Have you ever had tacos al pastor?
It is one of the most popular street foods in the United States, so chances are at some point you have been able to get your hands on these tacos, filled with pork marinated in a combination of chilies, spices and pineapple, and roasted on a spit.
While the dish originated in Mexico, its origins can actually be traced back to a wave of Lebanese immigrants that traveled to Mexico in the late 19th century, bringing with them the Arab version of the dish: shawarma. By the 1960’s, the Mexican-born children of these immigrants began opening their own restaurants, combining their heritage with Mexican cuisine and thus a new (and delicious) dish was born.
Tacos al pastor is a perfect illustration of how the coming together of people from different ethnicities with different experiences leads to innovation, but it is hardly the only one. From banh mi to hip-hop, we are surrounded by products of diversity resulting in innovation. Look at the most innovative and prosperous urban centers in the world –– New York, Dubai, London, Singapore –– while vastly different in many respects, what they do have in common is that they are all international melting pots with a high concentration of immigrants.
While it is pretty easy to subjectively see the positive impact diversity has on innovation all around us, with businesses the notion can be harder to prove or quantify, especially when it comes to measuring how diversity affects a company’s ability to innovate. Most leaders accept that their businesses can benefit from a diverse workforce –– according to a survey of corporate directors conducted by PwC, 83 percent believed that companies should be doing more to promote gender and racial diversity. However, only 16 percent of them believed their own companies scored “excellent” for recruiting a diverse workforce, and an even lower 15 percent felt their companies were excellent in developing diverse executive talent. Clearly, there is a disconnect between the perception of how diversity can positively impact a business and the steps taken to integrate diversity into a business.
However, according to Richard DeVaul, it is critical to recognize that diversity of thought is needed in order to develop creative solutions to problems, and diversity of thought comes from diverse training, background and life experiences. An M.S. and Ph.D graduate of MIT Media Lab, DeVaul started and led projects that created billions of dollars of enterprise value at X Development (formerly Google X) and in the venture-backed startup world. He hopes to educate individuals and companies alike on how they can achieve true innovation, and for him diversity is essential to that quest.
Research is growing
When one thinks of diversity what often comes to mind are inborn traits such as age, gender, ethnicity, race and sexual orientation. However, there are other types of diversity one gains through experience that can be just as important. These can include areas of study, industry background, career path, and even veteran status and foreign work experience, and businesses can benefit from attracting, developing and retaining a diverse workforce that includes a mix of both inherent and acquired traits. For DeVaul, smart leaders should understand that building and supporting a welcoming and inclusive culture makes talented people want to join the company and stick with it.
It may be difficult to quantify just how diversity affects innovation, but as diverse and inclusive company cultures are proving to provide companies with a competitive edge over their peers, studies by economists, demographers, and research firms have grown, seeking to confirm that socially diverse groups are more innovative and productive than homogeneous groups. In 2019, research analysts at The Wall Street Journal created their first ranking of both corporate sectors and the individual companies in the S&P 500 index based on their diversity and inclusivity. They found that the 20 most diverse companies in the research not only had better operating results on average than the lowest-scoring firms, but their shares generally outperformed those of the least-diverse firms.
Innovation starts with an idea that solves a problem, and the more diverse a team is the more likely it is that the solutions they come up with will be innovative. A team that is more homogenous is much more likely to experience a sense of complacency and sameness that can inhibit innovative thinking, but diversity requires us to utilize our cognitive abilities at higher levels than homogeneity. When there are differences amongst team members each person must automatically look at their own viewpoints more critically, knowing that there will likely be alternative and unexpected ones to consider and evaluate. Additionally, with a diverse range of people comes a diverse range of communication styles, meaning that in order to properly convey their own ideas people will need to broaden their own views in order to effectively communicate. This way may take more preparation and effort, but the resulting consensus will be significantly more valuable.
When members of diverse teams see things in a variety of ways, they are also poised to recognize new and different market opportunities, and they can better appreciate unmet market needs. Scientists at L’Oréal USA conducted a research project focused on a foundation for women of color. Balanda Atis, group leader, research and innovation at L’Oréal USA, was seeking to shed light on the problem non-Caucasian women face in finding a shade of foundation that matched their complexion. By conducting a series of national studies interviewing women and measuring skin tones, Atis and a team of scientists were able to demonstrate scientifically that women of color have specific needs. Without the insight and knowledge of markets Atis provided, the company would have inevitably continued to formulate their foundation for darker complexions without this new knowledge rather than innovate.
Gender diversity has also been shown to drive results. With women controlling 51 percent of wealth in the United States and 40 percent globally, they are well-situated to know and understand market opportunities. According to Bloomberg, companies with gender-balanced teams have a higher return on equity, and the Credit Suisse Research Institute found that companies with one or more women board members had higher average ROI and better average growth than companies with male only boards. Companies need a comprehensive plan for supporting and advancing women. According to DeVaul, this requires a paradigm shift in the corporate culture which will include investing in employee training and giving employees greater flexibility to fit work into their lives.
Building a diverse and inclusive business is a key factor in building an innovative one. More than just hiring to meet certain quotas or for appearances, the culture must match the workforce, enabling each employee to know their voices will be heard, regardless of their age, background or experience level. Encouraging team members to voice their own perspective derived from their unique outlook drives both the insights needed for innovation and the creativity to assess new markets and examine existing markets in new ways. Great products and solutions are born of diversity, meeting at the intersection of ideas, experiences and challenges.