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Sep 1st 2021

Diversity and Inclusion Create Better Outcomes: A Look at the Science

Diversity and inclusion often arise as critical elements in education and the workplace. These people-centric concepts carry benefits beyond the human element alone — studies have shown that allowing a more diverse range of input fosters creative problem solving and leads to better outcomes. Garnering a diverse range of perspectives and backgrounds leads to richer discussions and ultimately fosters innovation, laying the foundation for higher profitability.

Defining Diversity and Inclusion

Diversity involves engaging a range of types of people. Members of a diverse group may vary in their race, gender, ethnicity, culture, disability, religion, age and sexual orientation. It can also include diversity of thought, bringing together people with unique areas of expertise. For example, if NASA needs a new spacecraft, they wouldn’t only speak with the manufacturer. They would also include diverse experts on astrophysics, rocket science, engineering and other fields.

Furthermore, simply having a diverse group of people is only the beginning. The biggest benefits arise when people from diverse backgrounds are not only present but also treated equitably and heard as an equal voice.

When thinking about diversity and inclusion, it’s helpful to understand how systems were designed with the priorities of dominant groups in mind. Thinking critically about the origins of systems — such as educational systems or a business organization — can help reveal areas for improvement.

3 Benefits of Diversity

Many of the benefits of diversity are difficult to measure concretely. Doing the right thing, creating an equitable environment and enjoying deeper connections are all worthwhile reasons to embrace diversity and inclusion. But for the sake of argument, we will look at three of the most measurable results of diversity: innovation, performance and profitability.

1. Innovation

When you need to solve a problem, the benefits of diversity become clear. For example, in a global crisis such as a pandemic or a natural disaster, international collaboration is crucial. On a smaller scale, if a company aims to invent or discover a new technology, it stands to reason that they wouldn’t want a homogeneous group of experts but rather a dynamic group that fosters creativity. Hearing different perspectives — even if they conflict with our ideas — helps ignite new ideas.

Researchers from Stanford University proved this point and highlighted what is lost when systems don’t truly include diverse perspectives in an article published in the Proceedings of the National Academy of Sciences (PNAS). They analyzed data from Ph.D. dissertations in the United States and found that “demographically underrepresented students innovate at higher rates than majority students, but their novel contributions are discounted and less likely to earn them academic positions.”

Katherine W. Phillips, an ethics expert from Columbia Business School, described in Scientific American how a social experiment showed racially diverse groups were better able to solve a murder mystery than homogenous groups. The benefits aren’t only because people with different backgrounds bring unique perspectives that can lead to solving the problem (or, in this case, figuring out the mystery). The exercise of being around different people helps everyone challenge their viewpoints, in turn leading to more creative solutions.

“Being with similar others leads us to think we all hold the same information and share the same perspective,” she wrote. “This perspective, which stopped the all-white groups from effectively processing the information, is what hinders creativity and innovation.”

2. Performance

It can be difficult to measure performance, so a team of researchers used a performance metric that is common in academia: citations. In academic publications, the number of times that a research paper is cited by other researchers can be an indicator of the paper’s success.

In a forthcoming Columbia Law Review study (currently available at an open-access online repository of pre-prints called SSRN), researchers analyzed 13,000 articles published in various law reviews over 60 years and found that “law reviews that adopt diversity policies see the median citations to their volumes increase by roughly 23 percent in the five years after adoption.”

In other words, more diversity correlates with better performance.

The researchers conclude, “If diverse groups of student editors perform better than non-diverse groups, it lends credibility to the idea that diverse student bodies, diverse faculties, diverse teams of attorneys, and diverse teams of employees generally would all perform better.”

3. Profitability

Diversity and inclusion promote innovation and better performance — in other words, they’re good for a company’s bottom line. Harvard Business Review describes research on the venture capital industry that found that diversity “significantly improves” financial measures such as profitable investments and overall fund returns.

A comprehensive report from global management consulting firm McKinsey & Company finds that not only is there a solid business case for diversity and inclusion, but diverse executive teams are associated with better financial performance over time.

According to their analysis, the most diverse companies are more likely to outperform their peers on profitability. For example, companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies with the least diversity.

A Worthy Challenge

Addressing gaps in diversity and inclusion can be a long path, but it is a worthwhile effort. Learning to navigate conflict and discomfort when people from different backgrounds come together represents a long-term investment. Studies — as well as real experiences — prove again and again the value of taking steps to promote diversity and inclusion in education and at work.

Check out Northrop Grumman career opportunities to see how you can participate in this fascinating time of discovery in science, technology and engineering.

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