Good leaders are humble enough to learn from their team. Great leaders know that the more diverse their team is, the better those insights will be.

There are many, many reasons that we need a more diverse and inclusive workforce. But even if we only look at the issue in purely economic terms, diversity makes sense.

Research suggest diverse teams perform better than a group of workers from similar backgrounds.

The reason for this, according to the Harvard Business Review, is that working with a variety of people sharpens the brain and challenges conventional patterns of thinking. The study also points out that diverse teams are more objective and fact-orientated, leading to better overall decision making.

A study by MIT revealed that shifting from an all-male or an all-female office to one split evenly along gender lines could increase revenue by roughly 41%.

So the numbers speak for themselves. But there is another pressing need to urgently increase diversity. In this time of rapid technological advancement and change, different ways of thinking are more important than ever.

 

A new era

Entire business models are being shaped by innovations such as artificial intelligence, big data, analytics and the increasing number of devices connected via the Internet of Things.

Business 4.0 places a premium on adaptability, innovation and fresh thinking. The leaders who will thrive in this world are those who embrace those approaches.

The Swiss business school IMD has studied what it calls ‘Agile Leadership’. In its report Redefining Leadership for the Digital Age  the school identifies four key qualities of agile leaders – they must be Humble, Adaptable, Visionary and Engaged.

All four are qualities which a diverse and inclusive workforce will actively promote.

 

In this time of rapid technological change, new ways of thinking are more important than ever.

 

Removing barriers

Of course we still have a long way to go.

In the US only 26% of the STEM workforce is female, and for IT specifically that drops to an average of 25% across all developed nations.

Such low levels of participation are caused by a variety of barriers, including gender discrimination, taking time off work for childcare and a lack of opportunity for promotion.

These barriers must be overcome, and not just for the sake of equality: promoting greater diversity across the STEM professions also leads to better results.

The Open University worked with 150 tech firms, including Tata Consultancy Services, for two years to identify the best ways to recruit and retain women.

The research identified three key factors: Partnerships between universities and industry where recruiters reach out to students in subjects other than IT; recruitment campaigns specific to new mothers returning to work; and a family-friendly office environment with flexible working and onsite creches.

Some countries require further innovation to ensure an appealing working environment.

For example, women make up half of all graduates in Saudi Arabia, but their careers are often limited to the healthcare and education sectors because many offices are segregated.

To get around this problem, TCS, Saudi Aramco and GE collaborated to create an all-female office offering a range of services including finance and accounting, enterprise data management, analytics and IT services. More than 900 women now work at the center in Riyadh.

 

Banishing bias

More diverse teams tend to attract and retain the top talent – a key factor in maintaining an edge over competitors.

There is also some evidence that more diverse teams are better at meeting the demands of a broad range of customers. The cosmetics firm L’Oréal, for example, attributes its success in emerging markets to the decision to place executives from mixed cultural backgrounds in the critical activity of new-product development.

With such clear examples of the benefits of diversity, it may seem puzzling why more companies are not making more progress in this area.

Bias – however – is often unconscious.

Leaders naturally tend to appoint people who are like them, seeking out individuals who have previously helped solve a problem, or instinctively favouring people of a similar age or academic background.

Whilst promoting diversity on the one hand, many managers also actively talk about finding team members who will “fit in.”

But that ability to “fit in” is often the enemy of innovation and means that managers are prioritising a conflict-free team over a creative team.

Overcoming unconscious bias requires a conscious decision to step out of the comfort zone and relentlessly challenge prejudices.

There is no single way of doing that, but a greater understanding of the problem, continuous awareness programmes, role modelling and mentors are all part of the process.

Technology can help to reduce biases at the recruitment stage, such as those based on gender, race or age. For example, some companies use AI to assess video interviews and progress candidates to the next stage of the recruitment process.

These companies find that technology selects candidates on skills and attitude, and not on the face and the visual presentation of the person in front of them. And this helps these companies recruit a more diverse workforce.

 

More diverse teams tend to attract and retain the top talent.

The only constant

Companies are not the only ones that need to change their ways. Older workers – and indeed all workers – also need to actively embrace continual change if we are to ensure diversity of age in the workplace.

Even millennials and Generation Z workers can find that their knowledge and skills are being overtaken by newer arrivals to the workforce.

Students who complete a computer science degree today, will find that their first year of study is obsolete by the third year, according to Ericsson’s Geoff Hollingworth.

Change can now happen in a matter of months, he explains, rather than over the course of many years or a lifetime. And some technology-based knowledge can become almost instantly irrelevant once a newer and better technology overtakes it.

Life-long learning and ongoing training will need to become the new norms. As they age, this lesson will apply as much to today’s younger workers as it does to the aging baby boomers.

 

Must try harder

So we all have work to do. From the boardroom down, we need to become more adaptable, more open to ongoing learning, more welcoming of differing views.

The question is not why leaders need to be more concerned about diversity so much as how can any leader afford to ignore it?

With the pace of change increasing, this is a time of unprecedented opportunity. Truly great leaders know that diversity, like technology, is more of an opportunity than it is a challenge.

Diversity makes sense on every level. Those who embrace it will lead the way.

 

The role leaders play in embracing diversity and inclusion is the central theme of the ‘Call to Lead’ summit which takes place in Orlando, Florida on 4 June. This event, which is supported by SAP and Tata Consultancy Services, will bring executive-level attendees together to kick-off the SAPPHIRE NOW® and ASUG Annual Conference, SAP’s innovative cloud and business technology event.