Will Diversity, Equity, & Inclusion (DEI) be a predictor for boosting innovation?

Diversity, Equity, & Inclusion (DEI) can be regarded from multiple perspectives. While many CEO’s and business owners keep saying how important DEI is for their business, we still lack actual change in many larger companies and organizations. At the end of the day, is this because DEI is more than just about branding and ‘feel good’-marketing, or what does the numbers and ratings really tell us?

This was one of the things Boston Consulting Group (BCG) set out to analyze in their study from 2018, where BCG analyzed over 1.700 companies showed, that “in both developing and developed economies, companies with above-average diversity on their leadership teams report a greater payoff from innovation and higher EBIT margins”. The study shows that companies with below-average diversity scores have an average of 26 % innovation revenue reported, while companies with an above-average diversity scores lays significantly higher with 45 %.

The companies surveyed came from eight countries (Austria, Brazil, China, France, Germany, India, Switzerland, and USA) across multiple different industries. One of the most interesting findings was, when it comes to revenues driven by innovation where conditions (letting diversity and inclusion flourish) lead to performance improvements. “Notably, however, the companies where these conditions do exist report measurably higher innovation revenue—nearly 13 percentage points more than that of companies where the characteristics are weak or not present”.