The Paralympics have changed perceptions about diversity in sport, but should retailers start thinking about diversity in thought?
When people think about diversity, it is ‘visible’ diversity that typically springs to mind – race, gender and disability - the same areas that have been the focus of legislation for the past three decades.
But visible diversity in itself doesn’t that bring business value to organisations. It is ‘diversity of thought’ that really drives change, ideas, and innovation, because it enables the organisation to draw on a wider base of experience, knowledge and approaches.
The classic ‘box-ticking’ diversity focus of the past few decades is gradually being superseded by the realisation that diversity of thought is one of the few – and often unexplored - avenue of competitive advantage. The concept is fundamentally simple: a group of people from diverse backgrounds –geographically, culturally educationally and experientially - will have a broader set of skills and have a wider range of ideas and perspectives than a homogenous group with similar backgrounds and characteristics.
“Diversity of thought inherently brings in fresh information; independence keeps people from being swayed by a single opinion leader; people’s errors tend to balance each other out, and considering all opinions helps ensure that the results are considerably “smarter” than if a single expert had been in charge,” as James Surowiecki quotes in his book The Wisdom of Crowds.
In today’s retail market, this power of `collective difference` can be critical: the danger of having a leadership team which does not reflect or understand its customer base ought to be obvious. Retailers who refuse to leave their comfort zones and whose leadership teams are overly homogenous (‘people like us’) will ultimately lose customers and market share.
Today, more than ever, retailers need to breathe life into their ‘idea pool’ to formulate new models, new ideas and new approaches – all critical in a climate of economic uncertainty where survival is impossible without innovation. If this is true of UK retail – one of the most aggressive and competitive markets in the world – it is even more so when growth and expansion means operating in international markets.
Take Burberry, for example. With robust cash flow, zero debt, and a bullish outlook, the company is on top of its game. What’s more, Burberry is continually extending its expansion plans abroad as global demand for its luxury goods defies the downturn. Significantly, the Board of Burberry is very internationally diverse, with the top team made up of English, US, Korean, French, Singapore and Italian nationalities – and nine of the top team are female. It could well be that adopting such a positive stance in embracing difference has been at the heart of its success over the past five years.
In contrast, troubled giant Tesco is having problems at home as well as abroad, delivering its first profits warning for 30 years, pulling out of Japan and with its US business yet to make a profit. And interestingly, out of 13 members of its executive committee, 11 are white males aged between 45-58. Within the UK Retail this a common theme, with a distinct lack of senior multi-cultural teams on boards and executive committees.
Monocultural boards have for too long missed the simple truth that diversity of nationality and culture bring with them valuable perspectives and insights. We predict that the real leaders in the industry will increasingly look to a more diverse pool – in every sense – in order to drive uniqueness and first mover advantage.
- Sarah Lim is a Partner and Head of the UK Retail & Consumer Practice, global search firm, CTPartners