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Diversity Matters if You Want to Innovate

As a woman in the energy industry, I have been extremely fortunate to find many leadership opportunities in my work across multiple organizations to drive the clean energy transition.

Yesterday, I had the great honor to join the “Women Driving the Energy Transition” panel at the Intersolar North America and Energy Storage North America 2023 conference. Here, we shared a quick glimpse of the data:

While women make up 48% of the labor force overall, in the energy industry, they are:

  • 22% of the employment in the oil and gas

  • 32% of the employment in renewables

  • 11% of energy startup founders (compared to 20% overall)

Source: IEA

We, as an industry, have a lot of room to grow opportunities for women. And, now is the time to attract this top talent that is known to have inherent leadership skills when it comes to helping organizations navigate transitions (source).

We also now know the unmistakable connection between diversity, innovation, and financial performance necessary to drive the transition. If you haven’t seen all this great data, here are a few highlights from an exhaustive list of notable research studies on the connection between diversity and financial performance:

  • “Companies with above-average total diversity, measured as the average of six dimensions of diversity (migration, industry, career path, gender, education, age), had both 19% points higher innovation revenues and 9% points higher EBIT margins, on average.” (Source)

  • “Companies with above-average diversity produced a greater proportion of revenue from innovation (45% of total) than from companies with below average diversity (26%). This 19% innovation-related advantage translated into overall better financial performance.” (Source)

  • “Diverse management teams were more innovative than less diverse teams, confirmed BCG after surveying 1700 companies of varying sizes and differing country locations.” (Source)

Building (and Retaining) a Truly Diverse Team

While statistics that look at key “external” indicators like gender, race, nationality, and age are all great measurements as a starting point to determine if we are leveling the playing field, it is not enough of a measurement to know if we are truly creating fair and inclusive workplaces.

As discussed on the panel, seeing people that look like you in a job interview may be a good tool to attract talent; it’s not enough to retain talent. Once the playing field is levelled, organizations must also measure psychological safety and the ability to create diversity of thought inside the organization. Without a safe place for diversity of ideas, the underrepresented talent you attracted are at a higher risk to leave the organization because they are not being embraced or supported in their roles to drive change. Remember, with each hire to level the playing field, you are asking the organization in some capacity to not only embrace that employee as a contributor, but also as a change agent. They will not only look differently, but they will also think differently due to their unique experiences – and this is what will drive creativity, innovation, and growth.

Here are some thoughts to consider for retention:

  • Think about what your organization is doing to create safe spaces for diversity of thought and opinion. For example, do you have engineering and non-engineering voices in the room? Or do you recognize introverted versus extroverted voices equally? Is there a safe space for all voices to be heard, including those that might be underrepresented? Who is most likely to cast the deciding vote and is it most likely to come from the same people? Is this creating dangerous “group think” where one group must compete to be heard over another? Are we creating unbreakable silos making it difficult to work together? If we can’t work together, how can we innovate together?

  • Evaluate the skill sets that are valued and underrepresented in your organization. Could the organization be over rotating too heavily on one skillset? For example, energy companies tend to be very scientific, engineering dominated organizations. While world class engineers are a key ingredient to success, they are not the only ingredient. Do you have the story tellers who can communicate the engineers’ vision with mass appeal? Without the ability to communicate “the why” behind the vision, it becomes difficult to build aspirational goals that resonate across the entire company with non-engineering stakeholders like shareholders and investors. But will storytellers want to join an engineering driven company where their skillset is not valued? Can you create space for both to co-exist, work together, and be valued equally?

  • Consider the balance between curiosity, ideas, and data. How is data used in your organization? While data is important, whose data is more likely to be used to reach a decision? Does the organization favor one department’s data over another to reach a decision? While it is important that departments be valued for their subject matter expertise over specific domains, we want to drive ideas beyond “echo chambers" to create change. Does your organization want diversity of thought to drive change or maintain status quo with the same subject matters hiding behind so-called “expertise”?

  • Create the conditions for healthy debate. How safe is it to be a contrarian in the lead up to an important decision? As HBS professor Dr. Linda Hill, author of Collective Genius likes to ask - are you have the “good fights” (see her short TedTalk here). In a busy (and often understaffed) work environment, are you creating time and space for dissenting opinions? Is the organization allowing groups of like-minded people to dominate the discussions and decisions? Or, can you shake things up by asking colleagues' to swap roles during a meeting? Creating empathy by walking a mile in their shoes is a powerful tool to create healthy debate/ Are you practiced at debating, negotiating, and agreeing to disagree at the end of arguments? What are the rules for moving on from a decision and re-evaluating it later? Do you value lessons learned over who was “right”?

  • Creating culture of learning – focus on learning fast rather than failing fast. Is your organization creating empathetic, vulnerable leaders that are not afraid to lead change through rapid experimentation and learning? If the teams do not produce immediate business results, are they considered “failures”? Or instead, are these “learnings” valued for the short cuts they may provide later?

Measuring the Human Side of Innovation

All of this requires measuring the human side of innovation – your organizations’ Innovation DNA where diversity actually drives many of the KPIs for success. By measuring how teams are creating diversity in the innovation process, organizations can get beyond “box checking” and focus drives financial growth, competitive advantage, and the best innovative ideas that have the power to change the world.

Understanding it was more than the checkboxes was really one of the key reasons we wanted to start InnovationForce. Our InnovationForce platform is the first to score an organization’s Innovation DNA by measuring diversity:

  • Are innovators having healthy, constructive, conflict occurring?

  • How diverse are innovation teams?

  • Do all innovators feel seen and heard?

  • Are innovators able to be authentic and vulnerable in the process and feel safe to learn fast (rather than being penalized for failed experiments)?

  • Are teams feeling compelled to reach larger aspirational missions or personal goals?

  • Is a culture of learning through experimentation creating a bridge so organizations can pivot for the transition to future – are they able to reduce the fear and anxiety of taking these steps into the unknow to reach this future?

Final Thoughts

Today’s organizations (inside and outside the energy industry) have a couple of significant challenges:

  • Attracting underrepresented voices into their organizations to level the playing is not enough. You must also create safe places so their differences can be seen, heard, valued.

  • Prepare your organization to welcome and support these new voices. While diversity statistics may look good for checkboxes, if newly recruited talent are viewed as “outsiders” too long and not welcomed by the “status quo”, they will leave. They must get a true, authentic sense that they belong.

  • Retaining this talent is the responsibility of your organization – not the responsibility of the talent you hired to “fit in” – you must be willing to change your organization to meet them.

As the organization gives everyone a safe place to consent and dissent, diversity and innovation increases. But beware, if one group overpowers the other as you seek to create inclusive, diverse workplaces, there is a good chance this will lead to the highly talented and in-demand employees you just recruited to look for the off ramp.

If this is resonating with you and you want a way to measure diversity of thought in your innovation program, contact me directly at – we’d love to hear from you.

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