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The Diversity Effect

01 Oct 07

On September 30, the Equal Employment Opportunities Trust (EEO T), together with the Auckland Chamber of Commerce, hosted a symposium called “The Diversity Effect” in celebration of the 10th anniversary of the EEO Trust Work & Life Awards.  Sponsored by ANZ National Bank Limited, and with support from the likes of Air New Zealand, IBM, the Ministry of Social Development, the Department of Labour, Southern Cross Healthcare, Woolworths Limited, Pricewaterhouse Coopers, and Matisse, the symposium explored the benefits of encouraging diversity in the workplace. 
Keynote speaker, Frans Johansson, is author of The Medici Effect, an award winning book that has been translated into 13 languages. Johansson’s experiences led him to the conclusion that today’s most innovative companies form diverse talent pools and teams as a specific strategy to innovate.  As New Zealand is known the world over for being particularly innovative and forward-thinking, it is in our best interest to implement new strategies and techniques to continue driving that innovation. 
Raised in Sweden by his African-American and Cherokee mother and Swedish father, Johansson feels a strong need to tell the benefits of diversity to businesses everywhere.  “Diversity offers huge potential,” explained Johansson.  “It is not just about individual ethnicities and abilities, but about the collusion.”  In his keynote address, he challenged all attendees to experience what diversity can provide, as the contribution it offers will vary to every workplace.
In New Zealand’s tight labour market characterised by long working hours and flat productivity, we need to start doing something differently if we want a different result.  How can we bring excitement, creativity and inspiration into the workplace?  Diversity, says Johansson, is the answer.  New ideas are key to building an organisation’s success.  Diversity drives innovation. 
Diversity is key to innovation, because by combining widely different ideas, you will have the best chance of coming up with groundbreaking new ideas.  The need for innovation is increasing as the average company lifecycle is shrinking.  The larger a company becomes, said Johansson, the more difficult it becomes to innovate.  Regardless of size however, diversity will breed innovation, leading to greater success.
Johansson spoke of Eastgate, an office building and shopping centre in Zimbabwe designed by architect Mick Pearce to require no air conditioning.  The first building of its kind, it was inspired by termite mounds on the African savannah; and by utilising a unique passive cooling system uses only about 10% of the energy needed by a similar conventionally cooled building. 
By combining termites with large-scale architecture, Pearce was able to succeed beyond expectation.  Johansson believes we all can experience similar success by combining equally disparate people and ideas regularly in our businesses.
Why is diversity the best way to achieve innovation?
    * All new ideas are combinations of existing ideas.  The more closely related the ideas are, the less likely the combination is to be innovative.
    * Innovative individuals and teams generate and execute far more ideas, and diverse teams generate far more ideas.  The number of ideas generated has a direct correlation on success. 
Keep in mind, however, that the most innovative people and teams also have the highest rate of failure.  The key is to not be afraid of failure.  Human beings, said Johansson, have never been particularly good at predicting what ideas will fail or not.  If you’re not willing to take great risks, it is unlikely you will ever be innovative.  You have to step outside of your comfort zone to achieve greatness and inspire it in your team.
Johansson said that HP’s Quantum Science Research Lab is an excellent example of diversity breeding innovation.  From the lab’s inception, the hiring principle was that every single new person had to have a different background from every other existing person on the team.  When Johansson wrote The Medici Effect, HP’s QSR Lab had 32 scientists from 13 countries on four continents with 13 disciplines.
The connection point between diverse people and their ideas is what Johansson calls the “intersection”.  At the intersection, we come up with better ideas and more of them.  In most organisations, large or small, diversity is not being utilised enough to drive innovation, and the intersection is not being sought.
How can innovation be achieved through diversity in your workplace?
   * Find inspiration from fields or cultures other than your own and dare to explore the connections.  “A lot of people think innovation has to be ‘cutting edge’ and number one,” said Johansson, “but how many people can be number one?  That’s a rather difficult strategy.” 
Look at what you know right now - your experiences and your network - and combine it with the knowledge and experiences of others.  Allow yourself to fail.  Explore ideas in an environment where nothing is wrong.
   * Staff for innovation; staff for diversity.  Ensure you have opportunities for creative differences around you every day.  Combine different experiences, approaches, concepts, and traditions to see what new things can develop.  “If we’re going to do different things to stay competitive, we have to bring in different perspectives,” stated Johansson.
   * Leverage existing diversity.  The natural instinct is to seek out others just like ourselves.  Diversity doesn’t happen on its own; you have to purposely seek out and leverage diversity.
