Just about every large global company these days must digitally transform itself. If your product or service can be digitized and distributed online (think media companies, banks, law firms, advisory and research firms, and many more sectors), your company is in the cross-hairs of digital transformation. But other industries aren’t immune, and they include heavy industrial, retail, and pharmaceuticals.
To play this game of digital transformation, you might think the most important assets are ones like technology prowess, deep pockets and a youthful outlook (i.e., digital startups not encumbered by old thinking and bureaucracy). But guess again. The most important asset is actually diversity-spawned creativity: people at all levels of an organization (but especially at the top) who work extremely well together and possess very different worldviews and ways of working. One thing they must have in common: the ability to rethink today’s reality, deeply respect and enhance each other’s contributions, and reject age-old “truisms” as not necessarily true anymore. That approach to diversity has been in place at a few companies for some time. It now must become mainstream.
“We believe that diverse teams are more creative, more open-minded and more productive,” Jean-Paul Agon, CEO of the French beauty products supplier L’Oreal, said more than a dozen years ago when he ran the company’s US unit. That kind of thinking has helped L’Oreal grow 33% (to EUROS 26 billion in revenue) since Agon became CEO in 2011. In short, companies undergoing digital transformations need an extremely diverse set of people – experience-wise, intellectually, culturally, racially and otherwise. That is not likely to happen if most of them are of the same gender, race, country, religion and sexual orientation. The kind of “creativity” you get from that kind of group is likely to be uniform and incremental. It’s often called “group think,” and it will contribute to the demise of once-great companies in a world that now requires radical diversity in thought, experience and points of view.
In fact, several recent studies point to the power of radically diverse management teams at every level of an organization:
Deloitte’s latest Global Human Capital Trends study found 78% of managers see diversity and inclusion as a competitive advantage
McKinsey’s Diversity Matters survey found gender-diverse companies perform 15% better than firms of great gender uniformity, and that ethnically diverse firms perform 35% better
Some 85% of CEOs polled by PwC have said that having a diversified and inclusive workplace population improved their bottom line
But please realize that simply hiring such a diverse range of people at every level alone won’t make creativity reign. People from different countries, cultures, religions, genders, sexual orientation, ages and so on must embrace such diversity – not just tolerate it. They need to seek out the opinions of people who may seem foreign to them and think differently from them. They need to bring them into the tents of strategy-making, business process redesign, business model revolution, and skill building.
That’s the inclusion part of diversity, and it’s just as important as having a multitude of very different people from very different walks of life.
Diverse and inclusive leaders possess a competitive advantage that leaders of the opposite traits don’t even know they’re missing: the ability to unleash significant creativity, excitement and camaraderie in their organizations.
If I’m in a company that must digital transform itself, and rapidly, I’d much rather be around an abundant number of radically diverse and enormously inclusive leaders. I’d be far more willing to bet my career on that company than on one that is largely homogenous in people and who work exclusively rather than inclusively.
Diversity and inclusion are vital ingredients to digital transformation. The companies that unearth the digital riches of the next 10 years will be those that take diversity of people and inclusivity in teamwork to new levels.
About the author(s)
"Serge Pérignon is an international B2B marketing leader with over 20 years of experience. He joined Tata Consultancy Services (TCS) in 2006, where he is currently the Global Head of TCS Thought Leadership Institute. In this role, Serge has overall responsibility for content strategy, research and data collection, development and standardization of our global thought leadership programs.
In addition, Serge is the editor in chief of our management journal - Perspectives (since 2009), led seven global trend studies since 2011, and is a founding member of the ITSMA thought leadership council.
Prior to TCS, Serge held advisory services management, marketing and operating roles at Forrester Research, Nike, Ryder System and Hewlett Packard. Serge holds a Bachelor of Business Administration, a degree in International Trade, and has completed advanced management programs in strategic market orientation and coaching. Originally from France, Serge has been living in the US for the past 19 years.