Empowerment is the Missing Link between Diversity and Innovation

By now, we all know the business case for diversity, namely, that it provides a strategic advantage that positively affects the bottom line. But to reap these benefits, managers have to empower their diverse team members and colleagues to take ownership over their work. But how to get leaders to share power, and how to do so efficiently and effectively? In this year’s Gender Intelligence Report we try to answer this very question.

Empowerment means giving up power

Yes: Organizations can make better decisions by leveraging their workforce’s diverse expertise and knowledge. Studies show that diverse teams outperform homogeneous ones when it comes to detecting errors.Diverse teams also focus more on facts and process them more carefully than non-diverse teams. Last but not least, diverse teams are likely to yield more and more novel ideas: They are more innovative. But these benefits only accrue if DE&I goes beyond mere lip service, that is, individuals are actually empowered to share their opinions and unique insights (and be heard!), try new things in inclusive environments and make decisions.

What does empowerment entail? Instead of concentrating power in the hands of a single person or a small (homogenous) group, power is distributed among many. While by the very nature of hierarchies not everyone can be at the top, it is still possible to devolve and share power. Power might not be shared formally but can take the form of expert or referent power. However, for managers, this means giving up power of their own, decentering themselves, actively championing others, and challenging their own assumptions. In fact, we have just seen play out on the world stage how rare it is for (in this case, White, older, male) men in power to empower others when US President Joe Biden finally abandoned his re-election bid in favor of his (Black, younger, female) VP, Kamala Harris, after weeks of haranguing.

The challenge of empowering diverse teams

Research indicates that managers who are demographically dissimilar from their diverse team (say, older, male boss and mostly young, female team members) struggle more with empowerment and translating it into team effectiveness. But failing to empower diverse team members can have deleterious consequences. Studies have shown how groupthink can lead to bad decisions, limited creativity, overconfidence in consensus, and insufficient feedback on decisions, all of which negatively impact performance. Not only is empowering your diverse employees good business, empowerment also aligns with the principles of equity and social justice by ensuring that marginalized voices are heard and valued in decision-making processes, which should be the goal of any organization that champions DE&I.In turn, empowerment will make DE&I efforts more credible.

Companies can learn from their own best practices

The time to empower your diverse teams is now: With the current wave of Babyboomer retirements and a cohort of diverse future leaders ready to take over, the power paradigm shift is already well underway. The good news: Many companies already practice empowerment, perhaps without being aware they are doing so! For example, in agile projects, decision-making processes are decentralized, and team members have more autonomy to adjust based on ongoing feedback. Power is shared among team members rather than treated as a resource to be hoarded. Job-sharing or top-sharing also involves trusting a colleague with making critical decisions, and sharing both responsibility and credit.

Find actionable recommendations in this year’s Gender Intelligence Report!

In this year’s Gender Intelligence Report – out on September 17 – we explore power, empowerment and diversity.  It is nothing new that women are not in power in Swiss business, making up only a little over 20% of top managers, for instance. But to truly reap the innovation benefits of diversity in the workplace, it is not enough to promote and hire more women, Persons of Color, age-diverse employees, etc. They need to be empowered to take ownership of their work, and to have a seat at the decision-making table. We hope to show how.

This year’s Gender Intelligence Report will be launched online at 4 pm on 17 September 2024.