How diversity makes teams more innovative
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0:02 - 0:03Fifteen years ago,
-
0:03 - 0:08I thought that the diversity stuff
was not something I had to worry about. -
0:08 - 0:12It was something an older
generation had to fight for. -
0:13 - 0:17In my university,
we were 50-50, male-female, -
0:17 - 0:19and we women often had better grades.
-
0:19 - 0:23So while not everything was perfect,
-
0:23 - 0:25diversity and leadership decisions
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0:25 - 0:29was something that would happen
naturally over time, right? -
0:31 - 0:32Well, not quite.
-
0:33 - 0:36While moving up the ladder
working as a management consultant -
0:36 - 0:38across Europe and the US,
-
0:38 - 0:43I started to realize how often
I was the only woman in the room -
0:43 - 0:46and how homogenous leadership still is.
-
0:48 - 0:49Many leaders I met
-
0:49 - 0:54saw diversity as something to comply with
out of political correctness, -
0:54 - 0:57or, best case, the right thing to do,
-
0:58 - 1:00but not as a business priority.
-
1:00 - 1:03They just did not have a reason to believe
-
1:03 - 1:08that diversity would help them achieve
their most immediate, pressing goals: -
1:08 - 1:11hitting the numbers,
delivering the new product, -
1:11 - 1:13the real goals they are measured by.
-
1:14 - 1:18My personal experience
working with diverse teams -
1:18 - 1:22had been that while they require
a little bit more effort at the beginning, -
1:22 - 1:25they did bring fresher,
more creative ideas. -
1:26 - 1:28So I wanted to know:
-
1:28 - 1:32Are diverse organizations
really more innovative, -
1:32 - 1:36and can diversity be more
than something to comply with? -
1:36 - 1:39Can it be a real competitive advantage?
-
1:40 - 1:45So to find out, we set up a study
with the Technical University of Munich. -
1:45 - 1:51We surveyed 171 companies
in Germany, Austria and Switzerland, -
1:51 - 1:54and as we speak, we're expanding the study
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1:54 - 1:56to 1,600 companies
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1:56 - 1:59in five additional countries
around the world. -
2:00 - 2:03We asked those companies
basically two things: -
2:03 - 2:06how innovative they are
and how diverse they are. -
2:07 - 2:08To measure the first one,
-
2:08 - 2:11we asked them about innovation revenue.
-
2:12 - 2:15Innovation revenue is the share
of revenues they've made -
2:15 - 2:18from new products and services
in the last three years, -
2:18 - 2:21meaning we did not ask them
how many creative ideas they have, -
2:21 - 2:25but rather if these ideas
translate into products and services -
2:25 - 2:28that really make the company
more successful today and tomorrow. -
2:30 - 2:34To measure diversity,
we looked at six different factors: -
2:34 - 2:38country of origin,
age and gender, amongst others. -
2:39 - 2:42While preparing to go in the field
with those questions, -
2:42 - 2:45I sat down with my team
-
2:45 - 2:48and we discussed what
we would expect as a result. -
2:50 - 2:52To put it mildly, we were not optimistic.
-
2:53 - 2:57The most skeptical person on the team
thought, or saw a real possibility, -
2:57 - 2:59that we would find nothing at all.
-
3:00 - 3:03Most of the team
was rather on the cautious side, -
3:03 - 3:07so we landed all together at "only if,"
-
3:07 - 3:09meaning that we might find
some kind of link -
3:09 - 3:11between innovation and diversity,
-
3:11 - 3:13but not across the board --
-
3:13 - 3:16rather only if certain criteria are met,
-
3:16 - 3:20for example leadership style,
very open leadership style -
3:20 - 3:24that allowed people to speak up freely
and safely and contribute. -
3:26 - 3:28A couple of months later,
the data came in, -
3:30 - 3:34and the results convinced
the most skeptical amongst us. -
3:35 - 3:36The answer was a clear yes,
-
3:36 - 3:38no ifs, no buts.
-
3:39 - 3:41The data in our sample showed
-
3:41 - 3:45that more diverse companies
are simply more innovative, period. -
3:47 - 3:52Now, a fair question to ask
is the chicken or the egg question, -
3:52 - 3:56meaning, are companies
really more innovative -
3:56 - 3:58because they have
a more diverse leadership, -
3:58 - 4:00or the other way around?
-
4:00 - 4:01Which way is it?
