Embracing Diversity Will Secure Innovation and Profitability
There is no shortage of advice when it comes to helping companies become more innovative. Innovation is what breaks the constraints of outdated methods and can transform entire industries. The problem is that a majority of these opinions are anecdotal and what works for one organization might not work for another, especially if you are crossing over industries.
But there is one piece of advice that is rooted in facts. Diversity in an organization's leadership will engender innovation and drive better financial performance. Now, this isn't breaking news. A 2016 report found that a more diverse representation in senior management will lead to greater profits. In 2018, another study confirmed the same findings. And so on.
This is huge for startups and tech companies that rely on innovation to maintain a competitive advantage in their industries, but it's even more persuasive for healthcare organizations. Despite efforts to drive progress, healthcare has remained at the edge of radical innovation. Innovation must become a priority where it's not already to reduce spending and improve patient care.
Healthcare executives that start making small adjustments to the makeup of their senior teams now will soon experience accelerated results.
Diversity as a business practice, not just a metric
There's never one way to solve a problem. We know this from our own experience in the workplace, even if we don't come from all-inclusive organizations. But as Katherine Phillips, a Columbia Business School Professor, writes: "Diversity jolts us into cognitive action in ways that homogeneity simply does not."
Our ingenuity and unique approach to problem-solving is influenced by who we are and where we're from. If the people around the leadership table all look and think like you, it's more likely to spur complacency and uniformity in thought, which is the enemy of innovation.
Differences in leadership is like a melting pot of ideas and perspectives. Sharing these viewpoints forces others to consider opinions unlike their own. As such, preparing and communicating these points demands a deliberate, methodical approach that will feel like more effort, but will prove invaluable over time.
When leaders are accustomed to diversity, they are able to recognize new opportunities to support untapped markets and unmet needs. In an industry like healthcare that is constantly evolving and towing the line of change, this level of adaptability is what innovation requires.
We talk about the future-forward impacts of diversity, yet what does a diverse leadership team really look like? In healthcare, this is a critical concept to consider because it doesn't only impact business success, but also patient outcomes.
Healthcare executives must reflect the patients they serve
Traditionally, the umbrella of diversity included people of different genders, races, and ethnicities. According to one study, companies in the top quartile for gender diversity were 21 percent more likely to experience above-average profitability. The same study also found that ethnic and culturally diverse teams were 33 percent more profitable than homogenous teams.
While profound, diversity now contains a much larger spectrum, including lifestyle choices, sexual orientation, experience, and social determinants of health. Organizations that include representation from all of these areas are 45 percent more likely to report a growth in market share than other facilities.
But we have a long way to go. Research has found that minorities represent around 32 percent of hospital patients, while only 14 percent of hospital board members and 11 percent of healthcare executives. This data is similar to a 2013 survey conducted by the American Hospital Association's Institute for Diversity, which is alarming.
A healthcare organization can't fully understand the needs of its patients, nor can it influence the necessary change to improve care and treatment for these demographics, unless members of the leadership team reflect the patients they serve. The healthcare industry demands inclusivity, and a diverse management team gives a voice to those whose lives are in jeopardy if change is not enacted.
This is even more compelling in the midst of a global pandemic as communities everywhere are being hit hard by the coronavirus. It's been proven that pro-diverse facilities have been able to successfully weather the storm of past recessions, not only because of their stronger business solutions, but because they're better able to make patient care the center of their focus.
The healthcare industry is crying out for real, equitable change. This is only possible when healthcare executives take the initiative to prioritize diversity in their leadership teams. While innovation is necessary for better patient outcomes, it also improves profitability and increased performance for organizations themselves. It's a win-win-win.