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Diversity and inclusion strategies for sustainable innovation: 2024

insight
May 14, 2024
9 min read

Author

Photo of author Ganesh Sahai

Ganesh Sahai

An Engineering Excellence leader serving as a Global CTO at Nagarro. He has more than 20 years of industry experience and 11 patents to his name. 

 

 

Dorota Syty
A Diversity enthusiast, exploring the secrets of a human mind and crafting neuropowered learning experience to foster organizational culture. Advocate for shaping inclusive work environment that cares for the wellbeing and encourages personal growth

As Peter Drucker said: "Culture eats strategy for breakfast". Homogenous workplaces that promote a single archetype of success stifle innovation, exclude talent, and misunderstand diverse markets, stalling their business growth. The pandemic has shown us that we must fold agility, resilience, and diversity into our business strategy, as businesses with diverse teams have demonstrated better crisis management and greater adaptability to sustain the odds. They quickly embraced remote working and developed new operating models. The new generation of stakeholders – investors, employees and consumers – also recognize why diversity is important, and they are increasingly evaluating a business's ESG efforts and social commitment before engaging with it.

Businesses today need a diverse and adaptable workforce to create a culture where inclusion and diversity play an important role and promote sustainable innovation.

Global response to diversity initiatives

In today's interconnected world, a diverse and inclusive workplace is a strategic imperative for businesses of all sizes across continents. Diverse teams rich in a tapestry of cultures, experiences, and perspectives offer a unique opportunity for innovation and creative problem-solving on a global scale. In addition, a workforce that reflects the diversity of the global marketplace demonstrates a deeper understanding of customer needs and strengthens an organization's ability to adapt to change.

So, how are countries on the global front responding to the frantic call for diversity & inclusion? Here are some statistics that show the geographic response to the diversity initiative.  

 

Infographic displaying importance of workplace diversity for selected regions

Highlights

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Women leaders for a culture of social responsibility

Statistics demonstrate that the more women are represented in management teams, the better the financial results. This statement and the hard data alone may convince skeptics. But there is much more to it than that. While the figures still show an under-representation of women, they also confirm that companies in the top quartile of female representation are up to 40% more likely to achieve better results than companies in the fourth quartile. Companies in the top quartile of ethnic diversity have a financial advantage of around 30% over others (McKinsey, 2023).

Companies with more women in leadership positions are more profitable, demonstrate greater social responsibility and offer higher customer satisfaction. Female leaders are more open to change, embrace transformation and take a collaborative approach. Women score higher than men on most leadership competencies, such as initiative, self-development and developing others, integrity, and honesty (HBR, 2019).

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A strategic cultural advantage for
performance

The return on culture is quantifiable. The seemingly intangible results of culture, such as collaboration, engagement, high morale, job satisfaction and well-being, are directly and indirectly linked to financial performance and revenue growth. A healthy culture means high employee retention, hence —high employee retention rate. According to a study by Grant Thornton, the average S&P 500 company can save 156 million dollars a year in turnover costs through a healthy culture, e.g. recruitment, onboarding or training. In extremely healthy cultures, employee retention is more than six years. Half of the employees would leave their jobs for a lower-paying position if they found a better culture.

Companies with an extremely healthy culture are 1.5 times more likely to achieve average revenue growth of over 15% for three consecutive years. Listed companies with an extremely healthy corporate culture are almost 2.5 times more likely to see a significant increase in their share price (Grant Thornton study). Engaged employees are more motivated and productive and go above and beyond in their tasks. This is reflected in positive customer interactions and the reputation of the brand.


How diversity & inclusivity strategies empower leaders to champion current trends in 2024 

The importance of diversity in avoiding bias in AI systems across all industries:

Healthcare

Diagnosis and appropriate treatment have a lot to do with gender and race. The symptoms of many diseases differ between genders and races. Skin conditions will not look the same in different skin types. Mental disorders occur differently in women and men due to differences in brain organization and function. Women show different symptoms of heart disease than men. Since they are stereotyped as being more emotional, they are less inclined to undergo the necessary tests. This also applies to Alzheimer's disease, autoimmune diseases or depression.
Healthcare-professionals standing in a line

FDA’s approach towards AI adoption

AI/ML presents both opportunities and unique challenges. In response, the FDA has ramped up efforts to establish an adaptable regulatory framework that balances promoting innovation with protecting public health.

