As a vocabulary, “diversity” is on everyone’s lips today, but as so often the sound makes the music – so all the more important are the subtle differences and dependencies on other factors that need to be considered if you want to lead a company to success through diversity.
Are you familiar with the phrase “garbage in, garbage out”? It originates from the IT sector and implies that the quality of a programed website or application is strongly dependent on the quality of the entered information. For the all-pervasive process of digitalisation, the question of who provides and processes data is therefore decisive.
If the teams that shape and programme our digital future are too homogeneous, this is problematic. Around 90 per cent of software developers are white men aged around 30 years old, a fact that influences the design of products and applications. The focus of these products may therefore unintentionally be placed on precisely this target group. IT products are, however, used by all sections of society – and more than 50 per cent of them are now women of all ages.
The lack of diversity in the technology sector is a serious issue. If technology is one-sided, it can also occasionally mean the difference between life and death. In the case of vital inventions such as the airbag and artificial hearts or everyday objects such as smartphones, it is therefore crucial that men and women play an equal role in their development in order to ensure that all needs are met.
Diversity can strengthen innovation capacity
The positive relationship between diversity initiatives and the innovative capacity of companies has also long since been scientifically proven. For instance, a study by the Technical University of Munich (TUM) and the Boston Consulting Group (BCG) entitled “The Mix That Matters: Innovation Through Diversity” explicitly highlights this relationship and makes references to the higher revenues generated from products and services at companies with greater diversity as regards their management positions and teams.
More than simply gender diversity
But a higher proportion of women alone does not automatically mean more innovation. Other aspects such as an individual’s industry background, country of origin and career path to date also contribute positively to innovative capacity. For the firms investigated, revenues for new products and services were noted to be up to 18 per cent higher. In contrast, age diversity does indeed have little link to innovation and, according to the study “The Mix That Matters: Innovation Through Diversity”, academic background also appears to have no impact on innovative capacity, neither in a positive nor a negative sense.
Proportion of women in management
A further factor that promotes innovation is the number of women in management. Only where women account for a significant share of management positions does the innovation premium take effect: innovation proceeds begin to increase where more than 20 per cent of a company’s management figures are female. Below this threshold, organisations remain male-dominated and it is more difficult to exploit the innovation potential offered by gender diversity.
The efforts of most companies to place and keep women in management positions, however, all too often come to nothing. This relates to the commitment of the management figures themselves. Male and female managers who are mindful of and work towards ensuring inclusion have a considerable impact.
Furthermore, we have now also reached a turning point when it comes to the analysis of gender imbalances within companies which is based on new scientific findings. For decades, this imbalance was considered to be the fault of women, who were called on to change in order to adapt to the system – a situation sometimes referred to as “fix-the-women syndrome”. Studies from the area of behavioural economics now show, however, that it does not help if women take on this advice as it does not enable them to yield any success. On the contrary: if a company is seeking to achieve diversity in order to become more innovative and economically successful, it is the organisation that needs to change – with respect to its processes, structures and corporate culture. In her book “What Works”, Iris Bohnet provides a range of instructions which can lead to the success of this process.
Potential and mindset more important than capabilities in the recruitment process
Job offers and recruitment processes are also of central importance if women are to be attracted to technical and digital careers, as they only apply to job advertisements if they meet 90-100 percent of the criteria as research shows. Men, on the other hand, will already apply if they satisfy 50 to 60 per cent of the stated requirements. To get more female applicants, work needs to be done on the job descriptions: the advertisements should be written in such a way that women can achieve the 90 per cent mark. Job advertisements should therefore tend to focus on what a female candidate can achieve with her potential and not what she has to contribute. A good description of the tasks that need to be mastered is thus much more important than a long list of requirements.
Nowadays, the growth mindset is also particularly crucial when seeking talent. What is key here is being able to attract people who can handle rapid change, solve problems and have the ability to keep up with the pace of business developments. This applies equally to both men and women.
Finding the right words
A scientific study on 4,000 job descriptions revealed that a lack of gender-specific formulations can have a considerable impact on the recruitment of management figures. This is true, in particular, for difficult-to-fill positions in which women are under-represented. The researchers initially found that the communication style of women is more emotional than that of men. Furthermore, women frequently use words that regarding the social context. The subtle yet systematic formulation differences in the job advertisements therefore have a strong influence in how there are perceived and the later behaviour of job seekers. If this fact is not taken into account, female applicants may unconsciously get the impression that they do not fit the advertised position. Two examples of how formulations differ can be found below:
Example 1: Description of a development firm
Feminine: We are a development team that maintains long-term relationships with many satisfied clients. We endeavour to stand out from competitors through our quality.
Masculine: We are a leading development office that has many influential clients. We are determined to set ourselves apart from the competition.
Example 2: Responsibilities in the area of development
Feminine: Provision of support to the project team in a manner that benefits the company. Provision of support to clients in meeting their objectives.
Masculine: Management and leadership of project groups with respect to project progress and the precise monitoring of tasks. Assumption of responsibility for compliance with client objectives.
There are now numerous firms that successfully attract more applications from female job seekers thanks to a careful writing style in their advertisements. This also increases the probability that the position will be filled with a suitable female candidate. The job platform jobs.witty.works only lists vacancies that are specially formulated for women.
Unconscious prejudices impact recruitment
Behavioural economics studies also show that most processes at companies are subject to unconscious thought patterns or biases. Recruitment and promotion processes as well as wage negotiations, in particular, are affected here. Each and every one of us, regardless of whether male or female or higher or lower in the hierarchy, have these thought patterns and introduce them to these processes.
Unconscious prejudices unfortunately often negatively impact women and other minorities. It is thus more difficult for them to shape a career and be successful. They stumble over invisible hurdles that are neither consciously perceived by themselves nor the interviewers or their line managers. The so-called “glass ceiling” is the most obvious symptom of the unconscious bias that we see at almost every company. This cannot be eradicated with a pure behavioural change towards greater awareness only. However, by shaping processes and structures within a company in a more objective and structured manner, we can limit the effect of this all-too-human mechanism.
Culture as a breeding ground
In order to exploit the full potential of diversity at companies, the following conditions need to be met:
- Participatory management behaviour: managers take the suggestions of their employees seriously and use them as an opportunity
- Openness for cognitive diversity: this describes a dynamic in which employees feel free to express their opinion
- Diversity is on the strategic agenda of the management board
- Frequent interpersonal discussions among employees
- Equal wage for work of equal work
The study “The Mix That Matters: Innovation Through Diversity” shows that participatory management behaviour is the most important aspect. The second most common requirement for innovation is an openness for cognitive diversity, which was stated by 62 per cent of companies.
Diversity is becoming a growth imperative
Dion Weisler, CEO of Hewlett-Packard (HP), has called on his distribution partners to adopt a more diverse structure. If they fail to do so, HP will no longer work together with them in future. Surprisingly, this ultimatum has had a positive impact. All distribution partners have added diversity to their strategic agenda and defined their own diversity objectives. Those that have stepped up their efforts in this area have also subsequently received more orders from HP.
For companies to grow further and develop the best products and services for their clients, action is required with respect to job advertisements, the recruitment process and their corporate culture. In addition to economic factors, this is also crucial for employees. After all, working as a member of a diverse team not only generates more success, but is also quite simply more fun.
In conclusion, this path is not an easy one – but one that can still be taken. The solution does not lie in an “either or”, but in a better “together”.