How Diversity Drives Innovation: Q&A with Frans Johansson

Frans Johansson—author, speaker, and CEO at The Medici Group—has made it his life’s work to help businesses understand how they can accelerate innovation and growth through diversity. Read our interview with Johansson.

Most people support the idea of growing diversity and inclusion in the corporate world because it’s the “right thing to do.” No question there. Yet what sometimes gets missed in the discussion is why having more diverse teams leads to better ideas and decisions, and ultimately, greater innovation.

That’s where Frans Johansson comes in. Johansson—author, speaker, and co-founder and CEO at The Medici Group—has made it his life’s work to help businesses understand how they can accelerate their innovation and growth through diversity, with a client list that has included Disney, Johnson & Johnson, and Pfizer.

At Workday, we were excited to have Johansson participate in a panel discussion with several of our executives during VIBE Week, June 3-7, that was livestreamed to our employees across the globe.

I spoke with Johansson prior to the event to better understand his work in this area, including what he learned through the research for his book, “The Medici Effect.” I was fascinated by his insights, and think you will be, too. Read on for the interview highlights.

How did you become interested in helping companies understand the value of diversity when it comes to innovation?

I think it’s fair to say my whole life led me to this work, starting with how I grew up—my mother is African American and Cherokee, my dad is Swedish, and I grew up in Sweden during a time when the country was very homogeneous. So, from the beginning, my life was about bringing together different races, countries, and cultures. Years later, the world is getting to this place where everybody understands the value of breaking down silos, of convergence between industries, of diversity and inclusion.

I see two trends globally: A massive increase in focus on innovation, and a massive increase in focus around diversity and inclusion. That’s not an accident. We’re seeing an increase in emphasis and energy around these concepts because they’re linked.

Do you think most business leaders really “get it”—that diversity does fuel innovation?

Some do. If you imagine a five-point scale of where companies are on their journey of how they think about diversity and inclusion, most are at level three—they understand diversity is the right thing to do, for social or ethical reasons. There are others that are farther along on the scale and seeing the other pieces, but most are still at a level three.

Yet, I will say that corporations intuitively understand the value of diversity far more than we might think. If you go back a number of years in society, the place where you would see the most advancement around the issue of diversity would be through governments; laws were put in place that said you can’t discriminate. Governments were leading the way and corporations were trying to catch up.

That’s not what we’re seeing today—the leaders driving the evolution of how we think about diversity are on the corporate side. When there seems to be a weakening of [government] policies that support diversity and inclusion, you will increasingly see corporate leaders step in to challenge those instances. It’s almost inverted from where it used to be.

I believe the reason for that is there’s an increased understanding that if you want to be competitive as a business, you need access to diversity. And while there’s an intuitive understanding among business leaders that this is the case, what they don’t have is the actual understanding of why. And if they don’t understand why, it can hamper their ability to drive that change, or even understand, “What does this mean, and what action do I take?” There are many business leaders who haven’t gotten to that understanding yet, but we’re further along than we were.

“The more diverse and inclusive your team is, the better prepared you will be at facing shifts in the rules of the game.”—Frans Johansson

Are there proof points that can help companies better understand the impact of diversity on innovation?

I used to think that the key here is the data. You know, “here’s the data, here are the studies,” and there are many studies that show the value that diversity has on team performance.

Yet I’ve increasingly come to understand over the years at The Medici Group that business executives are not going to read a study and think, “This is how I’m going to make decisions now.” That’s because decisions are often made through a mix of experience and intuition. Their thinking is more likely, “This worked in the past, so people are going to keep doing it this way.” Yet that approach is what sometimes keeps diversity from entering teams.

That’s why the first step is to open their mindset as to how the world works. The second piece is for them to experience it, so a business leader can actually develop an intuition around the impact. In other words, they need to see what happens when the diversity of a team goes up, and they’re able to be more inclusive with a team. By experiencing it, they’ll be able to better understand what that means and then translate that into action—into decisions and behaviors. That’s how we’ve been able to make tremendous strides in the companies we’ve worked with.

Can you share a bit about what you plan to talk about at Workday during our VIBE Week?

First, I want to establish why innovation is challenging—that comes from the fact that we’re living in a world where the rules are constantly changing, but often times we operate as if the rules are fixed. Change is happening at a furious rate, and that influences how we look at people’s expertise. What does it mean for someone to say, for example, that they’re an “expert” at retail? If I ask five different retail experts what the future of the industry holds, I might get five different answers. The past is no longer a reliable guide as to how we’re going to get ourselves into the future.

So, that leaves us at a bit of a loss—what is supposed to guide us? And here’s where diversity and inclusion should be the guide. The more diverse and inclusive your team is, the better prepared you will be at facing shifts in the rules of the game. And not just being able to shift with it, but actually advance the game, and being able to change it.

Then we’ll discuss the bigger question, which is, what can you do about it? That will include ways you can apply these principles of diversity and inclusion as a leader, as a manager, and as an employee.

Do you see examples in the business world where bringing together diverse perspectives resulted in innovation, such as an innovative new product?

There are lots of them, but I’ll share this one. There’s a woman named Aheda Zanetti who moved from Lebanon to Australia as a child, and she discovered that the dress code for the Australian beach culture is not the dress code for a traditional Muslim woman. She thought, why does it have to be that way? Why can’t I combine my traditional Muslim culture with Australian beach culture? So, she created the burkini.

So, what would the market size of that be? Well, it’s enormous. Her own company, Ahiida, has grown by leaps and bounds. Now this idea and others like it has been picked up by others; Nike last year launched its Nike Pro Hijab for Muslim female athletes.

What’s interesting about Aheda’s innovation, is that if you would’ve asked traditional swimwear makers in the West about the market potential of swimwear for traditional Muslim women, they’d be like, “Well, based on the constraints of their dress—zero.” If you asked most traditional Muslim women they’d probably say the same thing; “zero.” So, both communities would independently, through their individual expertise and experience, believe there’s no market potential.

But what happens when you’re able to bring together these different perspectives? Aheda was able to bring two cultures together—the beach culture she found in Australia, and the culture of her faith. And with those perspectives, she realized the market potential wasn’t zero, it’s actually massive.

The idea here is that diverse perspectives trump experience and expertise in a world where the rules are constantly changing. We’ve become the most connected society in history, and this enormous ability to combine concepts across disciplines and cultures is the world we live in. And the most exciting thing about this realization? It points us to where innovation will happen in the future.

Learn more about how we celebrated the concept to value inclusion, belonging, and equity for all during Workday VIBE Week.

Top image photo credit: Ciro Photography

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