Three Innovation Distinctions (Part 3) by Stephen Shapiro

This week we conclude Shapiro’s point of view on the Three Innovation Distinctions with Diversity, not Homogeneity.

DIVERSITY, NOT HOMOGENEITY
This final distinction focused on why innovation requires “Diversity not Homogeneity.” As mentioned previously, I first shared these distinctions with a group of speakers and authors who were brainstorming ways to improve the learning experience for other speakers and authors who attend their conferences. Here’s the Catch 22: Having only speakers and authors speaking to other speakers and authors does not lead to much creativity. Most of the “ideas” presented are well‐worn and don’t address the “real world” outside of the industry. Therefore, my last suggestion to the group was to increase the level of diversity at these learning experiences. This would provide a wider range of ideas, suggestions, and points‐of‐view.

How does diversity apply to an organization?

Diversity can mean a wide variety of things:
• Diversity of race, creed, color, sex, etc
• Diversity of innovation styles
• Diversity of disciplines

I won’t address the first point as that has been a topic of discussion for decades. Let me tackle the next two.

Diversity of Innovation Styles

The second point ties directly to my Innovation Personality Poker system. In the card‐based game, I discuss the four primary innovation styles: analytical, creative, planning/action, engagement. Most organizations favor one over another and therefore do not have a good balance of
styles. There’s a reason for this.

Although homogeneous teams are often more efficient (i.e., you get things done faster), having a bunch of “yes men” working for you is not the answer for long‐term growth. When people think too much alike, new ideas struggle to surface. In these homogeneous climates, innovation and growth (i.e., effectiveness) suffer. The essence of successful companies, then, is the ability to be both efficient and effective. They are able to focus on both production and innovation, not just doing things right but also doing the right things. There’s plenty of evidence that team diversity translates directly into corporate profits. Sigal Barsade
and colleagues at the University of Pennsylvania’s Wharton business school studied top management teams at large corporations in the United States. Interestingly, the more diverse the functional roles of the members of those teams were, the greater the average, market‐adjusted financial return in those companies. Diversity of the top leaders translated into bottom‐line results.

In Personality Poker, there are four key concepts:

• You need people in your organization “play to their strong suit.” That is, make sure that
  everyone understands how they contribute to and detract from the innovation process. This includes
  ensuring that you have the right people with the right leadership styles in your organization.
• As an organization, “play with a full deck.” You must embrace a wide range of innovation styles. Instead of hiring on competency and chemistry, also hire for a diversity of innovation styles. Every step of the innovation process must be addressed. You need people who are great at conducting research, delivering results, developing plans and reports, building relationships, and creating new ideas, amongst other things.
• “Deal out the work.” That is, you must divide and conquer. You can’t have everyone in your organization do everything. Instead, get them to divvy up the work based on which style is most effective at a given task. You can’t have everyone generating ideas, or focusing on planning.
• Recognize that in order to treat everyone the same, you must treat everyone differently. People have different needs in terms of how they like to be managed, how they like to be praised, and how they want to contribute to the organization. In order to attract and retain a well‐balanced organization you must be prepared to treat people as they want to be treated. To do this, you must overcome the inertia of your company’s personality and embrace the needs of the individual personalities.

I could write a whole book on the value of diverse teams. Oh, wait, I did! My Personality Poker book will be published by Penguin’s Portfolio imprint Fall 2010. Throughout, I provide examples of, and evidence for the value of having a diversity of “styles” within your organization.

But what about the third type of diversity: The diversity of disciplines.

Diversity of Discipline
A discipline is any area of expertise like biology, chemistry, physics or mathematics. You can have an organization comprised of diverse innovation styles while sharing only one discipline. A while back, I spoke with Al Bredenberg, Senior Researcher from ILO Institute. He subsequently wrote an excellent blog entry on the topic of diversity where he quotes me. He also mentions a Harvard Business Review article by Lee Fleming that suggests that companies with less diversity of discipline produce better overall financial results than highly diverse ones. “The financial value of the innovations resulting from such cross‐pollination is lower, on average, than the value of those that come out of more conventional, siloed approaches. In other words, as the distance between the team members’ fields or disciplines increases, the overall quality of the innovations falls…. But my research also suggests that the breakthroughs that do arise from such multidisciplinary work, though extremely rare, are frequently of unusually high value—superior to the best innovations achieved by conventional approaches…When members of a team are cut from the same cloth, you don’t see many failures, but you don’t see many extraordinary breakthroughs either.”
However, as the diversity of disciplines increases, “the average value of the team’s innovations falls while the variation in value around that average increases. You see more failures, but you also see occasional breakthroughs of unusually high value.” Therefore, although there is value to diversity of disciplines, the challenges seem to outweigh the benefits. What’s the solution to having a diversity of disciplines without having to deal with the inherent complexities?
Open Innovation. By working with companies like InnoCentive, you get the value of discipline diversity while having few of the downsides. You get the take advantage of a wide range of experiences while only paying for successful solutions.

The Bottom Line
Diversity can create incredible value for an organization. It can help facilitate the innovation process. It can help increase the quantity and quality of breakthrough ideas. The key is knowing the right way of managing and engaging a diverse set of perspectives. If you combine this with a repeatable innovation process and a focus on challenges, you have a powerful innovation model.

About Stephen Shapiro:

During his 15-year tenure with the international consulting firm Accenture, Shapiro established and led their Global Process Excellence Practice, delivering innovation training to 20,000 consultants. He has presented his own tried-and-tested formula for success to hundreds of thousands of people in 40 countries. Among the dozens of leading organizations he has advised are Staples, GE, BP, Dell, O2, Johnson & Johnson, Fidelity Investments, Pearson Education, Nestle, and BristolMyers Squibb. In addition to writing books and giving speeches, he is the Chief Innovation Evangelist for InnoCentive.