Reality

Building deeply innovative organizations must replace the more simplistic vision of building organizations that are technically innovative but perpetuate a toxic and destructive business culture. Too often, this is ignored until legal, financial, or public relations consequences are at hand. As a result, innovation in brand risk management, in most companies, has yet to expand beyond this limited framework to assess and address toxic and destructive issues. Brand risk management is still viewed primarily through the lens of risk aversion and liability exposure, and innovation is primarily understood through the lens of technological innovations. This is how glaring blind spots remain present in the cultural mindset and become institutionalized. Alternatively, those who accept the importance of including diversity in fostering innovative organizational cultures reap their rewards.

• 85% of CEOs whose organizations have lived through the diversity and inclusion strategy say it has improved performance.

• Highly inclusive organizations rate themselves 170% higher on innovation

• Improving organizational cultures means less employee absenteeism

• These organizations also have higher employee retention

• Intentionally fostering inclusion makes companies 45% more likely to increase their market share.

Step Up: Obstacles and Challenges

Innovation requires the ability to see things in unexpected ways. Uniting unique perspectives from different backgrounds is often the catalyst for forward-thinking solutions, and this is where diversity inclusion is required. Additionally, research shows that innovation requires an environment in which all ideas can be considered regardless of their origin. Opposition issues typically manifest as lawsuits and public shaming on social media after people within an organization act on their own personal biases. Despite having policies that denounce discrimination and bias, companies like Hilton, Starbucks and Toyota have paid off big this year…both in terms of real dollars and lost social capital that brands had built in decades prior. At the same time, even some of the tech industry’s movers and shakers have been unseated by reports and allegations of sexual misconduct and discrimination.

So why do we see this over and over again in companies that have policies that promote inclusion and respect?

Because the people within your organization, the ones who literally define what the organization is in real terms, have been unable (in far too many cases) to identify their personal bias and choose a better course of action to experience personal growth transformation.

What we have had are corporate cultures shaped by societies still struggling with legacies of oppression and exclusion.

Cost of the status quo on innovation

Because business decisions are driven, in many cases, mainly by profitability and risk aversion. This is part of the flaw in that brand risk management approach and one reason why innovation is so needed sooner rather than later.

There was an experiment in which a resume with a black-sounding name received half as many callbacks as the same resume with a white-sounding name, even when sent to corporations with strong reputations for diversity. Technology has made the world smaller and has also increased transparency in many cases. Given that it has been clearly established that diverse perspectives are key to innovation, what is the value to be gained when discrimination is essentially normalized?

“There is a price to be paid for discrimination in the workplace: $64 billion.

That amount represents the estimated annual cost of losing and replacing the more than 2 million American workers who leave their jobs each year due to injustice and discrimination.”

Good Michael. “Discrimination in the workforce costs businesses $64 billion each year”

What is more difficult to determine are the impacts on the people discriminated against. The waves set in motion continue as is evident from the present state of affairs. Looking back at the technology sector, which is typically where people turn to get a sense of what’s on the cutting edge of innovation. There are disturbing consequences, beyond the obvious, to the toxic and discriminatory tech culture seen in places like Silicon Valley.

“If we don’t do this now, all of this bias and discrimination will be rewritten into the algorithms, AI and machine learning that power the technology of the future. Facial recognition technology is already basically sexist and racist. it recognizes women and people of color in the same way that it recognizes white men. That’s a big problem”.

McGrane, Claire. Emily Chang on Silicon Valley’s ‘Brotopia’ and how companies can address a toxic culture

The past is connected to the present. Today is that the basis for the long term. And with the response from various leaders often being a Band-Aid approach, progress has been slow and painful. The truth is that hearts and minds cannot be legislated by outside forces, new policies and laws will have painful limits for most. The way forward is deeply personal as a result of the results mentioned here all emerge from a deeply personal place within the people involved.

The solution

The simple solution starts with the leaders. Smart leaders must embrace personal innovation to lead by example. Policy statements or diversity training that make things worse or provide short-term fixes no longer pass as solutions. Too many studies have shown that those approaches don’t work. But a leader who shows the courage to step up with personal innovation can cultivate a significantly innovative organizational culture that seems to naturally increase market share, launch products and services that lead their industry, and play a vital role in creating a better world.