Differentiation and Innovation: A New “D&I”
Boom! Almost overnight, the world’s flow of money and people have come to a crawl. In the United States, over 26 million workers filed for unemployment. And in these moments, every entity, whether public or private, is rethinking its survival. The best organizations were ready for a pivot. They may not have known a crippling pandemic was on the horizon, but they knew the world to be dynamic. And because the world is dynamic, they knew their future is only as sure as their ability to outsmart their competition; and apparently a virus. Meanwhile, globalization and access to information did not slow down. In fact, they’ve become more crucial as knowledge and equipment cross borders at the speed of light and freight. The businesses, governments, and non-profit organizations that already had teams poised to think way outside the box are winning or, in some of the worst hit industries, at least mitigating their losses.
These winners, and loss mitigators, were gaming out strategies and processes well ahead of the crisis, and ended up with an advantage. They hired, developed, and tasked the best people they could find. They put work into challenging their assumptions, and retiring ideas and procedures that did not serve their purposes. The ferocity of these entities is marked not by their ruthless acquisition of businesses or shutting down their competition, but by their dedication to looking for their edge anywhere they could find it; and in any person that can provide it.
When it comes to the private sector, in 2018 The Boston Consulting Group concluded businesses that find the best talent are more likely to have:
Increased revenues
Increased earnings before investments and taxes
Increased overall profits
Arguably the most relevant metrics for any business!
These companies understand they cannot let the best talent languish on the sidelines, rather they want that talent front and center. In fact, that same study found that when businesses seek out the best talent, despite where they find it, they are more agile, more capable and definitively more innovative.
Why?
Quite frankly, the search for talent took them off the beaten path. They were willing to go into the proverbial diamond mine and get a little dirty to find the biggest gems. According to a McKinsey study published in 2015, companies in almost any industry across the world prospered when they sought the best talent no matter the source.
Imagine you are looking for a competitive advantage. Would you go where your competition is going to find it? Or do you look off to the margins, and turn over a few more stones, to find the untouched talent waiting to be called into the game? Businesses have a choice, unlike governments, which are at the will of their respective constituents, or non-profit organizations, which are at the mercy of their donors. A business can make tough decisions strictly by focusing on what is best for them and their stakeholders.
They can institutionalize innovation by building a recruiting team and human resources department that focuses on bringing in top talent, training them to think at the highest level, then releasing them to be brilliant. That talent can come from the Ivy League or a street corner, in the boardroom or in the mailroom. In any case, they search early and often; in the good times and the bad. The companies that want to accrue pivot potential they can cash in during a crisis do not wait for the crisis to justify their decision! It’s in their DNA.
The best companies dare to differentiate their leadership. They understand that a homogenized executive team is going to struggle to challenge itself to come up with new proposals. But when a company is bringing in top talent from across the spectrum of possibility, they are going to have that differentiation baked into its DNA from the moment its top leaders made a decision not to handicap themselves. According to a 2016 study from the Peterson Institute for International Economics, just the presence of gender differentiation, that is to say highly qualified women, in leadership positions or on boards made a significant difference in the performance and profitability of those companies. Differentiation means having different ideas, different perspectives and, most importantly, different voices that can weigh in (equitably) on decisions and directions.
So, this new D&I, differentiation and innovation, is not synonymous with diversity and inclusion; most commonly referred to as “D&I.” Differentiation and Innovation is supplemental. Where the goal of traditional D&I is to improve demographics, our D&I is focused on performance. And where performance is typically used to defend traditional diversity and inclusion with claims that it doesn’t hurt, we use our D&I offensively. You're handicapping yourself and your company if you don't find, cultivate, and reward the best talent! And the best talent isn’t likely to come exclusively from one race, nationality, or gender. So if everyone around you looks largely the same, you likely don’t have the best talent, and you’re likely at a disadvantage.
The commitment with which this differentiation is pursued will be the difference between success or failure in the high speed world of 21st century business. Looking at diversity mandates instead of looking for talent will make a company reactive, vice proactive. Relying on mandates, a company will become lazy, they will seek talent to fill a void (re: quota) at a moment’s notice, rather than building processes where the best talent can be found beyond ordinary searches. Companies committed to their own survival and success will instead make sure the company’s needs fall consistently ahead of petty individual tastes, or societal norms, that have nothing to do with their actual performance.
In 2016, The Atlantic reported that the NBA not only accepted “that diversity was a moral imperative” but, as the article continues, “..was the first league to understand that diversity and inclusion are also business imperatives.” The league has since outperformed the other major sports leagues in revenue growth and attendance. The reasons are manifold, but one of the most valuable decisions their late commissioner, David Stern, made was to increase the number of leaders that could think and communicate in new and innovative ways. The NBA became the leader in social media due to that decision, and has raced away from every other major sports league in America because of it. Performance matters. And the best way to increase performance is to increase differentiation inside an organization.
If you want to innovate, differentiate! Get the best people and the best ideas into your organization quickly by hiring them from wherever they are, and no matter what they look like. Build an unbreakable process to identify, recruit, train, retain, promote, and reward the best thinkers, speakers and doers in your industry. Find them and commit to the company’s success by never looking back. Crush the competition in a blizzard of brilliance begun by talented people who feel their contribution is game-changing. Organizations across the world are learning what Pivot Solutions, Inc. shares consistently: your company’s success should depend entirely on how well the people you hire display their brilliance. Comment below on how differentiation and innovation have made your organization a success in these trying times.
REFERENCES:
https://www.bcg.com/en-us/publications/2018/how-diverse-leadership-teams-boost-innovation.aspx
https://www.piie.com/publications/working-papers/gender-diversity-profitable-evidence-global-survey
https://www.theatlantic.com/business/archive/2016/06/nba-progressivism/487610/