Trend Scanner | Reports

Achieve innovation and resilience through diversity

Diversity is not only a moral imperative—it can also make businesses more effective in the long run. Our study of more than 1,700 companies around the world shows that diversity increases the capacity for innovation by expanding the range of a company’s ideas and options. And as the speed of change accelerates, innovation and reinvention are increasingly necessary to stay on top. The most obvious sources of diversity, such as gender, ethnicity, and sexual orientation, are indeed important in driving innovation, but variety of work experience and educational background is also meaningful. Importantly, these factors are mostly additive, so companies that are diverse on multiple dimensions are even more innovative. Structural diversity alone, however, is insufficient. Organizations also need an environment conducive to embracing new ideas, and they must install open communication practices, participative leadership, commitment to building diversity in top management, openness to testing multiple ideas, and other measures to unlock the full potential of diversity. Diversity also increases resilience. Like biological communities and organisms, companies that encompass more heterogeneity are likely to withstand unanticipated changes better. Enterprises that embrace diverse talent, ideas, and sources of growth will have an advantage in understanding and adapting to external shocks—which increasingly threaten the survival of individual businesses.

2018

Winning the ’20s: A Leadership Agenda for the Next Decade

Boston Consulting Group (BCG)

view report

Optimize for both social and business value

Several trends are fueling resentment toward business. The climate crisis and other negative externalities are increasingly visible, automation is sparking fear about the future of work, trust in technology is falling, inequality has risen markedly within many countries, and the most successful companies are becoming larger, more visible, and more powerful. As a result, the role of business in society is coming under question, risking the sustainability of the current model of corporate capitalism. Political institutions are not likely to address these concerns effectively in the foreseeable future. Demographics that portend lower global growth, massive public debts that limit investment, tensions resulting from international migration, and a social media landscape that amplifies extreme voices are all likely to continue fueling divisive, populist politics. The rise of China, and the growing US response, challenge the stability of multinational institutions that businesses rely on. In an era characterized by polarization, everything in business will likely become “political.” To keep the game of business going, business needs to be part of the solution. All stakeholders increasingly expect companies to play a more prominent role in addressing social challenges, which will be reinforced as newly adopted metrics and standards make their efforts and impacts more transparent. Leaders need to focus on their companies’ total societal impact—in other words, they need to make sure that their businesses create social as well as economic value. Not only can this increase financial performance in the long run, but it can strengthen the social contract between business and society, ensuring that the relationship is able to endure. Leaders will need to master the art of corporate statesmanship, proactively shaping the critical societal issues that will increasingly change the game of businesses.

2018

Winning the ’20s: A Leadership Agenda for the Next Decade

Boston Consulting Group (BCG)

view report

Big data and analytics

In an Industry 4.0 context, the collection and comprehensive evaluation of data from many different sources—production equipment and systems as well as enterprise- and customer-management systems—will become standard to support real-time decision making.

2015