-
4:01 - 4:05Now, we do not know how much
is correlation versus causation, -
4:06 - 4:09but what we do know is that clearly,
-
4:09 - 4:12in our sample, companies
that are more diverse -
4:12 - 4:14are more innovative,
-
4:14 - 4:16and that companies
that are more innovative -
4:16 - 4:18have more diverse leadership, too.
-
4:18 - 4:21So it's fair to assume
that it works both ways, -
4:21 - 4:25diversity driving innovation
and innovation driving diversity. -
4:27 - 4:30Now, once we published the results,
-
4:30 - 4:35we were surprised
about the reactions in the media. -
4:35 - 4:38We got quite some attention.
-
4:38 - 4:40And it went from quite factual,
-
4:40 - 4:44like "Higher Female Share
Boosts Innovation" -
4:44 - 4:48to a little bit more sensationalist.
-
4:48 - 4:50(Laughter)
-
4:50 - 4:51As you can see,
-
4:51 - 4:54"Stay-at-home Women Cost Trillions,"
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4:54 - 4:56and, my personal favorite,
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4:56 - 4:59"Housewives Kill Innovation."
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4:59 - 5:02Well, there's no such thing
as bad publicity, right? -
5:02 - 5:04(Laughter)
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5:04 - 5:06On the back of that coverage,
-
5:06 - 5:10we started to get calls
from senior executives -
5:10 - 5:11wanting to understand more,
-
5:11 - 5:15especially -- surprise, surprise --
about gender diversity. -
5:16 - 5:20I tend to open up
those discussions by asking, -
5:20 - 5:24"Well, what do you think of the situation
in your organization today?" -
5:24 - 5:27And a frequent reaction to that is,
-
5:27 - 5:31"Well, we're not yet there,
but we're not that bad." -
5:31 - 5:33One executive told me, for example,
-
5:33 - 5:35"Oh, we're not that bad.
-
5:35 - 5:38We have one member
in our board who is a woman." -
5:38 - 5:39(Laughter)
-
5:39 - 5:40And you laugh --
-
5:40 - 5:43(Applause)
-
5:47 - 5:50Now, you laugh, but he had a point
in being proud about it, -
5:50 - 5:51because in Germany,
-
5:52 - 5:54if you have a company
-
5:55 - 5:57and it has one member
on the board who is a woman, -
5:57 - 6:00you are part of a select group of 30
-
6:00 - 6:03out of the 100 largest
publicly listed companies. -
6:03 - 6:08The other 70 companies
have an all-male board, -
6:08 - 6:12and not even one of these hundred
largest publicly listed companies -
6:12 - 6:16have, as of today, a female CEO.
-
6:17 - 6:19But here's the critically
important insight. -
6:20 - 6:24Those few female board members alone,
-
6:24 - 6:26they won't make a difference.
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6:26 - 6:30Our data shows that for gender diversity
to have an impact on innovation, -
6:31 - 6:35you need to have more
than 20 percent women in leadership. -
6:35 - 6:37Let's have a look at the numbers.
-
6:39 - 6:42As you can see, we divided
the sample into three groups, -
6:42 - 6:45and the results are quite dramatic.
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6:45 - 6:50Only in the group where you have
more than 20 percent women in leadership, -
6:50 - 6:54only then you see a clear jump
in innovation revenue -
6:55 - 6:57to above-average levels.
-
6:57 - 7:01So experience and data
shows that you do need critical mass -
7:02 - 7:03to move the needle,
-
7:03 - 7:06and companies like Alibaba,
JP Morgan or Apple -
7:06 - 7:10have as of today
already achieved that threshold. -
7:12 - 7:15Another reaction I got quite a lot was,
-
7:17 - 7:19"Well, it will get solved over time."
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7:20 - 7:23And I have all the sympathy in the world
for that point of view, -
7:23 - 7:25because I used to think like that, too.
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7:27 - 7:30Now, let's have a look here again
and look at the numbers, -
7:30 - 7:32taking Germany as an example.
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7:32 - 7:34Let me first give you the good news.
-
7:34 - 7:37So the share of women
who are college graduates -
7:37 - 7:41and have at least 10 years
of professional experience -
7:41 - 7:44has grown nicely over the last 20 years,
-
7:44 - 7:48which means the pool
in which to fish for female leaders -
7:48 - 7:50has increased over time,
-
7:50 - 7:52and that's great.
