In my last post I outlined how the experiment with female quotas at the World Economic Forum at Davos had ended in miserable failure, with the amount of women present at the event falling every year since the target’s introduction. The episode proved yet again that true diversity is not about ticking boxes, and companies must think about the end goal when trying to build a diverse workforce. And I’m sure we can all agree that diversity is not just a “good thing” these days, it’s a business imperative.

In a market which is changing and evolving faster than ever, being innovative and genuinely understanding your customer base are vital. And this is the key outcome which true diversity can provide. Having employees with identical backgrounds and similar education, for example, will only give you insight into customers who have a similar profile. This is something which is being experienced in Japan, a country that used to be a hub of technological innovation. Whilst in the past Japanese companies were world-leaders in terms of creativity, they are now struggling to keep up with their foreign competitors, arguably due to having almost entirely male, middle aged and domestic executive boards.

However, being truly diverse is not about simply hiring from as many different groups as possible either. They must be able to contribute to the evolution of the company. The most effective way to do this is to have a flexible business culture, which gives new recruits the space to bring fresh ideas. If your company culture is too inflexible, your employees’ innovative ideas will simply bounce back off the corporate wall.

So how do we achieve this flexible culture, without losing company values?

It is a big challenge to bring together a broad range of personalities, cultures and backgrounds under one set of values whilst still giving them the freedom to express themselves. This is an issue that faced communications giant Telefónica when they expanded their business into other areas, such as financial services, entertainment and healthcare. Although they were experts in communications, they realised that if they wanted to be successful in other markets, they would need to understand the culture of those they wished to operate in.

The way Telefónica addressed this was to have so called “incubators” for the different areas of their business. For example, the entertainment talent were all initially situated together, where they were able to maintain the culture of the entertainment business. This means that employees were in a comfortable environment to bring new ideas to the table without feeling like they were going against a rigid set of company values.

The success of this example shows the value of diversity as more than simply an HR buzzword. While many companies fear that becoming more diverse may actually reduce their competitiveness, Telefónica has used it as a method to achieve its business objectives.

If you can embrace a range of cultures and backgrounds to achieve innovation this can only be a good thing. However, as Davos proved, if you aim to achieve diversity simply for the sake of political correctness, it is unlikely to be successful.

About Helena Parry