The FDA has introduced a process for the review and approval of AI-driven medical devices known as Software as a Medical Device (SaMD). There are different levels of scrutiny depending on the potential risk of AI to patients. Here is a breakdown: 

  • Risk-based approach: the FDA considers the level of risk the AI poses to patients. Lower-risk AI can go through a 510(k)-clearance process, like existing medical devices.
  • De Novo classification: For novel AI for which no comparable device exists, a new risk category is established through a de novo submission.
  • Pre-market approval: High-risk AI undergoes a more rigorous approval process with extensive testing to ensure safety and efficacy. 

It's important to note that the FDA is still adapting its approach to AI, particularly for algorithms that can learn and adapt over time (adaptive AI).

 

Bottom line:

We cannot afford to allow AI to exacerbate existing health disparities. By ensuring that there is diverse representation in the development of AI, we can ensure that these powerful tools properly diagnose and treat everyone accurately, regardless of their background.

Finance

If historical lending data contains racial discrimination or income disparities, the artificial intelligence used in credit scoring can influence clerks' decisions on lending, interest rates or credit limits. AI can perpetuate redlining practices and deny certain populations and marginalized areas access to financial services. It can also give some market participants an unfair advantage in trading.

An-arty-image-of-Fingerprints-in-different-colors-making-a-tree

Bottom line:

The World Bank's experiment in Turkish banks paints a clear picture. Women received an average of 14,000 dollars less in loans than men due to an AI system biased against women-owned businesses. This underlines the urgent need for diversity in AI development. We need to ensure that tomorrow's financial tools benefit everyone, not just the privileged few. 

Crime and facial recognition

Biased data can lead to inaccuracies, such as classifying individuals as high-risk based on their demographic characteristics rather than their actual risk factors. Predictive policing aimed at predicting crime hotspots can be compromised by racial profiling. AI used to assist judges in sentencing and parole decisions may recommend harsher sentences for certain populations, particularly minorities who have historically been overrepresented in the criminal justice system.

Of all biometrics, facial recognition is the least accurate. It is most inaccurate for females, blacks, and 18–30-year-olds (Joy Buolamwini, MIT). This raises concerns when employed for law enforcement surveillance, airport passenger screening and employment and housing decisions. 

A-womans-face-with-glittering-lights showing facial recognition

Bottom line:

This isn't just a numbers game; it's an ethical imperative. We cannot afford to allow AI to become a tool that reinforces inequality. By prioritizing diversity and responsible development, we can ensure that AI supports everyone, especially those relying on vital social services.  

Welfare 

In scaling AI for business advantage, regulation and compliance are critical to ensure that AI adoption is done responsibly at the design, development and deployment level. In the current race, minimizing bias, maintaining transparency, and good governance are critical for ethical reasons. One obvious solution to combat bias is to foster diverse teams with non-homogeneous perspectives and inputs. The world's complexity, with all its nuances, is only fully captured when multiple backgrounds and experiences are represented. Yet only 27% of employees in the tech industry are women, and only 11% of tech executives are women leaders.

Bias in AI comes from: 

  • Unrepresented, incorrect, unobjective or incomplete data
  • Flawed, biased data that reflects historical inequalities
  • Insufficient due diligence in reviewing data points and applying mitigation methods
  • Recklessness of people developing and training ML systems.

 

Group-of-three-happy-women

Bottom line:

As leaders, we cannot allow AI to perpetuate a system of injustice. We must advocate for diverse data sets and rigorous testing to ensure that these powerful tools serve and protect all members of society, not amplify existing biases. 

Building a diverse workforce: leadership for D&I success

Challenge the Status Quo

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  • Rethink recruitment:  
    Focus on the assessment of skills and blind hiring processes. Adapting recruitment processes, including job descriptions and candidate evaluation not to discourage or mis-assess the competences.

  • Encourage diverse voices: 
    Break away from rigid hierarchies and create safe spaces for open communication. 

  • Build inclusive teams: 
    Go beyond basic demographics. Care for inclusion and diversity. Consider factors such as neurodiversity, socioeconomic backgrounds and working styles to build truly representative teams. 
Innovate the Inclusion 

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  • Mentorship circles:
    Pair experienced leaders with diverse mentees.

