Boston Consulting Group – How Diverse Leadership Teams Boost Innovation

Rocio Lorenzo, Nicole Voigt, Miki, Tsusaka, Matt Krentz, and Katie Abouzahr, Boston Consulting Group, January 2018

Boston Consulting Group surveyed more than 1,700 companies across eight countries to examine the relationship between managerial diversity, the presence of enabling conditions, and innovation outcomes. They examined the correlation of multiple aspects of diversity—gender, age, national origin, career path, industry background, and education—both individually and collectively. They found that companies with above-average total diversity had both 19% higher innovation revenues and 9% higher earnings before interest and taxes (EBIT) margins, on average. The presence of enabling conditions for diversity—such as fair employment practices, participative leadership, top management support, and open communications—is worth up to 12.9% in innovation revenue.