How Diversity Fuels Innovation and Business Performance


October 11, 2022

I remember the first day I walked into my engineering classes as a college freshman. Within a nano-second it was clear there was no one else like me in the class. 

“Like me” meaning I was the only woman. 

As I walked through the door at the front of the room, my gaze instantly went up the wall of theater seats filled with nothing but men. My male professors made jokes about “guy stuff” to illustrate concepts. When I asked them to explain something in more detail, they pointed me to one of the all-male teaching assistants. My advisor was a man. The only women I saw in the entire college of engineering were the secretaries.

Fast-forward three decades and women still only earn 20% of engineering degrees. It certainly isn’t because women aren’t smart or capable enough. I imagine many women go after other degrees because they feel like I did; I loved the classes, but it was exhausting to constantly feel like the outsider. To never hear examples relevant to me. And even if I outperformed my peers, professors ignore my raised hand and called on the guys in the room. 

I switched my college major and went to work in marketing. Because I worked in engineering-led fields (architecture, engineering, construction, and technology), I still commonly found myself the only woman at the table. I saw glaring gaps in strategy and execution that my middle-aged white male bosses were oblivious to, even if they had the best of intentions. 

Then I had my first taste of true diversity. I worked for a woman CEO in tech, Larissa Herda. She tapped so many women for the upper ranks that I had to rethink my own beliefs. There were people of color and orientation in all corners of the business. This was not only what I thought a company could look like, but what it should look like. 

Larissa was never one to check the box. When she focused on diversity, she meant across the board. When it came to equity, she made sure that it covered all the bases. When it came to inclusion, she made it clear it wasn’t an afterthought.

She’d worked her way through sales to get to the corner office. She was no stranger to being the only woman in the room. I imagine that’s why I related to her so well.

But it was her approach to business and what DEI meant that’s had the longest lasting impression. When she took over as CEO, the company had $26 million in revenue. Larissa led its growth to $1.6 billion before its sale. 

The company was well-respected for its leadership, innovation, and business performance. But behind it all was Larissa’s commitment to diversity that made it all a reality.

Diversity fuels innovation and business performance

Building a culture of innovation means being open to ideas, no matter who or where they come from. Studies show that inclusion particularly boosts innovation as well as outcomes, by association.

For example, Columbia Business School Professor Katherine Phillips talks about how diversity pushes us to think about new approaches that a like-minded team could never do. Diversity helps groups to solve problems with fresh perspectives. It challenges people to think outside their normal boxes. 

Once diversity fuels innovation, it then fuels business performance. The creative ideas and strategies that pop up in work teams show themselves in the business’s performance results. Diversity-led innovation improves your business advantage

According to Forbes, when diverse teams see diverse ways of viewing something, the team is prepped to see market opportunities – that’s something Larissa knew very well and perpetually encouraged. These teams also really understand what customers need but aren’t getting yet. The more diverse your team, the more diverse your ideas, and the more ideas you’ll have. And ideas are what innovation is made of. 

For example, your team may be trying to solve an issue: developing new school supplies for kids. A team that doesn’t have a lot of diversity might create supplies that work best for a certain group, like a 12-pack of long-lasting erasable colored pencils for $13.99. 

With a diverse team, you can get ideas that aren’t just innovative but also open up more markets. For example:

  1. Team members with different skin colors suggest including colored pencils in various skin tones.
  2. Another team member, a single mother who raised her children with little income, suggests marketing the pencils at a lower cost because many parents can’t afford trendy school supplies. 
  3. A team member with vision problems suggests the names of colors be printed in large, bold text so all readers can easily read and know the color names.

The results? The fewer, more expensive pencils might sell well in upper-class white neighborhoods, but the inexpensive, larger pack of pencils might be popular to more customers in a wider range of places. This taps into markets most companies routinely dismiss and ends up reaching more people. This kind of diverse thinking doesn’t just fuel innovation. It also shows up in the company’s performance – in this case, sales.

One is the loneliest number

There are so many rich opportunities that companies miss when they don’t throw their doors wide open to diversity, equity, and inclusion. When employees feel they’re the only ‘me’, whether that’s in a classroom or a boardroom, they hold back. They don’t share perspectives, ideas, or insights. Sure, it may make things more efficient and there’s less friction. But nobody wins. No one’s encouraged to think differently, to connect with each other in different ways, and to tap into what inspires them. Teams lack true trust and cohesion. Companies miss opportunity after opportunity. And customers miss out on being served at the level your company’s fully capable of doing. 

It’s time we let DEI take it’s true place as the innovation and business accelerator it’s proven to be. 

Your next steps

Bringing more diversity to your innovation program doesn’t have to be complicated or time-consuming. Here are three ways you can get started today…

Recruit and promote diverse employees of all levels and backgrounds. Is there diversity in the leadership of your company? Do executives all come from ivy-league schools? Tech startups? The same part of the world? Are managers and staff too similar? What’s the age range of employees? Observe diversity from all angles and look for opportunities you’re missing now.

Think about belonging. When training staff or talking about inclusion, dig deeper. It’s one thing  to know that you’re creating an inclusive culture, but another for people to actually feel comfortable and a sense of belonging. 

Celebrate the outcomes. Initiatives like DEI can feel like more work being added to people’s already overflowing plate. This isn’t about doing more work. It’s about doing the work that already needs to be done better, with more innovative thinking, and bigger results. When you celebrate the outcomes of how diversity positively impacts innovation and the business, it’s easier for everyone to see how to connect the dots.

Start creating your own culture of innovation. Download the first three chapters of my book, RE:Think Innovation.

Photo credit: iStock

About Carla

Carla Johnson Innovation Creativity Speaker Author

Carla Johnson helps leaders who are often paralyzed by traditional thinking. They suffer from slow growth, an eroding competitive advantage, low employee engagement, and depleted investor confidence. Their teams lack purpose and progress and constantly battle a resistance to change and new ideas.

As the world’s leading innovation architect, Carla’s spent 20 years helping leaders shatter limits and discover undiscovered possibilities. Through years of research, she’s developed a simple, scalable 5-step process that teaches people how to consistently produce inspired ideas that lead to uncommon outcomes.