  • Reverse mentoring:  
    Introduce policies that meet diverse needs, promote a culture of work-life balance.

  • Flexible work arrangements:  
    Implement policies that cater to diverse needs, fostering a culture of work-life balance.

  • Unconscious bias training:  
    Invest in ongoing training programs that help employees recognize and mitigate bias.

Read more about Nagarro’s Fluidic Enterprise and learn how it combines human qualities such as intention, creativity, and empathy with AI's power. It also emphasizes AI's responsible and ethical use. 

In a world that is more connected than ever before, diversity and inclusion aren't only the right thing to do, they're the fuel for innovation and global success. By embracing a diversity of cultures, experiences and perspectives, we build teams that can creatively solve problems, deeply understand customers and adapt to an ever-changing landscape. That's not a nicety; it's a strategic imperative for businesses of all sizes.
Leslie James
Director Marketing, Nagarro.

Multivariate dimension of diversity

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Diversity also encompasses neurodiversity: recognizing the unique strengths of all brains, regardless of neurological diagnosis. This shift from limitations to potential produces exceptional creativity, meticulous attention to detail and innovative problem-solving that benefits businesses in various fields.

Neurodivergence is not just about deficits. People with different brain wiring often exhibit remarkable talents in many areas. For example, people with autism may have exceptional attention to detail and excel at pattern recognition or repetitive, tedious tasks, making them excellent testers. Many also excel at creative problem-solving due to their unique way of thinking. The visual strengths of people with dyslexia make them excellent designers. These strengths come into play in practice and promote innovation and efficiency in various fields. 

Studies and industry leaders overwhelmingly point to diversity as a key driver of success.

Rosalind Brewer, COO of Starbucks, underscores diversity as a business imperative, not just a moral choice, highlighting its role in driving innovation and market growth. 

Satya Nadella, CEO of Microsoft, discusses leveraging diversity to enhance creativity and problem-solving within teams, improving product development and customer engagement. 

Indra Nooyi, former CEO of PepsiCo, stresses the importance of a diverse workforce in understanding and serving global markets effectively, demonstrating how inclusivity leads to better business decisions and outcomes. 

The power of Neurodiversity at your workplace

A table showing how Neurodivergent talent can help at the workplace

For a long time, neurodiversity has been seen as a challenge and neurodivergence as a barrier to fully thriving in the corporate world. Recognizing the unique strengths of all minds and identifying them as superpowers unlocks a wellspring of creativity, innovation, authenticity, and imagination. Diverse teams think differently, solve problems in new and original ways, and drive innovation in the volatile and unpredictable AI era. They are the key to a successful future where all perspectives are valued.
Dorota Syty
Diversity expert, Nagarro

Call for leadership to take the charge & lead the change 

Leaders must embrace diversity and inclusion (D&I) as strategies, not just HR initiatives. 

On the road to the ideal: #NoLabels and more 

Move beyond rigid labels and hierarchies and hierarchies to create a truly inclusive and innovative culture and HR policy. The #NoLabels approach empowers everyone, regardless of background, title, or diagnosis of "neurodivergent." This creates a safe space for open communication where employees can initiate and shape positive change. Effective implementation of #NoLabels requires tangible adjustments to policies and buy-in from managers to ensure that training is put into practice. When everyone feels valued and able to contribute, the organization thrives as a collaborative unit that fosters innovation and well-being.  

How can the effectiveness of DEI practices and DEI efforts be measured? Analyse these factors:  

  • Employee sentiment through regular surveys to measure the inclusivity of the workplace culture.
  • Representation of diversity at all levels of leadership compared to industry benchmarks.
  • Analysis of pay equality between different demographic groups.
  • Retention rates of underrepresented employees.
  • Success rates of diversity-focused recruitment initiatives.
  • Supplier diversity.
  • The impact of diversity and inclusion training programs on employee behavior and attitudes.   
The key to true innovation and lasting success lies in embracing change. Leaders must champion diversity and inclusion and foster a culture where everyone feels valued and has the opportunity to bring their unique perspective to the table. By challenging the status quo and introducing new practices, we can unleash the full potential of our teams and take our organizations to new heights.
Ganesh Sahai
CTO, Nagarro
Create a culture where inclusion and diversity play an important role and promote sustainable innovation.

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