Diversity matters

Top level executives and the boards they report to at technology firms need to be more open to diversity across sex, age, and background, if they wish to achieve bigger and better results.

That was the rallying cry at the recent Beating the Odds: Growing Biobusinesses conference held by UK-based Cambridge University’s Centre for Entrepreneurial Learning. While tackling a range of issues affecting the successful development of biotechs throughout the day, diversity itself was left as a topic to be explored in the final session, chaired by former Imperial Innovations chief executive and Global University Venturing 2013 Lifetime Achievement award winner Susan Searle.

Discussing what makes a successful board of directors, the panel highlighted the low numbers of women who sit on them, which currently sits around 17% in the UK. This figure fluctuates across the European Union, but there is one consistent pattern: the most innovative countries, such as Scandinavia, also have the highest percentage of women board members. In Norway, the figure is more than 40%.

Indeed, one of the key difference makers in choosing the right and the most innovative decisions is to have women represented, especially in technology firms where women are more engaged consumers than men but rarely represented on their boards (see academic Vivek Wadhwa’s articles on Twitter especially).

Without that female input, a company’s board will ultimately find it harder to relate to a whole half of their potential audience, who can have more sway than their male counterparts. According to a recent study by accountants Deloitte, women’s choices impact up to 85% of purchasing decisions: “By some analyses, they account for $4.3 trillion of total US consumer spending of $5.9 trillion, making women the largest single economic force not just in the United States, but in the world.”

The Cambridge University panel also struck out at boards which retain members who are not engaged in the companies they represent and cling to seats. It was suggested that truly innovative companies should regularly assess the contribution from members of the board, and should clear a path for new talent should a current member become obsolete or just taking up room at the table, some of which can come from youth.

The youth of today face an unprecedented situation whereby, according to Professor Danny Dorling of the University of Oxford, “a grandmother in her eighties can expect to enjoy higher living standards than someone in their twenties who is in work”. With relatively high rents, falling inflation-adjusted median wages, and relatively high unemployment in some countries, it is little wonder that more and more young adults there are becoming disenfranchised with politics, business, and the wider economy. This level of wage disparity and passing the buck of debt onto the youth is tantamount to their abuse and exploitation.

And yet, the offer of youth can be extremely valuable. Young adults are much more likely to be tech-savvy and highly computer literate compared to their more grizzled counterparts, and boards must surely recognise by now how valuable it is to harness the disruptive power of the internet and new technology. Take, for example, the biggest selling media release of all time, Grand Theft Auto V, which generated $800m worldwide within 24 hours of coming on sale. This game was not made, nor was it sold to and played by, white male baby boomers staring towards the twinkling lights of retirement. This was a product of youth, not old men who handle a PlayStation pad with all the grace of a hippopotamus performing ballet.

And while entrepreneurialism is not solely the domain of the young (although the average age of a Y-Combinator start-up founder is 26), growing up surrounded by technology which would make the Star Trek actors baby boomers grew up with gawp in awe and terror certainly gives the youth an innovative edge. This same passion can be levelled up into board, executive, and senior management positions, and open the door to thinking for an upcoming generation.

Another recently study by the Centre for Talent Innovation which asked “What does it take to win in the global marketplace?” looked at what the impact of sex, age, and other forms of diversity at leadership levels can have on a company. Describing companies as showing “two-dimensional diversity” for exhibiting at least three types of both inherent diversity (gender, race, age, religious background, socioeconomic background, sexual orientation, disability, and nationality) and acquired diversity (cultural fluency, generational savvy, gender smarts, social media skills, cross-functional knowledge, global mindset, military experience, and language skills), the report found some fundamental differences in how likely innovation is to thrive in two-dimensional (2D) and non-two-dimensional firms.

The report found that companies with 2D diversity with employees who report ideas were more likely to win endorsement from decision-makers, see that idea developed or prototyped, and get developed into the market place. Further, leaders with 2D diversity where drastically more likely to ensure every team member has a voice, make it safe for them to propose idea, empower teams to make decisions, take advice and implement feedback, and share credit for success. Conversely, leaders with that diversity observed that their employees were more likely to embrace input, feel welcomed, challenge the status quo, take risks, and not be afraid to fail.

Finally, the most telling aspect of the report came in the difference between firms which improved market share and captured a new market, with diverse firms reporting 48% and 46%, respectively, compared to non-diversity embracing firms, which reported 33% and 27% successes in the same fields.

In conclusion, diversity isn’t something that’s merely there to respond to feminist criticisms, to make the youth feel like they are getting a fair shake, or to tick the equality box on the latest round of hires. Diversity delivers actual tangible results.

In bioscience or any other field that universities spin out companies into, they are generally dealing with technology that is cutting-edge, utilises modern and innovative thinking, and is based on science and facts. If it works so well for technology, why should our thinking on leadership be any different?