness their people’s diversity are also more likely to understand their customers and what they value. That is why research evidence shows that diversity unlocks innovation and drives market growth in companies.  Across more than 1,000 companies and 15 countries, McKinsey’s data continues to show that companies in the top quartile of gender and ethnic diversity were 25% and 36% more likely to financially outperform those in the bottom quartile, respectively.

Despite the strong business, employee, and moral imperative, the lack of diversity in organizations, especially at the higher levels of leadership, is an often-discussed problem with little progress. In fact, in some cases, we’ve even gone backward. We currently have only five Black Fortune 500 CEOs, down from a high of six Black CEOs in 2012. And just below the highest ranks, Black professionals are underrepresented at the senior manager, VP, and SVP levels (4%).

Leadership business meeting
Leadership business meeting GETTY

As of the first quarter of 2021, 41 women will lead Fortune 500 companies., which is an improvement from the 33 companies in 2019. However, fewer women hold senior vice president, vice president, director, and manager roles in 2021 than in 2019. This reduction aligns with statistics showing women dropping out of the labor force due to the pandemic.  And even when companies do have diversity programs in place, only about a quarter of employees in diverse groups said they have personally benefited.

So here are three ways that companies undermine their efforts to build diverse, innovative cultures, and here’s what they must do instead.

1.     Diversity Becomes a Recruiting Tactic

Many companies fall into the trap of trying to manage diversity through a “numbers” strategy, hiring more diverse employees (the output) while completely ignoring the broader context within which the hiring, training, and development occur once they are employed (the quality of input). When new hires become “diversity hires” in organizations, they are seen as the faces of diversity for their company, but not as the faces of innovation or as the faces that can help lead the company in the future. Their talent, achievements, and potential are therefore often ignored. This pigeonholing undermines new hires from the very start of their careers. It also damages companies’ ability to build a strong culture that establishes as its foundation high trust, respect, fairness, and objectivity in how employees are treated.

One of the main factors contributing to innovation is a workplace culture that encourages a continuous flow of ideas that can support innovation efforts. And according to Tony Bond of Great Place To Work, “Driving innovation requires leaders to adopt the stance that within their employee population exists an unlimited reservoir of creativity.” And one of the most important responsibilities a leader has is to tap into this reservoir.

Hewlett, Marshall, and Sherbin, in their research, found six behavior that unlocks innovation across the board: ensuring that everyone is heard; making it safe to propose novel ideas; giving team members decision-making authority; sharing credit for success; giving actionable feedback, and implementing feedback from the team. They add that leaders who give diverse voices equal airtime are nearly twice as likely as others to unleash value-driving insights. Employees in a “speak up” culture are 3.5 times as likely to contribute their full innovative potential.

career mentorship and sponsorship
career mentorship and sponsorship GETTY

2.      Lack of Investment in Their Careers

When employees are seen as “diversity hires” in organizations, not only are they not seen for what they can bring to the table, there is also little investment in their careers. For example, once hired, only 26% of Black women say they’ve had equal access to sponsorship, and 59% say they’ve never had an informal interaction with a senior leader at their company. Similarly, 34% of Black men said they had access to senior leaders at work, compared with 49% of White men.

Overall, women in corporate America are 24% less likely than men to get advice from senior leaders, according to a Lean In and SurveyMonkey study. And 62% of women of color say they believe a lack of mentorship holds them back in their careers.

Unconscious bias, which is a bias based on social norms and stereotypes, can cause leaders and managers to make decisions in the workplace in favor of one group to the detriment of others. While everyone likely has some kind of unconscious bias, decisions are being made every day in the workplace where unconscious bias can play in decision making.  Decisions include sourcing and selecting talent, who is invited to the table and who’s opinion is not heard or valued; who receives the better performance ratings or pay increases; who gets the choice assignments; who is mentored and coached for succession and who isn’t.

Since people naturally tend to gravitate to people who are like them, White male leaders may, for example, be unconsciously inclined to mentor and champion other White men to the exclusion of equally talented, diverse employees. Ways to enhance the development, mentorship, and sponsorship of diverse employees include making sure that they receive regular coaching and feedback. They also need to receive advancement opportunities through large and visible projects, mission-critical roles, and “stretch assignments” that advance careers.

3.     Not a Business Priority

To foster the diversity needed to drive innovation and a great culture, companies should reframe the goal of diversity as a business priority, not an HR priority, and then approach the challenge the way they would any other business problem— key metrics and accountability. Data shows that 91% of S&P 500 companies have created a policy to drive diversity and equal opportunity, but only 14% have outlined a set of targets and objectives for diversity. Companies must then ensure that managers are empowered with the skills and tools they need to drive their teams’ diversity, ensure consistency and fairness in their ability to be heard, and to access critical mentorship, networking, and sponsorship opportunities.

 Diversity and Innovation are critical drivers of great cultures in the future of work. Therefore, they are no longer “nice to have.” Instead, they are the bedrock for successful companies, and they work together to create the outcomes that everyone wants. The companies that do this well are the ones who understand that diversity is not a one-and-done recruiting exercise. Instead, it is a commitment to demonstrate the values that they espouse to create a great and sustainable culture that can navigate the future of work.Follow me on Twitter or LinkedIn. Check out my website or some of my other work hereNatalia Peart

I’m a psychologist and business/career reinvention expert.  I specialize in workplace culture, diversity, and innovation, as well as mental wellness and resilience. I

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