4 WAYS DIVERSITY PAY$

In the era of mass connectivity and mobile talent, here are 4 dimensions that will maximise your organisation’s chances of survival.

AMID the swarming thousands craving water food and shelter in Europe wifi and mobile phone power was in high demand.

This is the mass connectivity that we’ve heard so much about at work in our world - and it multiplies massively. There are an estimated 65 million people on the move.

Even in trouble spots word and movements spread fast thanks to cheap, ubiquitous technology, making people and their aspirations more mobile. There are 7 billion mobile phones on the planet, nearly two billion of them smart phones. That number will hit 5 billion with 80 billion connected devices worldwide by 2020, according to Forbes Magazine.

We truly have become what The Economist describes as a planet of “phono sapiens”.

What has this to do with us here and our daily challenge of trying to run our businesses and manage our teams? Plenty.

Talent, not capital, will be the key factor linking innovation, competitiveness and growth in the 21st century, says World Economic Forum executive chairman Klaus Schwab. In the forum’s Human Capital Report 2015 - its first - he describes how technological, geopolitical, demographic and economic forces are profoundly reshaping labour markets. How nations and organisations develop their human capital throughout life drives competitiveness.

Rather than the traditional economic divide between emerging and developed nations, Schwab says, we should think instead of nations as innovation rich or innovation poor.

In this context, with both a massive pool of latent human capital and a growing shortage of talent, government, business, educators and individuals need to do three things. They need to better understand the global talent value chain, re-think the notion of business as a consumer of ‘ready-made’ human capital, and proactively seek out, engage and develop people’s potential.

Those who don’t, might have pause to reflect, like the character in the Ernst Hemingway novel. “How did you go bankrupt?” he was asked. “Two ways. Gradually, then suddenly,” was his reply. 

Its more critical now that the people eating our lunch aren’t just the usual suspects, they come from everywhere and there is no place to hide. We see the impact of “jugaad” innovation from Africa, South America and India’s Silicon Savannah at work - approaches that are “fast, frugal, flexible and inclusive”. This has brought cheap, mobile phone Apps such as the money transfer platform M-Pesa and the solar power service M-KOPA, to millions. Such thinking inspired the likes of the Commonwealth Bank in its purchase of South African start up TYME (take your money everywhere).

In China, Siemen’s engineers developed cheap, easy to use CT scanners promptedby a shortage of doctors. They produce results faster, put out less radiation and use less energy while slicing nearly a third off the cost of treatment. They’re now being commercialised in the US. 

For a genteely aging and declining western nation such as Australia, in what Tufts University calls the digital innovation Stall Zone, we are seeing the inevitable decline in productivity and standards of living.

In our work over the past two years we’ve identified organisations who set out to make the most of their human capital to adapt faster and create new products, services and markets. We’ve examined the systematic approach of Scandinavian countries in using gender diversity to drive innovation which has sparked new products and markets.

We’ve seen more than 1000 leading companies sign on to the UN’s Women’s Empowerment Principles and scores of CEOs who are championing gender equality and inclusion because its fair - and it drives better performance.

Why does gender diversity matter for innovation and growth? Decades of research shows that organisations with more women in leadership roles do better - societies too.

Advocacy group Catalyst outlines 39 pieces of research that show how diversity (including gender, racial, sexual orientation and cognitive difference) boosts performance. Credit Suisse’s landmark study of 3000 companies across 40 countries is suggestive of what is known in the medical world as the The Dose Effect (see graphics). That is, the more women in senior roles, the better return on equity. Organisations with greater gender diversity in operational roles showed a 27 percent higher return on equity and a 42 percent higher ratio of dividend payouts. It also found that women CEOs made fewer acquisitions and more divestitures than their male peers.

Add to that McKinsey and Co’s 2015 research that showed listed companies with higher levels of racial and ethnic diversity were more likely to have financial returns above the national industry median than those who do not. The figure is striking - 35 per cent more likely.

And, confounding the notion of the solo genius at work, London Business School research has found that gender-balanced teams create conditions that maximise experimentation, necessary for boosting creativity.

The data is in and it is compelling. Organisations where women do well also do a number of things well. They’re inclusive, open, fair and tend to have a mindset focused on the longer term. But what we know also know is that unless you intentionally include women, the system will unintentionally exclude them.

Put simply, if you are a leader or a board focused on performance and risk, it is time to step up.

In New Women, New Men, New Economy: how creativity, openness, diversity and equity are driving prosperity now! we’ve identified the four dimensions that organisations need to invest in to maximise their competitiveness in a resource constrained, globally-connected economy. These dimensions help create a culture of innovation and build the trust of employees, customers and the community, now critical if your organisation is going to be sustainable over time.

They are: Creativity - once the domain of arty types is a core business competency and can be learned. Creativity is the first stage of the innovation cycle. Creativity ignites competitivess.

In an Open world there’s no place to hide so you need to be prepared to share and build on information - fast. There are plenty of people trying to build walls to constrain this mass human mobility but our need for human connection will defy them. As Martin Luther King Jr said we need people who build bridges not walls to help us tackle our big challenges.

Diversity boosts performance and problem solving. Its about inclusiveness and getting the best of all the different perspective around you. And, Equity - fairness, helps teams thrive and creates long term, sustainable value and community. We call this the New Economy CODE.

But what’s important is the glue that binds these four dimensions together. These are organisational intelligence - the capacity to generate new ideas and adapt quickly to changing circumstances; agile and responsive systems and behaviours that build collaborative and trusting environments.

To get our heads around this requires us to recognise that the future of business is different so we have to do things differently. This means busting powerful social norms and assumptions around how we work, lead and what it means to compete; conventions which patently no longer fit the world we’re in.

That’s why we’re seeing movements like the more than 100 CEOs whose organisations employ more than 1 million people championing gender equity. Australia’s world leading Male Champions of Change program recognises that diversity creates a powerful performance dividend - and its the right thing to do.

Things you can do right now:

1: Intuition borne of years of business experience can be unreliable in this new environment, so look for data to test against your assumptions and reflect that in this environment, we don't know what we don't know;

2: Mix it up - skills, perspective and experience. Insist on 50-50 gender split and diversity - in the room, around the table, in your team;

3: Make innovation and experimentation everyone’s responsibility and find simple ways to ensure you figure out which problem you are really trying to solve. We start with the strengths: what’s working and how can you build on it and then you can focus on what you can improve.

Narelle Hooper and Rodin Genoff, co-authors New Women New Men New Economy (Federation Press, Sept 2015).