More Companies See Inclusion as a Key Driver of Innovation

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Companies have always struggled to develop innovative products, services and markets to generate business growth. However, more companies today see greater levels of inclusion within their organizations as a key driver of innovation, according to a report by The Conference Board.

The report, Inclusion and Innovation: Leveraging Diversity of Thought to Generate Business Growth, is based on a global survey of nearly 200 senior executives responsible for either innovation or diversity & inclusion (D&I), and also includes case studies from four leading companies – Kaiser Permanente, DBS Bank LTD, Saint-Gobain Performance Plastics, and AT&T. The report finds that highly inclusive companies are more likely to have a track record of continual innovation and outperform less diverse organizations. The report also outlines the enablers and barriers to leveraging inclusion to foster innovation.

“It’s a well-accepted business truism that diverse and inclusive groups out-think others with homogeneous membership,” said Mary Young, Principal Researcher, Human Capital at The Conference Board, and one of the authors of the report, along with Chuck Mitchell, Executive Director, Knowledge Content & Quality, and Michelle Kan, Associate Director, Knowledge Organization. “Our research confirms that inclusion and innovation are related.” According to the report, the most innovative companies are more than twice as likely (50 percent) as less innovative companies (19 percent) to describe their organization as highly inclusive.

However, innovation leaders have a different definition of inclusion (focused on country, function, skills and credentials) than D&I leaders, who typically focus on race and ethnicity, gender, age, sexual orientation, disability, etc. While both agree that “diversity of thought” is what drives innovation, they have different ideas about how to get there. A key factor is that D&I and innovation often have little contact. In four out of 10 companies, they rarely or never collaborate. In 71 percent of the most innovative companies, the two functions collaborate often or very often, while in 56 percent of the least innovative companies, they collaborate rarely.

“This disconnect can derail efforts to generate new ideas, products, services, markets, and processes,” says Young. “The good news, however, is that both innovation and D&I have frameworks and tools to help teams achieve diversity of thought. By sharing expertise and aligning their efforts, they can help their companies become more innovative than if the two functions work at arm’s length.”

In addition to case studies, graphics and a range of guides, the report also details what the most innovative companies do. Besides encouraging collaboration and aligning innovation and inclusion efforts, these organizations also:

• Emphasize creativity and innovation as a corporate value or principle;
• Emphasize inclusion as a corporate value or principle and communicate the strategic importance of inclusion;
• Develop managers and leaders to promote idea sharing in teams;
• Offer training to eliminate unconscious bias;
• Create a system where employees can submit their product/process ideas or suggestions;
• Create a culture of innovation by encouraging entrepreneurship and risk taking;
• Ensure innovation teams are demographically diverse;
• Ensure innovation teams have diversity of thought;
• Host ideation sessions or idea bazaars;
• Encourage external innovation networks;
• Adopt a user centric design approach to innovation;
• Use proactive steps to prevent an atmosphere of suppression and fear; and
• Hold all employees accountable for helping to create an inclusive workplace.