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Diversity Drives Innovation

The Merriam-Webster online dictionary defines “diversity” as follows:

1: the condition of having or being composed of differing elements : variety; especially : the inclusion of different types of people (as people of different races or cultures) in a group or organization <programs intended to promote diversity in schools> 2: an instance of being composed of differing elements or qualities: an instance of being diverse <a diversity of opinion>.

However, this specific focus of the word on race and gender, which is now a primary part of the definition, is only a few decades old. In the 1978 landmark United States Supreme Court ruling on university admissions, the word ‘diversity’ is used for the first time as a noun to refer to both a qualitative distinction of ethno-cultural groups and their quantitative distribution in institutions of higher education (from the paper “On diversity”).

In the early 90s the word “diversity” became closely linked with HR initiatives that promoted “tolerance” for differences in race, gender, ethnicity, religion, and sexual orientation. It was used as part of efforts to eliminate discrimination against people who weren’t part of the majority – whatever that majority was. 

In the past few years this mindset has evolved to more positive ground to “diversity as a competitive advantage.”  Diversity of the seen and unseen – culture, thought, style, skills, education, workplace flexibility, and perspectives – ensures that every member of the team is represented and valued. This more inclusive definition allows for a broader and more productive discussion.

This is obviously a noble pursuit but it’s worth pushing to see if the data truly support diversity as a driver of corporate value.  It does. The numbers, anecdotal evidence, and logic all support diversity as a business enabler:

  • In a Forbes Insights report, “Fostering Innovation Through a Diverse Workforce,” 85% of survey respondents agreed a diverse and inclusive workforce brings the different perspectives a company needs to drive innovation.  97% of the companies surveyed had formal diversity and inclusion strategies in place, viewing it as a competitive advantage that helps capture new clients, and adds to the potential for adding consumers in emerging markets.
  • Companies with a strong commitment to diversity on average outperformed their peers with higher profit margins, and greater return on equity and assets. (“The Business Case for Commitment to Diversity”, 2008)
  • The 2009 report, Does Diversity Pay? Race, Gender, and the Business Case for Diversity, showed that companies with greater racial and gender diversity performed better in terms of sales, revenue, number of customers, and market share.
  • Employee satisfaction and engagement hinges partially on satisfaction with a company’s treatment of diverse people. (Catalyst – “Why Diversity Matters”, 2012)
  • The 2010 McKinsey Women Matter report showed companies with the highest share of women in their senior management teams outperformed those with no women by 41% in return on equity and by 56% in operating results.

It makes sense. Diversity of thought, view point, and mindset leads to more innovative results than “like-thinking”.

As SAP looks to be increasingly innovative, it is good business practice to tap into all of the unique backgrounds, experiences, and ideas its employees represent. During a recent meeting with employees, SAP’s Co-CEO Jim Hagemann Snabe said, “I want SAP to be an admired innovator and diversity of teams is a huge contributor to innovation.” A workforce that is representative of the world we help run better is a vital contributor to that image of admired innovator.

From October 8 to 12, we celebrate the diversity at SAP with Global Diversity Days – our annual event dedicated to diversity and how it drives innovation, strategy, and business results.  By embracing diversity we hope to also fuel innovation. It’s the right thing for our employees as well as our company.

Follow me on twitter @jbecher.

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  • Embracing inclusion, driving innovation. 😉 Our community couldn't have asked for a more powerful "blog it forward" theme from you, Jonathan.  Thanks!

    Today I had the privilege of participating in and giving a small session and talk about the role of empathy in gender intelligence (internally at SAP for Diversity Days).  The folks who attended our session pointed to research that different wiring can indeed equate to better business and we all agreed (as you point out) that diversity is not just a gender/culture issue although the session focused on men and women leading together.  Diversity includes perspectives, generational views, roles. 

    I'm happy that many of our colleagues are invited to particpate in awareness training that is described here in :Gender Intelligence.  I believe that every leader in our community should be exposed to this kind of education.  In fact everyone in our community might benefit from the aha moments it provided.

    To take the theme of inclusion one step further, one needs empathy for the other view and perspective and that empathy can also be a business and innovation core value as described in the book: The Empathy Factor (at work)

    Thank you for continuing the inclusion conversation here on SCN.  This will be a focus during our Innojam and Teched Seminar events.

    • Thanks Jonathan Becher for a well researched reaffirmation of the value of diversity in business.  As you say:

      In the early 90s the word “diversity” became closely linked with HR initiatives that promoted “tolerance” for differences in race, gender, ethnicity, religion, and sexual orientation. It was used as part of efforts to eliminate discrimination against people who weren’t part of the majority – whatever that majority was.

      I appreciate your healthy use of parentheticals and it's clear that what makes "diversity" can often be in the eye of the beholder, pending executive decree for those who feel disenfranchized.

      And Marilyn my friend I'm wondering if you were in Newtown Square for the Diversity Fair.  Looking forward to comparing notes and moving forward, as always.   Thanks for being one of the bright reasons to be proud to work at SAP.

    • I had a chance to listen to Barbara Annis talk about gender intelligence this week during SAP's diversity days. The p[resentation was fascinating and I plan to read her book.

      The crowd nearly erupted when she showed two brains scans side-by-side: one of a women at rest and the other of a man at rest.  While the man's brain was showed little activity, the woman's brain was still very active.  The difference was stunning.

      Barbara drew lots of conclusions from this finding: young men need time to regenerate their testosterone, adult males prefer quiet time to unwind rather than talking abut their day, etc.

      I hope to blog about the book when I get a chance.

  • I appreciate this, because in addition to diversity being a (somewhat squishy morally positive) "noble cause" for society, diversity is also shown in study after study to be a good and advantageous business practice with measurable positive business results proven through hard facts.

    I also like that we are broadening the definition of diversity beyond race and gender to include (and value) diversity of "culture, thought, style, skills, education, workplace flexibility, and perspectives." 

    Thank you for this insightful blog as we celebrate diversity this week at SAP, and as we seek to embrace diversity and inclusion always and in all ways in our work and our lives. 


  • You mention in your response to Marilyn that you had the chance to listen to Barbara Annis talk about gender intelligence. I was fortunate to attend Women and Men Leading Together, which has to be the best diversity class I've attended (so far) in my 25+ year carreer.  One of it's messages is that we need to do more than "tolerate" diversity.  We need to seek it out, especially when making business decisions.  If an all male or all female group is making a critical decision, they should seek out some members of the opposite *** to consider the decision from multiple points of view.

    When I took this course, it was about one third men and two thirds women in attendence, and some of the men questioned why we needed the course since we'd solved the problem years ago. Attending the course helped them, as well as all the others, to better understand that the problem is not solved, and that there is a business imperative to having inclusive thinking and behavior in the workplace.

    It would be great if we could get all managers through this course, especially more of the male managers. We have such potential to improve what we produce with some simple steps toward more diversity in the way we think and work together.