How to Achieve Remarkable Business Results — Thought Diversity

Embracing thought diversity will change how you define and harness human capital and lead to increased business success.

Crafting a truly effective inclusion and diversity strategy is no small effort and requires strong and sustained and inclusive leadership. However, we, and many of the companies we studied in depth, believe the potential benefits of stronger business performance are well worth it.” - McKinsey’s report, “Delivering through Diversity.”

Diversity is good for your business — not just from the ethical standpoint, but from the perspective of a company’s bottom line, according to McKinsey & Company. As a follow-up to its “Why Diversity Matters” study in 2015, McKinsey analyzed more than 1,000 companies across 12 countries, looking at their respective profits and value creation. The research confirms that gender, ethnic, and cultural diversity, particularly within executive teams, continue to be correlated to financial performance across multiple countries worldwide. More diverse companies are better able to attract top talent; to improve their customer orientation, employee satisfaction, and decision making; and to secure their license to operate—all of which continue to be relevant.

Thought Diversity

The prime focus for diversity initiatives has been on fairness for defined populations. We believe it goes further –a more powerful and nuanced kind of diversity: thought diversity.

Diversity of thought refers to a concept that all of us know intuitively and experience throughout our lives. – Deloitte - Diversity’s new frontier

Three kinds of diversity

Legacy Diversity — Reflects differences in physical attributes and social constructs, such as race, ethnicity, age, gender, ability, and sexuality.

Experiential Diversity — A function of our physical and social identities; the impact those identities have on our life histories and lived experiences. A powerful example of experiential diversity is the emerging generational diversity within the workforce today.

Thought Diversity — How our neural makeup and lived experiences impact our problem-solving, both in terms of the biological hardwiring of the brain and what occurs when two previously unrelated thoughts are connected in a new way — revealing new insights.

How each of us thinks and solve problems help our organizations

Operationalize thought diversity and change how you define and harness human capital. In our work with behavioral DNA, we find that high performers share a common set of behavioral traits regardless of gender, ethnicity, sexual orientation, social economic status, etc. You create different leadership roles. Each role has unique traits. Thought diversity brings your organization the following benefits:

1. Guards against groupthink and expert overconfidence.  You make better decisions and complete tasks more successfully. It triggers more careful and creative information processing than occurs in homogeneous groups.
2. Increases the scale of new insights. Generating an excellent idea quickly requires connecting multiple tasks and ideas in a new way. Bring the diversity of thinking to bear on your challenging problems.
3. Engages the employees who can best tackle the most pressing problems. Our advanced analytics predict a person’s success in specific jobs based on the behavioral traits of high performers. You can purposely align individuals with certain teams and jobs simply because of the way they think.

To increase thought diversity among your workforce:

1. Hire differently. Stop the guessing and hire for the best results. You need to recruit top talent—even if it means shaking up the status quo.
2. Manage differently. Instead of seeking consensus as an end goal, your managers should push their teams to new levels of creativity and productivity. The aim is to foster an environment where all feel comfortable sharing their views and their authentic selves.
3. Promote differently. Enact sponsorship programs directed at individuals who represent different problem-solving styles. Our analytics identify ten problem-solving styles. Create a culture of inclusion that empowers your people, spurs collaboration, and inspires more innovation.

Snapshot of the Problem-Solving Styles

Expertise—for problem-solving, innovation, etc.—is emergent. It’s out there in large quantities, and in hard-to-predict places. A problem-solving approach that lets pockets of enthusiasm and expertise manifest themselves and find each other can yield surprisingly large rewards, even in the unlikeliest places.” — Andrew McAfee, MIT research scientist

Below is a snapshot of the “Problem Solving Styles” from our benchmarks of high performers at five positions at a Mid-Size Company (Under $1B). These five positions cover seven of the ten problem-solving styles. Experiential Learning, Linguistics and Reflectiveness are not represented.  However, the individuals in those roles may not have the specific problem-styles as strengths. When you set up a team to solve a complex problem, ideally you have team members with strengths in all ten styles. You do not need ten people. Many of us are strong in two or more problem-solving styles.

Ethnic and gender diversity at the executive level = above-average profitability

Companies in the top quartile for ethnic diversity at the executive level are 33 percent more likely to have above-average profitability than companies in the bottom quartile, according to McKinsey’s report, “Delivering through Diversity.”

Moreover, the same goes for gender diversity, with companies in the top quartile for gender diversity being 21 percent more likely to have above-average profitability than companies in the bottom quartile. In the top quartile, financial services are overrepresented for gender diversity, while telecom, media, and technology companies are disproportionately represented in the lowest quartile. The Technology, Media, and Telecom companies in this sample, which are mostly tech firms, also have seen the most significant decline in diversity since McKinsey’s 2015 report. Thought diversity different types also matters. McKinsey found a statistically significant correlation between a more diverse leadership team and financial outperformance.

That this relationship continues to be strong suggests that inclusion of highly diverse individuals – and the myriad ways in which diversity exists beyond gender (e.g., LGBTQ+, age/generation, international experience) – can be a key differentiator among companies.” McKinsey report

Meanwhile, the least diverse companies — the ones in the bottom percentiles for both gender and ethnicity — are 29 percent less likely to outperform in profitability.

Concluding thoughts

Thought diversity is not a novel or radical idea. It just makes sense in the 21st century as we can now optimize the opportunities found in the intersections among cultures, values, and perspectives. Best-fit staffing is designed to hire, facilitate, and recognizes the value of diversity of thought. This approach will help organizations to find high performers. Job seekers judge potential employers based on their ability to provide a good fit. Help employees to develop the self-awareness to understand their unique ability to contribute to an organization’s mission and to maximize the expression of their talents and passions.

Organizations that fail to manage diversity eventually will find themselves at a competitive disadvantage in the future as the best talent will seek situations that can fully leverage their talent stack.