The Strategic Diversity and Innovation Connection
Companies are engaged in the race to be faster to market, to find better methods to satisfy customers and to be more profitable. The search for a competitive edge is a daily undertaking in most companies.
Two business solutions that are getting a lot of play in the global business community as key factors in driving sustainable results are strategic diversity and strategic innovation. Let's take a look at how closely related these two business solutions are.
Strategic diversity is the creation of an inclusive environment that values people and utilizes their wisdom and creativity to achieve results that are aligned with the business drivers and strategies.
Strategic innovation is a process to bring new ideas, new methods or new products to an organization. It is about creating new value and/or capturing value in a new way.
Some key components shared by both business solutions are:
People
Diversity is all about understanding and building relationships with diverse people (employees, customers, communities, networks). Innovation attempts to unleash the creativity of people in search of an idea that might add value and relevance to a company. In his book on innovation, "The Medici Effect," Frans Johansson provides many examples that support his statement that "Diversity allows different viewpoints, approaches, and frames of mind to emerge."
Results
Strategic diversity and innovation ultimately are about adding value and getting desired business outcomes. Diversity and innovation working together in an integrated way can get the right people working in the right ways to find new solutions that will drive business results.
Leadership
Innovation and diversity both need leadership that is committed to integrating these two into the everyday business routine. Without the visible leader, credibility of the effort and limits on the potential benefits occur. To champion the national goal of boosting innovation, China's president pledged to increase overall spending on research and development to $115 billion a year by the year 2020. And with this pledge, companies, both foreign and domestic have responded by investing R&D in China.
Metrics
A challenge for diversity and innovation has been measuring their impact on a business. In the past three decades in diversity work, we have learned that we need an index or several key measurements, the closer the tie to strategic business goals the better. Also, a balance between quantitative and qualitative data presents a clearer picture.
Innovation work is experiencing the same questions and scrutiny. Some metrics in this area are revenue growth from new products, measuring the volume and quality of idea submissions, and patent submissions.
A classic example of measuring diversity and innovation at work is the S&P/BusinessWeek Global Innovation Index, which includes companies such as Apple and Google of the United States, Toyota and Sony of Japan, and Nokia and BMW of Europe. The index has consistently outperformed the S&P Global 100 since 2005 by 5 percent and last year did better by 7 percent. Diversification - of workforce, of leadership, and in this case of corporations - is key to optimizing performance. And innovation is a key defining factor for success.