Creating deeply innovative organizations needs to replace the more simplistic view of creating organizations that are technically innovative, but perpetuate a business culture that is toxic and destructive. Too often this gets ignored until there are legal, financial, or public relations consequences at hand. As a result, brand risk management innovation has yet to, in most companies, expand beyond this limited framework for assessing and addressing toxic and destructive issues. Brand risk management is still seen primarily through the lens of risk aversion and exposure to legal liability, and innovation is mostly understood exclusively through the lens of technological innovations. This is how glaring blind spots remain present in the cultural mindset and become institutionalized. Alternatively, those who embrace the importance of diversity inclusion in fostering innovative organizational cultures reap its rewards.
- 85% of CEOs whose organizations have a lived diversity and inclusion strategy say it has enhanced performance.
- Highly inclusive organizations rate themselves 170% better at innovation
- Improving organizational cultures means less employee absenteeism
- These organizations also have greater employee retention
- Intentionally fostering inclusion makes companies 45 percent more likely to increase market share.
Step Up: Obstacles and challenges
Innovation requires the capacity to see things in an unexpected way. Uniting unique perspectives from different backgrounds, frequently is the catalyst for forward thinking solutions, and this is the place diversity inclusion is required. Furthermore, research shows that innovation requires an environment in which all ideas can be considered regardless of their source. Oppositional issues typically manifest as lawsuits and public shaming on social media following individuals within an organization acting on their own personal bias. Despite having policies that denounce discrimination and bias, companies like Hilton, Starbucks, and Toyota have all paid big this year… both in actual dollar terms as well as lost social capital the brands had built in prior decades. At the same time even some of the movers and shakers of the technology industry have been dethroned by reports and allegations of sexual misconduct and discrimination.
So why do we see this again and again from companies who boast policies promoting inclusion and respect?
Because people within their organization, the ones who literally define what the organization is in real terms, have been unable (in too many cases) to identify their personal bias and choose a better course of action in order to experience the transformation of personal growth.
What we have had are business cultures shaped by societies still grappling with legacies of oppression and exclusion.
Cost of the status quo over innovation
Because business decisions are driven, in many cases, primarily by profitability and risk aversion. This is part of the flaw in that approach to brand risk management and a reason why innovation is so needed sooner rather than later.
There was an experiment where a resume with a black sounding name received half as many callbacks as the same resume with a white sounding name, even when it was sent to corporations with strong diversity reputations. Technology has made the world smaller and it has also increased transparency in many instances. Since it has been clearly established that diverse perspectives are key to innovation, what is the value to be won when discrimination is essentially normalized?
“There’s a price to be paid for workplace discrimination-$64 billion.
That amount represents the annual estimated cost of losing and replacing more than 2 million American workers who leave their jobs each year due to unfairness and discrimination.”
Welp, Michael. “Workforce Discrimination Is Costing Business $64 Billion Every Year”
What is more difficult to ascertain are the impacts on the individuals discriminated against. The ripples set in motion continue as evident by the current state of things. Looking back at the tech sector that is typically where folks turn to get a sense of what is on the innovation front lines. There are disturbing consequences, beyond the obvious, to the toxic and discriminatory tech culture noted in places like Silicon Valley.
“If we don’t do this now, all of these biases and discrimination will be rewritten into the algorithms and AI and machine learning that is powering the tech of the future. Already, facial recognition technology is basically sexist and racist. It doesn’t recognize women and people of color the same way that it recognizes white men. That’s a big deal.”
McGrane, Claire. Emily Chang on the ‘Brotopia’ of Silicon Valley, and how companies can tackle a toxic culture
The past is connected to the present. Today is that the foundation for the long run. and since the response by several leaders is usually a band aid approach progress has been slow and painful. The truth is hearts and minds can’t be legislated by external forces, new policies and laws will have painful limits do most. The path forward is a deeply personal one as a result of the outcomes mentioned here all emerge from a deeply personal place inside the people concerned.
The simple solution starts with leaders. Smart leaders need to embrace personal innovation in order to lead by example. Policy statements or diversity training that make things worse, or provide short term remedies no longer pass as solutions. Too many studies have shown those approaches don’t work. But a leader who shows the courage to step up with personal innovation can cultivate a meaningfully innovative organizational culture that seems to naturally increase market share, roll out products and services that lead your industry and play a vital part in creating a better world.