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When thinking about diversity, equity, and inclusion, their connection to innovation might not immediately come to mind. According to Geoffrey Moore, author of Zone to Win: Organizing to Compete in an Age of Disruption, “We are living in one of the most radical disruptions to the economic order ever, one in which the industrial product economy is everywhere being displaced by a digital services economy.”

Put another way, companies are shifting from being product-centric to being customer-centric. 

In order to effectively compete in a customer-centric world, Moore says companies must be innovative enough to transition to new organizational models and new pools of talent. If a company cannot connect its services and products to an increasingly diverse world, they won’t reach their full potential. That’s why effective innovation requires hiring and retaining a diverse talent pool. Diversity is a competitive advantage. 

Moore spoke at length about this in the “Diversity Beyond a Checkbox” podcast with The Diversity Movement’s Kurt Merriweather. You can listen to the entire podcast here.

Below are some of the key takeaways from their conversation about DEI’s role in enhancing innovation.

The world is shifting from a product-centric world to a customer-centric world

According to Moore, as the world shifts to being more customer-centric, having a diverse talent pool will be increasingly important for companies to stay competitive.

Being customer-centric means being able to innovatively adapt a company’s products and services to meet the needs of an increasingly diverse customer base. And the most effective way to do that is to employ a diverse talent pool that understands those needs. 

“If I have to go after a diverse set of customers, I need a diverse set of sensibilities. I have to be like them. They can’t be like me,” said Moore. “And so all of a sudden, the problem becomes much more oriented around diversity and inclusion because the customer is so diverse and so varied.” 

Moore likens the product-centric world to being an actor in a play, where you know what the product is, and learning and improving the script is beneficial to corporate performance and success. However, as the world shifts to being consumer-focused, it’s more like being an improv actor. 

“In times of disruption, it’s all improv. It’s all about being in the moment… just be present in the moment and align with your values,” said Moore. “This is where diversity becomes so important because if you have a diverse team, somebody on your team has seen something like this… or at least there’s a much bigger chance that somebody [has], and that person can then orient the rest of the team because they have a way of connecting to that new phenomenon.”

As a company grows, transitions, and transforms, different leaders are needed for each stage

In his book, Moore describes four different zones, each with its own culture that’s optimized for the mission of the zone. The four zones are:

  1. Performance
  2. Productivity
  3. Incubation
  4. Transformation

“There are these stages you go through in a life cycle where you have to change your focus on innovation from being incredibly technologically innovative, to being very application use-case oriented, to being very competitive against other product guys, to being very customer-centric,” said Moore.

Companies with a rigid command-and-control hierarchical model are more likely to keep the same leader in charge during those four stages. A more innovative company will find the right leader to guide employees at each stage based on the goals of that stage. For the zones to work effectively in achieving their respective goals, it’s important to know which zone you’re in and understand the playbook for that zone. Moore says honoring and respecting all four zones and understanding how they fit into the overall corporate mission will optimize success for the company. 

To honor the other zones, Moore says “you have to listen to them, you have to be empathetic with them.” Listening is critical for learning and development.

In order to hire the right leader, it’s important to cast a wide net to capture diverse talent. DEI combined with innovation at all levels can help position companies for competitive success during a time of transformation and growth. The wide variety of skill sets, experiences, perspectives, characteristics, and traits will help companies better serve their diverse customer base.

The collaboration culture model is better suited to serve a customer-centric world

In the 20th century, the product was the scarce ingredient. Now, the customer is in high demand. Companies that are innovating based on how to solve customer problems are the ones gaining market share. But they can’t serve their customers if they don’t understand them. That’s why diversity and inclusion is so critical to competitive advantage.

As we shift from a product-centric world to a more customer-centric world, Moore says the collaboration culture model is increasingly more important and necessary to be competitive. The collaboration model differs from the competitive model, which is better suited to serve the product world. Companies will always have both models, but the collaboration culture model is winning share. 

To better compete, company executives must shift away from the hierarchical command-and-control model from the 90s and be intentional about creating a company culture that fosters a collaboration culture.

Companies are now seeing more collaborative infrastructure designed to nurture teamwork and collaboration among employees at different levels in the company (and oftentimes from different generations). Examples include: large shared flexible workspaces instead of assigned cubicles, virtual meetings such as Zoom and Google Meet, and communication platforms such as Slack and Google Hangouts.

The collaboration culture model requires a diverse talent pool and an inclusive corporate culture to have competitive advantage

Increasing the diversity of talent is necessary for companies to become or remain competitive.

Another analogy Moore uses is comparing a homogeneous team (a team made up of people with similar points of view, skills, and life experiences) to a single-crop agriculture economy. When the crop grows well, the economy is great. But if a bug takes out the crop, the entire economy is doomed. That’s why growing a bunch of different crops is important to protecting the economy. That’s why diversity is important. Heterogeneous teams made up of a mix of genders, races, cultures, and ages allows for a wider range of perspectives, ideas, and life experiences, all of which can benefit — and protect — the company.

“Hiring for diversity, however, is easier said than done,” said Moore. “Too often we start with a diverse pool of candidates and end up hiring someone all too similar to ourselves. We say they are the best person for the job, or we say they are the best fit for our culture. Thus, homogeneity quietly suppresses heterogeneity.” Below, Moore shares two questions to ask during the hiring process to avoid hiring similar people.

