While it is well-known that diversity in any organization breeds innovation and in the long-term improves the productivity due to the diversity in ideas, it has now emerged that a similar impact also exists in team leadership. A study anchored by management consulting giant BCG has revealed that companies with above-average diversity levels in leadership positions tend to outperform their peers in terms of business innovation and report higher EBIT margins. This is true for both developed and developing countries. This study was conducted across eight countries- Austria, Brazil, India, Germany, USA, France, China and Switzerland. Diversity was measured across six parameters- nationality, gender, age, industry origin, education levels and career paths undertaken. About three-fourths of respondents even confirmed that their companies had witnessed an increase in diversity. Products and services launched over the past three years account for about forty-five percent of the revenues for companies showing above-average innovation patterns as opposed to the twenty-six percent share of the laggards. Among the six parameters of diversity studied, the one with the highest impact has been the nationality of origin, with age and education showing the least effect. Small steps to increase diversity, can lead to a significantly higher correlation in terms of innovation. This effect will be further compounded over the years due to the leveling playing field that digitization has brought about.


Uploaded Date:27 February 2018

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