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Diversity Fuels Innovation

Written by: Sophie Warwick.

Over the last few years, we have faced volatile economic times. The uncertainty has required companies to be more creative and adaptable in order to seek new market opportunities and sustainable revenue. Suddenly, innovation and responsiveness have become central to companies navigating an everchanging landscape. They need the ability to respond to challenges and create new opportunities without having the comfort of leaning on what’s been done in the past.

In this article, I’ll explain why diversity, and an inclusive environment that encourages employee engagement, fuels innovation.

Diversity disrupts group think (WWEST, 2015). Group think is the practice of thinking or making decisions as a group in a way that discourages creativity or individual responsibility. Often it means reaching a consensus without critical thinking or the evaluation of alternatives. Decision making is shaped by our own experiences and biases. If these experiences are similar, or our biases are complimentary, we’ll consider a narrower window of possible solutions.

By introducing diverse perspectives with conflicting biases, we can make more effective and pragmatic decisions and provide equitable consideration of more opportunities. Without diverse perspectives, companies can miss opportunities to better serve their clients or customers, or enhance their products or services. The pressure to conform to a majority normal can reduce team contributions and creative insight from all team members, not just those who are a minority.

A study of 1,700 companies found that diverse management teams were more innovative than less diverse teams (BCG, 2019). The study measured innovation by the portion of revenue attributed to products and services launched in the last three years. Companies with above average diversity produced 45% of total revenue attributed to innovation compared to companies with below average diversity who produced only 26%.

Additionally, it isn’t innovation for the sake of innovation. The 19% innovation-related advantage translated into overall better financial performance. Companies that were more innovative were able to seek new markets, increase sales, and serve their customers better by having diverse perspectives in teams. Not only was diversity increasing innovation, but the resulting innovation was improving their bottom line.

Research shows that employees are more productive in diverse groups (Harvard Business Review, 2016). In this study, company productivity was measured by market value and revenue. Researchers reported higher performance in these metrics for companies with greater gender diversity.

Beyond diversity, teams also need to be inclusive in order to achieve the true benefits of representation. If an equitable and inclusive environment isn’t achieved to encourage active participation and engagement of diverse voices, productivity and innovation will fall flat. For example, consider a diverse team led by a uniform group. The individuals who don’t see themselves reflected in leadership may be less likely to contribute.

Tip for leaders: During meetings, keep notes on who’s speaking up. If there are individuals who aren’t contributing, consider respectfully asking if they have anything to add. In the early days of establishing an inclusive environment, they may need additional support to clarify that their perspective is valued in this space.

History shows us that equity, diversity, and inclusion don’t happen without a targeted effort. Homogeneous industries have long identified that there is value in change, but that more needs to be done to move the needle than naming the issue. For example, Engineers and Geoscientists British Columbia (EGBC) formed The Division for the Advancement of Women in Engineering and Geoscience in the early 1990s in response to low representation of women in engineering. However, without support from the broader industry, very little progress has been made to the representation of women in engineering with only 14% of licensed Professional Engineers being women as of 2022. Gender diversity is impactful to company performance and requires intentional and targeted programs to achieve meaningful change.


We’ll be continuing the value of gender equity series with part three on retention and engagement, which will be released on July 17th. If you would like to learn how we help employers retain women and other top talent, please email us at ​We advise companies on retention, policy and governance, informed by research. We help employers implement practices that retain and engage women over the long-term, and set up governance structures to support these practices. Our goal is to create structures that allow women to thrive over their full career.


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