A diverse talent pool is just the first piece of building a collaboration culture. Creating and fostering an inclusive corporate culture that nourishes diversity and allows it to thrive is critical for success. 

Fostering an inclusive corporate culture is key to retaining a diverse talent pool that optimizes a collaboration culture 

Hiring a diverse talent pool isn’t effective if you can’t retain the hires due to a corporate culture that doesn’t understand or value diversity. It’s critical that all leaders and employees understand their role in creating and nurturing an inclusive culture. This means making the work environment a place where everyone can not only survive, but thrive. 

The way to do that is to proactively take steps to learn and understand what DEI means, how to incorporate it into your company’s culture, and how to communicate it consistently company wide so that everyone shares the same vision.

Without ongoing retention of a diverse talent pool, a company cannot realize the full potential of a collaboration culture model. Partnering with companies like The Diversity Movement can be an effective first step toward that goal. 

Leading heterogeneous teams requires humanity-trained leadership 

If you ask any company executive how they feel about diversity, equity, and inclusion at their company, they will tell you it’s important and they value it. They’ll also likely tell you they’re trying — and have been trying — to improve DEI. 

Why is it so difficult? And why are so many companies falling short?

It’s not because they don’t want it. It’s because it requires a systemic shift in culture and attitude that can be challenging to execute. Improving DEI isn’t like a new software program or technology platform that can be rolled out across a company with training sessions. It involves humanity-trained leadership that requires soft skills and emotional intelligence. This means leaders who value each of their team members as a human being, not just someone who performs tasks or fulfills a specific need. Leading with humanity means using emotional intelligence to go beyond what their team members are doing, to understand what they’re thinking and how they’re feeling. Open, transparent, and authentic communication is key to fostering a culture of mutual respect and decency.

DEI is a social value as opposed to a skill set. You’re not teaching a new skill; you’re teaching a new or different way of thinking. It requires self-reflection, an open mind, and for some, an attitude shift that may cause feelings of discomfort. That’s not something that can be easily taught or learned without the appropriate and necessary soft skills.

One of the challenges many organizations face is the lack of soft skills among their leadership teams. Many companies also lack the diverse talent pools needed to optimize the effectiveness of a collaboration culture.

During the podcast, Kurt Merriweather from The Diversity Movement discusses an upskilling crisis in the area of soft skills.

Upskilling describes a corporate trend that provides or facilitates continuous learning for their employees by providing training and development programs. Most of the time, upskilling occurs in the area of technology to expand employee skill sets and minimize skill gaps. By upskilling employees, companies can improve retention and productivity by allowing existing employees to advance in their jobs or find new opportunities within the company. 

“One of the things that we talk a lot about when we think about diversity, equity and inclusion is building high-performing multi-generational, multicultural teams as being the core to being successful,” said Merriweather.

What TDM is seeing among their clients is that there’s a gap in soft skills that starts in college; that universities and organizations that hire recent college graduates are not preparing young people with the soft skills they need to be successful in building diverse teams. Organizations can solve this by proactively providing ongoing training and development to ensure they’re fostering a culture of respect and inclusion, open and transparent communication, and continuous improvement. 

A commitment to a DEI-enhanced collaboration culture must come from the top

Executive leadership’s vocal commitment to creating and maintaining a collaboration culture inclusive of DEI is essential for success. Moore points to the CEO of Salesforce Marc Benioff as a great example; specifically, Salesforce’s V2MOM alignment process. V2MOM stands for Vision, Values, Methods, Obstacles, and Measures. 

“A management system which doesn’t engage the heart is a mistake in a team-oriented culture because you need the team to make sacrifices — personal sacrifices, team sacrifices — to succeed,” said Moore. “People will only make sacrifices when they’re brought into [your] vision and values. And if you don’t articulate vision and values, then you’re just leaving it to chance as to whether they buy in or not.” 

CEOs must hold themselves accountable and be intentional about seeking diversity

Moore says that it’s not enough to say you support and value diversity. You must hold yourself accountable to achieving diversity. Company leaders cannot fall back on the excuse that they can’t find diverse talent; they must go seek diversity, welcome it, and create a culture that embraces it and allows it to thrive.

Near the end of the podcast, Merriweather asks Moore what CEOs who lead homogeneous teams of primarily white men can do to make a positive difference. In his response, Moore references head of Ellevest and former Citigroup CFO Sallie Krawcheck’s talk at Dreamforce in November 2019: 

  1. Instead of asking: “Is this person the best fit for our culture?” Ask: “Is this person the best add to our culture?”
  2. Instead of asking: “Is this person the best one for the job?” Ask: “Is this person the best one for the team?”

“The idea was, instead of asking somebody to be like us, we’re actually trying to say, ‘what new characteristic could we add to the capability that would give us the most leverage from the novelty of that skill?’” said Moore.

Corporate leaders hold themselves accountable to metrics like profit, sustainability, and growth, but they aren’t holding themselves accountable to DEI metrics, even though there is data that shows improving diversity improves overall company performance.

Moore closes by saying that when leaders don’t hold themselves accountable to improving diversity, “it’s not okay. Not only for social reasons, which is a big reason, but it’s also not okay for competitive reasons either.” 

In short, when it comes to supporting DEI efforts, it’s not only the right thing to do from a social equity perspective, it’s also the right thing to do from a competitive and bottom line perspective. 

To hear the full interview, check out the podcast episode here.