Diversity is good for business – it’s a fact.
Research done over the past few years has shown that having people of different genders, ethnicities, sexual orientations, ages and physical and mental abilities within your organisation is good for all sorts of things from innovation1 and creativity to engagement and retention2.
Ultimately, it has a very positive (and measurable) effect on your bottom line.
In a study published in 2015, for instance, McKinsey & Company showed that companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians than those in the bottom quartile3.
In 2019, Credit Suisse published a study of 30,000 senior executives at more than 3,000 companies around the world. It found that companies in which women held 20% or more of the management roles generated 2.04% higher cash flow returns on investment than companies with women in 15% or less of the management roles4.
And in the same year, researchers examined data from the Human Rights Campaign’s Corporate Equality Index and found that organisations with policies banning discrimination based on sexual orientation and gender identity were more likely to experience innovation and increased performance5.
I could go on – there’s a lot of research out there – but, instead, I’ll just point you towards a very comprehensive list published by the US non-profit Catalyst in its recent Why Diversity and Inclusion Matter research, demonstrating a range of proven benefits that can help you to build a convincing business case for diversity6.
So, it’s clear that what we could call the traditional, physical forms of diversity are more beneficial than the ‘PC-gone-mad’ brigade would have us believe. That’s always assuming, of course, that organisations take the logical next step and create an inclusive environment that allows a diverse workforce to really shine – otherwise they’re simply paying lip-service to diversity and aren’t going to reap its rewards.
But what about the less obvious diversity that comes with bringing people into your organisation who think differently, hold different views, and have different skillsets – cognitive diversity? Does this have an impact on the bottom line in the way that getting more women into senior executive roles does?
Although cognitive diversity is a relatively new focus for organisations and their managers and recruiters, there are some studies and a lot of literature on its benefits.
A study done in 2017 by academics from the Ashridge and London business schools, for example, found that the most cognitively diverse teams consistently outperform more homogenous ones7 and leadership coach Janine Schindler MCC is very clear about the benefits that she believes cognitive diversity brings, from more creativity and innovation to increased productivity and engagement8.
So, the answer would appear to be yes, cognitive diversity does have a tangible business benefit. But it can be even harder than other types of diversity to achieve: there’s a natural tendency for managers to want the validation and comfort of team members who act and think like them, for HR to recruit people who ‘fit’ culturally, and for organisations to expect employees to accept that ‘this is how we do things round here’.
It takes a lot of courage to step outside the comfort zone of conformity and fill your teams and organisations with mavericks. Managers have to be prepared to deal with conflict and make it constructive rather than destructive, and to receive criticism and push-back. Organisations may see their cultures disrupted and their norms challenged. Both need to be prepared for change.
But cognitive diversity is an effective weapon against the stagnation of groupthink and the dangers of homogeneity, especially at the top level. For example, if an organisation needs to refocus but its senior leadership team is full of people who are good at formulating strategy and has no one with the skills and mindset to be able to successfully implement that strategy, nothing will get done.
Having a diverse group of people leading an organisation, who can produce and develop strategies, sell them to the rest of the organisation, and put them into action, means that great ideas are being turned into reality and the organisation is driving forward.
The same is true at a team level – a group of people who can see things from different perspectives and are willing to challenge each other are going to be more innovative, creative, engaged and productive.
Balanced teams, with the right mix of skills, perspectives, approaches and mind sets, are the key to getting things done.
To find out how Capita can help you to achieve the cognitive diversity that gets things done in your organisation, email Steven Bell.