   Ignite an explosion.  “Sometimes we hear that we need diversity to access different markets, and there is truth to that;” said Johansson “but we simply come up with better ideas across the board if we access diversity.”
   Intersect ideas from your global network.
   * Diverse teams outperform quickly.  A diverse team may take more time to get going than a homogeneous team, but it is always worth it according to Johansson. 
   * Global leaders must manage diversity.  If you have a diverse team, but only some people consistently contribute ideas, it is effectively a homogeneous team.  Organisations need to find ways to encourage all staff to contribute ideas, and support any members of the team who may need different styles of interaction. 
“Allow yourself to explore ‘crazy’ unfamiliar ideas,” challenged Johansson.  Tolerance, inclusivity and respect are key to managing a diverse team.  Expose yourself to diversity as soon as possible – you must experience diversity to understand its power.
   * Contribute ideas and make those ideas happen.  People often experience a lack of confidence when it comes to sharing their ideas, but a so-so idea from one person can inspire a brilliant idea in someone else. 
Coming up with a lot of ideas is never bad, said Johansson.  In fact, it should happen as a natural part of what you do at work.  With greater diversity there is more opportunity to find unique intersections, as long as you can leverage them.
“Do you wish to drive change?” asked Johansson.  “Stepping into the intersection is not what is risky.  Doing the same thing over and over is the biggest risk.”
Diversity is not just about ethnicity.  Develop a team that is diverse in gender, age, sexual orientation, religion, and culture.  The broader the experience of the members of your team, the greater the chance that the joining of their ideas will spark something truly innovative.  In a time where skilled labourers are difficult to find, especially in the IT industry, we all must find new ways to drive creativity, attract qualified employees and inspire our teams.
Isolation, history, cultural identity, and demographic profile all make New Zealand unique, said Jude Hoonson, director of The Providence Report and owner of Mandala Creative Business.  International rules do not necessarily apply, but the opportunities for accessing and leveraging diversity are virtually endless. 
The Providence Report states that New Zealand is a major immigrant receiving country with a high foreign-born population proportionately double that of the United States, and just slightly lower than Australia.  New Zealand is bi-cultural as a nation, with the Maori language recognised as an official language and spoken by almost 25,000 non-Maori.  Large populations of Asians and Pacific Islanders call New Zealand home, as well as many migrants from Europe, the United States, Africa, and South America. 
Women are currently outperforming men in the tertiary stakes, and women of all ages are entering the workforce in record numbers.  The Providence Report also examined what is often referred to as “the man shortage”.  New Zealand is down 97,000 men, most in the critical 25 – 49 years age group.  While this is often highlighted by the media as a problem for single women, in reality it has serious implications for businesses at a time when we are already at a significant talent shortage.
With the average life expectancy higher than ever before, we are for the first time seeing four different generations in the workforce at once.  To stay vital and productive, businesses need to find ways to attract a widely diverse talent pool that incorporates both genders, and as many cultures, ages and other diversifying factors as possible. 
“Companies that don’t adapt stagnate and disappear,” said Damien Woods of Ernst and Young.  “The way we manage people will have to change.”  Woods focused on the ageing workforce, and the impact it will have in the workplace.  Whether age, gender, culture, ethnicity, sexual orientation, or otherwise, businesses need to get away from thinking about prospective and current employees from a simplistic, stereotypical point of view. 
In a job market that is losing skilled workers faster than they are being replaced, a recruitment strategy that focuses only on young talent without a retention strategy for mature age employees will be at a disadvantage.  With women consistently graduating from universities in higher numbers than men, focusing on a predominantly male IT workforce is unrealistic. 
Research conducted by Ernst and Young in Australia stated that 4,000 hiring managers across 30 companies said the average quality of candidates has dropped by 10% since 2004.  If the same is true in New Zealand, companies will need to be more and more creative and open to diversity in order to achieve the quality and consistency desired in their employees.  The idea, said Woods, is to attract from the broadest labour pool possible. 
To appeal to as many people in the labour market as you can, it is vitally important to not inadvertently tell applicants, “You don’t fit in here”.  Have a look at recruitment advertisements.  Do they particularly encourage or discourage certain applicants?  Ensure that the way you attract and retain staff gives comprehensive representation.  Understand the current labour market in order to make good recruitment decisions.
Take a close look at your own business.  Are your systems flexible enough to adapt and allow for innovation?  Are you leveraging diversity?  In a job market where skilled talent is all too scarce, policies that promote and enforce diversity can make a world of difference. 
For help supporting equal employment opportunities in your business, contact the EEO Trust on (09) 525 3023, or visit