NA recent study suggests that increasing the diversity of management or leadership teams results in ever greater innovation and better financial performance. In developing economies and developed economies, firms with more diversified management or leadership teams than average indicate a greater reward for innovation and higher EBIT margins. Even more persuasive, companies can start generating profits with relatively minor changes in the makeup of their top teams.
For business leaders, it's a clear path to creating a more innovative organization. People of different backgrounds and experiences often see the same problem in different ways and find different solutions, which increases the chances of success of one of these solutions. In a rapidly changing business environment, this responsiveness allows companies to better adapt. This argument has always had an intuitive meaning, and we now have some compelling correlations to add to the case.
Diversified Boost, Innovation, EBIT
