Innoversity: Innovation and diversity in enterprise

Yanire Braña. Professor. IE Business School

29 May 2008

Forget established patterns of behaviors. Innovation plays a key role in growing a business and making it profitable. But companies also have to remember to include diversity in the equation.

In an age where attracting talent and brand power are fundamental, many companies have been forced to cultivate their uniqueness, looking for new ways of developing the values and factors that enable them to do just that. Accordingly, they turn to innovation as the only way to maintain or create a new competitive edge that can be sustained over time.

The most innovative enterprises are aware that innovating is not simply creating or modifying products and services, but rather it is sometimes important to create an infrastructure of people and processes that allows them to respond to all their current and future needs.

The need to grow their business and making it profitable makes companies occasionally focus exclusively on their competitors, customers and employees, but what happens with other factors? Business reality tells us that customer retention and loyalty strategies are often designed but that they do not always include employees and often overlook an important potential market: non-customers and non-employees. Then there are the difficulties involved in learning about this particular segment, which is the result of massive demographic, economic and sociocultural change and often fails to present the kind of segmentation criteria that makes for in-depth knowledge. New technologies make it easy for enterprises to see beyond their traditional sources of advantage, but sometimes this is not enough to actually innovate or the renew competitive advantage. In order to maximize all the options, companies also need to invest in discovering the differences among their customers and employees that can take them beyond existing demand and open up the door to a new mass of customers and employees that did not exist until now.

This investment usually involves new patterns of interaction, communication and decision-taking that can be used to transform resources into high-value products and services. To deal with these changes and to increase the possibilities of success, it is essential to have access to a combination of tangible resources (such as people, equipment, technologies and money), as well as to less tangible resources, such as the product design, information, brands and relations with suppliers, distributors and customers.

Although the objectives and benefits of innovation seem obvious, when they are put into practice, people often overlook the different working parts, i.e. the basic ingredients of the innovation process. There is nothing new in the idea that in order to stimulate new ideas, events, experiences, possibilities, knowledge, outlooks and skills, certain capacities are necessary that make it possible to look for new ways of maintaining competitive advantages. It’s called diversity for innovation.
However, the kind of diversity that is truly important for fostering creativity and innovation is not skin colour, religion or gender, but rather the different perspectives or ways of seeing the world, experiences, capacities and ways of thinking. This intangible diversity, which is occasionally associated with different genders, profiles and nationalities, contributes to a genuine change of culture and the way people see a business.
However, whether diversity has a positive or negative impact on the enterprise´s performance will depend on strategic, cultural, organisational factors and human resource management practices. Consequently, a preliminary stage to the development of innovative diversity policies is communication and training in diversity management, which should always be linked to the company’s business.

Diversity is an important part of innovation, but innovation is necessary to strengthen diversity, and that is why firms have to invest in diversity. The basic reasons that can lead the company to promote and manage diversity include the need to respond to requirements from increasingly diverse customers, a lack of talent which means firms have to look for and make full use of every employee´s capacity, and the improvement of results through multidiscipline team management.

Today, many leading enterprises are aware of the importance of designing innovative strategies to foster diversity management, and are duly promoting the creation of environments that uphold respect and inclusion in every area.

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