The Mix That Matters

That management diversity might be linked to innovation isn’t a new concept. But it is a di cult thing to prove. In a new study, BCG and the Technical University of Munich use statistical methods to quantify the impact that different types of diversity have on companies’ ability to generate new sources of revenue. The study shows a clear link between diversity and innovation.

The Diversity-Innovation Link

Four types of diversity—country of origin, career path, industry background, and gender—positively correlate with innovation. However, the four don’t have the same impact on every kind of company. Large companies and complex companies consistently show innovation bene ts from management diversity. For companies that are not as large or complex, the impact tends to be small or nonexistent.

Workplace Enablers

Diversity produces the biggest innovation bene t at companies that value open- ness in their work environments and explicitly encourage di erent perspectives. This can come from something as informal as a culture of participative leadership or something more formal like the rollout of tools to facilitate communications. 

Besides encouraging top managers to be more inclusive, companies can also use cultural and structural changes to attract and retain a diverse workforce. A number of the companies in our study already experiment with different structures. For in- stance, IXDS, a German design and innovation agency, has used part-time (80%) work contracts since its formation in 2006. The non-traditional schedule makes IXDS attractive to an inherently more diverse group of professionals, such as those who have interests outside of their day job (including research, teaching, and start- up work). At the same time, this flexibility positions IXDS as an accommodating employer at many phases of employees’ lives. The resulting diverse workforce has a creative strength that IXDS’s clients appreciate when they are trying to solve digital and organizational transformation challenges.