9 Diversity Dimensions That Increase Innovation, and One Reason They May Not

Human resource departments tout diversity, because a diverse company will better represent all of its customers. But how does diversity help creativity? What are the important factors we typically forget?

When we use the word “diversity” in the context of companies, we typically refer to the following definition: “the inclusion of individuals representing more than one national origin,color, religion, socioeconomic stratum, sexual orientation, etc.” In fact, the dictionary gives us the example of the use of the word as “diversity in the workplace.”

Why do we try to achieve diversity at work? First and foremost, to achieve the social goal of equal opportunity in the workplace. Different ethnic groups, different genders, and even different age group employees deserve to have equal opportunity for employment, and not be discriminated against.

McKinsey research showed that the most gender-diverse companies were 15 percent more likely to have financial returns above the industry medians, while the most ethnically diverse companies were 35 percent more likely to have the better financial returns.

A second reason for diversity in companies is that diverse employees better represent the consumers for the company’s products, services, business models, and processes. Including a truer representation of the population will lead to better understanding customers, and creating products that a wider cross-section of the population will use.

However, having multiple points of view as represented by a diverse group of employees can also increase creativity and thus innovation.

But what kinds of diversity are needed to achieve that?

1. Demographic

Demographic diversity is what we typically refer to when we use the word. It includes gender, ethnic / cultural and age diversity. While its initial focus is on fair employment, this diversity does increase the understanding that a company has of a broad and diverse customer base, but also does increase creativity through different perspectives due to those different backgrounds. Men may not be able to understand women clothing (for the most part), and baby boomer employees may not be able to create products that millennials will consume.

The next 8 factors are not considered the “classic” diversity, will not be monitored by the human resources department for fair employment practices, and will have marginal impact on understanding customers, but will significantly increase creativity due to the different points of view brought to the team.

2. Multi-disciplinary and cross-functional

If the team is involved in an engineering project, the participants will typically be engineers, mainly of the specific discipline required for the project. However, going beyond “tier 1” of disciplines will enhance creativity. The hardware design team of a product typically includes only hardware engineers. Including software engineers (“tier 2”) will allow developing products that make software design easier. Including mechanical engineers (also “tier 2”) will help assuring a compelling form factor for the product. Including finance, human resources, and others (“tier 3”) will provide insights from other disciplines that will overall increase the quantity and quality of ideas considered.

3. Knowledge & Education

Even if different team members are from the same discipline, they may know (or have studied) different aspects of the project at hand. Having different knowledge can give yet again different perspective on similar things.

4. Experience

Much like different knowledge and education, diversified experiences increase team creativity. When you walk into a room to see a team of 5 who worked together in the same company and same business units for more than 20 years–you will not get diversity. All team members will think alike. When your team is made of members who worked in very different business units and possibly different companies–you are assured to increase team creativity.

5. Generalists & Specialists (Breadth vs. Depth)

Some know little about a lot (generalists), while others know a lot about little (specialists). There is a limit to how much we know and have experience with, and throughout our careers we balance breadth with depth. No doubt that you need matter experts to completely solve a problem, but it is the generalists who bring solutions from remote disciplines and allow the solutions to be disruptive and novel.

6. Extra-curricular interests

Whether we like it or not, we bring our extra-curricular activities to the workplace. Be it surfing, cooking, shooting, riding motorcycles–we are the sum of our experiences, and those experiences, even if not directly related to the problem at hand, can help formulate different solutions to problems.

7. Cognitive Preferences

Different people think differently. Some are introverts and need time alone to produce ideas they can later bring to the team, while others (myself included) need the other team members to bounce ideas off of, and to be sounding boards. Some prefer the “shotgun” approach of producing many ideas in many different directions, while others prefer the “rifle” approach of finding a very specific solution to a very specific and well-defined problem.

8. Risk taking

Some are willing to take more risk than others. Those are the ones who push the team to try new things, to experiment, and not rule out anything until it blew up in their hands. Others are very careful and assure that the final product is safe for the company’s health.

9. Visionaries vs. Pragmatists

Finally, some are optimistic visionaries who can only see what can be done, while others balance them with more pragmatic attitudes. Both are needed. However, you need to be cautious with “devil’s advocates,” people who only see faults in everything. Your team need to see upsides and downsides, but to be productive and creative avoid having members that only see the negative, and what cannot be done.

The ability for a team to see a problem (as well as the solution) from different sides dramatically grows as diversity increases. To increase this diversity, select team members that are as “orthogonal” and complementary to each another on as many dimension as possible.

Having said that, diversity can also delay team bonding and the development of trust, which is so desperately required for the ability to argue freely and built on each other’s ideas. As hard as it may be–it is still worth it

But: Diversity and Trust

In my research of trust, I found Shared Values to be an important contextual element of building trust. Within the elements of shared values, there is the one of shared culture. Cultural elements, if they are shared, can increase trust.

• If all team members share the same cultural background as the rest of the company, trust would be built at a normal pace. Diversity will be lower, thus reducing innovation somewhat (no differing perspectives), but trust will allow building a culture of innovation, and therefore innovation.
• If all team members share the same culture among themselves, but it is a different culture than the rest of the company, that difference might actually work to galvanize relationships and thus trust within the team.
• If most team members share the same culture among themselves, but a few team members will share a different culture, quickly the team will break into groups, as members will feel more comfortable “among their kind.” There would be trusting relationships within those groups, but not between the groups in the team.
• Finally, if some of the team members share the same culture, while others don’t share cultural backgrounds with anyone on the team, those would end up being the “outcasts,” while a small group would have a stronger trusting relationships among themselves.

Where trust doesn’t develop, neither does innovation culture, or innovation. Even if there is diversity of perspectives.

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Dr. Yoram Solomon is an inventor, creativity researcher, coach, consultant, and trainer to large companies and employees. His Ph.D. examines why people are more creative in startup companies than in mature ones. Yoram was a professor of Technology and Industry Forecasting at the Institute for Innovation and Entrepreneurship, UT Dallas School of Management; is active in regional innovation and tech transfer; and is a speaker and author on predicting technology future and identifying opportunities for market disruption. Follow @yoram