Three Ways Diversity Facilitates Entrepreneurship

“Variety is the spice of life!” Many have heard this saying before and may now overlook it as as cliche. However, variety is a major asset in the corporate world. In fact, it’s called diversity, and numerous individuals would acknowledge that “diversity is the spice of business.”

Diversity is a broad term that reflects an extensive array of elements. Nevertheless, both surface-level diversity characteristics — gender, age, race, ethnicity — and deep-level diversity characteristics — ability, personality, background, values — have the potential to influence business outcomes.

According to The DiversityInc Top 50 companies for diversity, Sodexo, Deloitte, Coca-Cola, Microsoft, Walt Disney Co. and AT&T are a few examples of thriving companies that have been recognized as dedicated to embracing workplace diversity. A diverse workforce possesses a plethora of wide-ranging skills, experiences and mental models that can be harnessed to better serve customers. As a result, companies that inject these skills in their employees can more positively influence the company’s bottom line. The varied knowledge, skills and abilities that a diverse workforce contributes also allows for greater creativity and innovation within an organization.

Creativity — the conception of useful, new ideas — and innovation — the implementation of useful, new ideas — are at the heart of corporate entrepreneurship. The latter, also termed “intrapreneurship,” refers to the pursuit and introduction of new projects or ventures within an already established organization to aid or support either internal or external stakeholders.

Corporate entrepreneurship is important because the pursuit of opportunities that allow the development and application of useful, new ideas can result in substantial rewards such as more efficient and effective organizational processes, or new and/or improved products and services to market. One company that expects corporate entrepreneurship is Facebook Inc.

The company’s “Hackathon” has become a tradition, where every few month employees spend the entire night working on bringing their ideas — which must be separate from their day job — to fruition. Facebook’s “Like” button, “Chat,” “Timeline” and “Video” were all conceived at a Hackathon.

Another company that has built and sustained a culture of innovation and that promotes corporate entrepreneurship is 3M Corp. Employees at 3M are urged to use 15 percent of their time to work on their ideas, which they look forward to becoming company products in the future. Both Facebook and 3M are Fortune 500 companies.

Considering the importance of intrapreneurship for success, it is necessary for companies to be equipped with the appropriate human resources to enable them to excel intrapreneurially. A diverse workforce is a major step forward.

Here are three ways how diversity aids corporate entrepreneurship:

Diversity enhances vision: One of the most important ingredients for innovation and corporate entrepreneurship is diversity, because different individuals often see the world through different lenses, and these different perspectives can contribute to better ideas for organizations to bring to fruition. Microsoft Corp., for example, actively recruits and accommodates workers with disabilities. It is no surprise, therefore, that the company is the leading provider of assistive technology to the differently abled community. Diverse teams that are comprised of people with different abilities and from different functional backgrounds, age groups, nationalities, ethnicities, cultures, etc., have been shown in studies to perform more effectively than non-diverse teams. Diversity enables a better understanding of different markets, so innovative efforts can be geared toward serving them more effectively.

Diversity challenges the status quo: Diversity aids in corporate entrepreneurship by forcing organizations and teams to challenge the status quo. When employees work together, there is often the risk of “groupthink,” but diverse teams may challenge their team members to approach problems from a different perspective. A recent study found that the world’s best innovators regularly talk with people who don’t see the world as they do to accumulate new ideas. Richard Branson, founder of the Virgin Group, definitely subscribes to this ideology, and he is also a strong advocate of corporate entrepreneurship.

Diversity influences organizational culture: A firm that genuinely embraces diversity as a core value possesses a competitive edge over their less diverse counterparts. Over time, they are able to foster a more cohesive unit where organizational members feel free to allow their true identity to be a part of the organizational identity. There is a strong organizational culture where employees can work together in unity, despite their differences and truly harness the creative ideas of their diverse workforce.

Nike, for example, considers diversity to be an essential component of its culture. “Diversity and inclusion is fundamental to Nike’s performance. It’s what makes us better. It’s what makes us smarter. It helps our business grow and helps us connect with consumers,” said Gina A. Warren, the company’s vice president of global diversity and inclusion.

Organizations need to pay close attention to the role of diversity as a facilitator of corporate entrepreneurship. Here are some tips for organizational leaders to consider as they engage in practices that embrace diversity and promote corporate entrepreneurship:

Attraction and selection: Keeping globalization in mind, and considering the diversity of national and international markets, it is advised that leaders recruit applicants and hire employees that are diverse in terms of gender, age, race, ethnicity, national origin and abilities. Likewise, within the organization, the formation of diverse teams will aid in the aggregation and application of more ideas that can be transformed into useful products and services for both internal and external customers.

Intellectual stimulation: Once diverse employees have been hired, they should have a voice in the company and should be able to use that voice to challenge previously accepted assumptions. They should have access to training opportunities that focus on improving creative thinking and problem solving skills, and should be encouraged to think outside the box and use these skills to develop and apply new ideas.

Incentivization: Encouragement to develop and apply new ideas is still insufficient. Employees need to be rewarded for their intrapreneurial efforts, and these rewards should be amply appealing to motivate them to innovate.

Positive cultural preservation: An organization must create a positive culture that embraces diversity and promotes corporate entrepreneurship, and when it has been created, it must be preserved via progressive HR practices that include selection, training and development, performance evaluation and reward allocations.

Firms have to ensure their survival by finding novel and innovative ways to attract new customers and increase revenue, and by embracing a culture of diversity and corporate entrepreneurship, this can be achieved.

Simone T. A. Phipps is an assistant professor of management at Middle Georgia State College. Leon C. Prieto is an assistant professor of management at Clayton State University. They can be reached at