Essec Business School

As diversity issues become ever more prevalent in management, and the pressure to generate new perspectives increases due to changing economic and social environments, it has become essential to reflect upon how firms and leaders can capitalise on diversity to generate creativity and innovation and thus improve performance.  However, this causal link is not always easy to ascertain.

While continued academic and practitioner interest in the three key concepts – diversity, leadership and innovation – attests to their importance in management, it does not necessarily tie them together within a comprehensive understanding.  More often than not, there is a tendency to focus on one or two aspects of diversity in order to simultaneously talk about the difficulties of managing diversity in the workplace, and its potential positive impact on firm performance. It’s not surprising then that meta-analyses of academic studies on diversity and performance indicate an inconclusive impact of diversity on performance. 

That said, it’s important to remember that diversity is a complex concept. It targets not only the differences between individuals or groups based on status and resources, it also addresses differences in the sources and types of information to which they have access as well as the portfolio of perspectives and attitudes that are available to them.  Social identity perspectives effectively predict group conflict and in-group/out-group biases along faultlines distinguishing differences in resources, background, and perspectives.  They also assume that these distinctions are inherent to the human psyche and social interactions.  On the other hand,  an information-processing and decision-making perspective treats greater diversity as a precursor for creativity, innovation and decision quality. But how can these positive impacts be better understood and encouraged?

Leadership has the potential to consolidate differences along diversity faultlines in order to emphasize the information-processing and decision-making capacity of a diverse workforce by facilitating information exchange and improved decision quality without eliminating the positive value of differences . However, we generally observe that integration and inclusion strategies tend to acculturate ‘minority’ elements into existing frameworks, thereby reducing differences towards a common set of values and behaviours. One of our main challenges today is to create leadership models and strategies that maintain and encourage exchange between diverse elements all the while avoiding the negative consequences of diversity faultlines and consequently creating a fertile base for creativity and innovation.

Embracing Diversity While Minimizing Faultlines 

To begin to build a new leadership model which embraces diversity while minimizing these faultlines, we must first understand that leadership can be conceived in terms of ‘active’, as well as ‘symbolic’ components: the active components of leadership deal with leadership capabilities such as communication, decision-making, and strategic thinking while symbolic components are concerned with images of leadership such as representations, typologies, and role models. 

In our studies [i], we find that global team leaders develop a cognitive awareness of other cultures through their previous expatriate experiences, which they actively solicit in their interactions with their global team members.  Our findings  indicate that these leaders have developed a cultural skill set as an active component of their leadership style.

In another study [ii] looking at gender quotas for corporate boards, we posit  that it is difficult to change the symbolic components of leadership such as gender representations. Here, diversity is clearly a symbolic issue and needs to be addressed from more than just a numbers perspective: in other words, increasing the number of women is necessary but not sufficient to change the status quo and the overall underrepresentation of women in top management positions. While critical mass is important to change the dynamics of decision-making processes, we suggest that if we do not pay attention to the roles fulfilled by women on corporate boards, they may not have the symbolic impact over the long-term to change the gender expectations of men and women in the firm. 

In brief, from an ‘active’ leadership perspective, applying techniques from previous diversity experiences can help achieve the goal of embracing differences while still minimizing faultines. Likewise, understanding leadership’s symbolic components can help us move away from approaches that deal with gender inequality, for example,  by trying to ‘fix the women’, or by simply increasing numbers to create a level playing field within the status quo. A fuller understanding of the concept of diversity and leadership will help us move towards a model that questions the fundamental assumptions of existing organisations and ultimately towards new, more innovative organisational models. 

Questions and Objectives for the Future

Initial studies – including the two mentioned above – have opened a wider debate about diversity, leadership and innovation.  Major questions for the future include, amongst others: What is the role of leaders in transforming diversity based on disparity into diversity as variety? And beyond this, how, concretely, can this ‘variety’ generate innovation? Indeed, this may be an issue on which European, North American and other international practitioners and academics stand to learn from each others’ experiences through the sharing of ideas.

These are some of the issues we are set to address within the context of the ESSEC Chair of Leadership and Diversity annual conference this coming 23rd of May, 2013. But while this event will indeed focus on the role of firms as social leaders to mobilize diversity in order to generate innovation and organizational performance, work in these areas remains to be done. Realizing the full potential benefits of diverse leadership is a goal that we must share, as both academics and professionals.  

[i]  Junko Takagi and Hae-Jung Hong, 2013. "The global team leader dilemma: diversity and inclusion". In:  Gröschl, S (ed.), 2013. Uncertainty, Diversity and The Common Good: Changing Norms and New Leadership Paradigms. Gower Publ.

[ii] Junko Takagi and Shora Moteabbed, 2012. "The construction of workplace identities for women: some reflections on the impact of female quotas and role models". In: Gröschl, S and Takagi, J. (eds.), 2012. Diversity Quotas, Diverse Perspectives: The Case of Gender. Gower Publ.