Greenhouse Masthead

Diversity in the age of disruption

Catherine Carter

While the business world is being urged to “embrace disruption” – and our own Prime Minister has said so many times – most organisations tend to be collections of like-minded people, who come from similar backgrounds and educations. When they all get into a room together, they tend to agree. 

What our companies need is a dose of diversity to drive business innovation.

A new study from the La Trobe Business School released to coincide with International Women’s Day in March has found that publicly listed companies that employ more women on their boards make more money.

The study, which examined 300 of Australia’s top 500 listed companies between 2005 and 2011, found conclusively that women on boards positively affect performance, rather than better-performing firms simply employing more women.  Other research is equally emphatic: a diverse workforce creates an environment where innovation can flourish.

Ronald Burt, a sociologist at the University of Chicago, has published a number of studies which indicate that people with more diverse sources of information consistently generate better ideas. In fact, each percentage increase in the rate of racial diversity leads to an increase in sales revenues of around nine percent.

 MIT’s Sara Ellison has demonstrated how mixed-sex teams produce more creative solutions than those dominated by one gender, and Deloitte’s latest Global Human Capital Trends report has found that corporate leaders are looking at diversity not as a compliance obligation but as a business strategy – one that is an antidote to ‘groupthink’.

 Global aerospace business Lockheed Martin credited the role of diversity and inclusion as central to innovations in clean energy technology, next generation lithium ion batteries, green IT systems and smart grid solutions.

 These advances were “only possible because different people with unique perspectives looked at these challenges in new ways,” says company chief Marillyn Hewson. “Innovation is powered by diversity and fostered by inclusion.”

 Companies founded on innovation ignore diversity at their peril – which is why the tech giants are scrambling to rebalance their predominantly white, male workforces. While Google has found its most diverse teams are the most innovative, the company’s HR chief Laszlo Bock has admitted that “Google is not where we want to be when it comes to diversity,” and has dedicated US$265 million over the last two years to unconscious bias training, among other diversity initiatives.

Over at Apple, CEO Tim Cook has said “we rely on our employees’ diverse backgrounds and perspectives to spark innovation” and has publicly shared its illuminating diversity statistics. The number of women employed with Apple has risen from 27.7 per cent in 2014 to 30 per cent in 2015, and small improvements have been made to ethnic diversity. But African Americans and Hispanics, who make up more than 30 per cent of the US population, represent only nine percent of Apple’s leadership.

Closer to home, Australia’s property giant Lendlease is taking action on diversity too. A line-by-line review of salaries uncovered real-world examples of the gender pay gap which have since been addressed. Every employee will be undertaking unconscious bias training over the next 12 months, and 41 per cent of employees now work flexibly.

Lendlease’s chief executive officer Steve McCann has flexibility – a characteristic deeply intertwined with diverse workplaces – must be planned and costed into every project. He says diversity must be viewed as a “non-negotiable” alongside safety. “Up front it might look more expensive, but I can tell you it won’t be,” he says.

 In our deeply connected and globalised world, it should be no surprise to us that diverse companies are better able to identify opportunities, and are achieving better performance as a result. Instead, we should be surprised that 12 per cent of ASX 200 companies still do not have a woman on their board.

 Will these companies be able to navigate the age of disruption? Only time will tell if investors are willing to put their money on it.

Feature image by Martin Ollman

Catherine Carter

A lover of books and beauty, a seasoned traveller and creative thinker, Catherine is passionate about Canberra. Catherine is intensely interested in how Canberrans can work together to create an amazing city, and how our built environment can provide the places our community needs to flourish. The mother of twins, Catherine is committed to diversity, and supporting and promoting the careers of women. She was the recipient of the Telstra Business Women's ACT Community and Government Award in 2010. More about the Author

Throsby Leaderboard