Include & Innovate: How D&I will drive innovation in 2016 and beyond

Media releases

In the wake of the release of the Australian Government’s National Innovation and Science Agenda, many businesses will be thinking about how they can generate the innovation needed to harness future sources of growth. Diversity and inclusion in the workplace is a key driver for innovation, and businesses must start laying the ground work now, according to Diversity Council Australia. 

DCA’s CEO, Lisa Annese, said there is a clear link between diversity and innovation.

“A diverse workplace will by its very nature generate different ways of thinking and new perspectives, and that’s a pretty important ingredient for innovation. But it’s not just about diversity – it’s also about inclusion.  A growing body of international research by DCA and others, shows that inclusive workplaces and inclusive leaders are linked to greater creativity and innovation. 

“They key takeaway for organisations is this – if they are really interested in innovation, they should consider their D&I programs as key drivers,” said Lisa.

What the research says:

  • Successful companies understand that diversity is a key driver of innovation and a critical component of success on a global scale. This link is most strongly recognised in large companies with more than US$10 billion in annual revenues and in the Asia-Pacific.[i]
  • Diverse teams are better able to solve complex problems. A diverse team has a far better chance of generating unlikely idea combinations that can be truly ground-breaking because people from different cultures and backgrounds approach any given challenge from different perspectives. One study of 28 teams found those that were heterogeneous solved complex tasks better than the homogeneous teams.[ii] 
  • Cultural diversity is linked to creativity and innovation. People with global experience and those with multicultural identities display more creativity and are better problem solvers and more likely to create new businesses and products. Culturally diverse teams can access a deeper and wider knowledge bank, leveraging this to generate new ideas, products and creative solutions.[iii] 
  • Gender diversity is linked to performance and innovation. Research examining 15 years of panel data of management teams of S&P 1500 firms, has found that more women in top management improved the performance of firms which were heavily focused on innovation.[iv]
  • Innovation is associated with flexible working. Innovation is linked to flexibility and high performing workplaces (which are characterised by flexibility in thinking). A workforce with a high level of flexibility capability can be leveraged to increase innovation and to respond quickly to changing business demands.[v] 
  • Inclusive leadership encourages innovation. Teams with inclusive climates have higher levels of innovation and profit. Having a flexible rather than fixed view of one’s own and other’s identities – a key attribute of inclusive leadership – is associated with greater creativity and improved innovation.[vi]

What organisations need to do:

Below are DCA’s top ten tips to drive innovation through a more diverse and inclusive workplace.

  1. Take stock of your workplace to see how diverse and inclusive it really is and where the gaps are.
  2. Understand and articulate the D&I business case to your people to engage them on the journey. 
  3. Implement a robust D&I strategy with measurable objectives and make people accountable for achieving them. 
  4. Take advantage of smart and flexible work technologies and make them available to men and women across all levels of your organisation. 
  5. Address biases in recruitment and retention that may be preventing women, people with a disability, Indigenous Australians, mature-age workers, people from culturally diverse backgrounds or same sex-attracted people from joining or staying at your organisation.
  6. Value global experience, language skills, and insight into diverse communities and cultures to help you broaden your market reach, locally and abroad. 
  7. Build genuine engagement and trust with Aboriginal and Torres Strait Islander communities to develop mutually beneficial partnerships and better capitalise on Indigenous talent. 
  8. Focus on expanding opportunities equitably across STEM based areas of your business – remember, over the next few decades, close to half of today’s jobs will cease to exist.  Ensure that your company is developing and connecting with diverse technologists, investors, thought leaders and entrepreneurs.  
  9. Ensure that a wide range of employees are provided with key leadership development opportunities such as operational or ‘profit-loss’ experience.
  10. Think beyond the usual suspects when filling leadership roles, and question how you are measuring merit.

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[i] Forbes Insights, 2012, Global Diversity and Inclusion: Fostering Innovation Through a Diverse Workforce Retrieved from http://images.forbes.com/forbesinsights/StudyPDFs/Innovation_Through_Diversity.pdf 

[ii] DCA’s Capitalising on Culture: A Study of the Cultural Origins of ASX 200 Business Leaders, 2013.

[iii] DCA’s Leading in the Asian Century: A National Scorecard of Australia’s Workforce Asia Capability, 2015. DCA’s Cracking the Cultural Ceiling: Future Proofing Your Business in the Asian Century, 2014.

[iv] C.L. Dezsö and D.G. Ross, ‘Does Female Representation in Top Management Improve Firm Performance? A Panel Data Investigation’, Strategic Management Journal, vol. 33, 2012, pp. 1072–1089.

[v] DCA’s Get Flexible: Mainstreaming Flexible Work in Australian Business, 2012.

[vi] DCA’s Building Inclusion - An Evidence-Based Model of Inclusive Leadership, 2015.