-
7:52 - 7:53Now, according to my old theory,
-
7:55 - 7:56the share of women in leadership
-
7:56 - 7:59would have grown
more or less in parallel, right? -
8:00 - 8:03Now, let's have a look
at what happened in reality. -
8:03 - 8:05It's not even close,
-
8:07 - 8:11which means I was so wrong
-
8:11 - 8:13and which means that my generation,
-
8:13 - 8:15your generation,
-
8:16 - 8:19the best-educated
female generation in history, -
8:21 - 8:22we have just not made it.
-
8:22 - 8:26We have failed to achieve leadership
in significant numbers. -
8:26 - 8:29Education just did not
translate into leadership. -
8:31 - 8:34Now, that was a painful realization for me
-
8:34 - 8:36and made me realize,
-
8:36 - 8:38if we want to change this,
-
8:38 - 8:41we need to engage,
and we need to do better. -
8:42 - 8:45Now, what to do?
-
8:45 - 8:49Achieving more than 20 percent
women in leadership -
8:49 - 8:51seems like a daunting task to many,
-
8:51 - 8:54understandably, given the track record.
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8:55 - 8:56But it's doable,
-
8:56 - 9:00and there are many companies today
that are making progress there -
9:00 - 9:01and doing it successfully.
-
9:01 - 9:05Let's take SAP, the software
company, as an example. -
9:05 - 9:09They had, in 2011,
19 percent women in leadership, -
9:09 - 9:11yet they decided to do better,
-
9:11 - 9:14and they did what you do
in any other area of business -
9:14 - 9:16where you want to improve.
-
9:16 - 9:19They set themselves a measurable target.
-
9:19 - 9:24So they set themselves a target
of 25 percent for 2017, -
9:24 - 9:26which they have just achieved.
-
9:27 - 9:31The goals made them think more creatively
about developing leaders -
9:31 - 9:33and tapping new recruiting pools.
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9:33 - 9:37They now even set a target of 30 percent
women in leadership for 2022. -
9:38 - 9:41So experience shows it's doable,
-
9:41 - 9:43and at the end of the day,
-
9:43 - 9:47it all boils down to two decisions
that are taken every day -
9:47 - 9:50in every organization by many of us:
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9:52 - 9:55who to hire and who
to develop and promote. -
9:56 - 9:59Now, nothing against women's programs,
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9:59 - 10:01networks, mentoring, trainings.
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10:01 - 10:02All is good.
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10:03 - 10:05But it is these two decisions
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10:05 - 10:09that at the end of the day
send the most powerful change signal -
10:09 - 10:11in any organization.
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10:13 - 10:16Now, I never set out
to be a diversity advocate. -
10:16 - 10:18I am a business advisor.
-
10:19 - 10:24But now my goal is
to change the face of leadership, -
10:24 - 10:25to make it more diverse --
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10:26 - 10:29and not so that leaders can check a box
-
10:29 - 10:32and feel like they have
complied with something -
10:32 - 10:34or they have been politically correct.
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10:34 - 10:36But because they understand,
-
10:36 - 10:39they understand that diversity
is making their organization -
10:39 - 10:41more innovative, better.
-
10:42 - 10:46And by embracing diversity,
by embracing diverse talent, -
10:46 - 10:48we are providing
true opportunity for everyone. -
10:49 - 10:50Thank you. Thank you so much.
-
10:50 - 10:53(Applause)
- Title:
- How diversity makes teams more innovative
- Speaker:
- Rocío Lorenzo
- Description:
-
Are diverse companies really more innovative? Rocío Lorenzo and her team surveyed 171 companies to find out -- and the answer was a clear yes. In a talk that will help you build a better, more robust company, Lorenzo dives into the data and explains how your company can start producing fresher, more creative ideas by treating diversity as a competitive advantage.
- Video Language:
- English
- Team:
- closed TED
- Project:
- TEDTalks
- Duration:
- 11:05
Aviva Nassimi commented on English subtitles for How diversity makes teams more innovative | ||
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Brian Greene edited English subtitles for How diversity makes teams more innovative | ||
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Joanna Pietrulewicz edited English subtitles for How diversity makes teams more innovative |
Aviva Nassimi
Hello,
Please note that the, at the request of the speaker, we've changed the headline of this talk from
Want a more innovative company? Hire more women
to
"How diversity makes teams more innovative"
Thank you!