Solving complex challenges: Diversity and agility go hand-in-hand

By Claudia Pellegrino

There’s no doubt our rapidly changing world is throwing increasingly complex challenges at all organisations. Climate change, the COVID-19 pandemic and evolving expectations of employees and customers have all proved tough to tackle in recent years.

In response, many organisations have turned to agility. And we’ve seen the move drive a lot of success. Our research into organisational agility found those that have embraced five agile characteristics achieve better financial results.

Despite these successes, agile organisations aren’t maximising the benefits as few fully appreciate a complementary pillar of their businesses – diversity. While diversity has become a board-level target for most organisations, leaders still see it as a KPI, something to achieve that shows they’re doing the right thing. In reality, diversity is a major asset that helps tackle complexity and unlock ingenuity. In our innovation research, we found that 78 per cent of successful organisations have executive and leadership teams with a diverse range of skills and professional backgrounds. What organisations need is both demographic (gender, race, age) and cognitive diversity (different ways in which people think), to ensure end-to-end diversity of thought, experience, needs and abilities.

Of the five agile characteristics that drive success, three are particularly important when solving complex challenges: customer centricity, being built to evolve, and liberating people. Diversity is the secret to maximising the benefits of each of these.

Customer-centricity: diversity fuels a true understanding of changing customer trends

Basing products and services on past customer needs might have worked before, but not anymore. With the speed of market and technology change, customers have almost unlimited choice and will gravitate towards products and services that satisfy their specific needs. Agility puts the customer at the centre. Teams build products and services quickly based on customer needs extracted from the latest data.

Yet this can create its own challenges in our diverse society. Data-driven products might only work for the majority, leaving minorities with no choice but to choose competitors. And iterative delivery might exclude some people in the early stages, for example by making accessibility an option for later releases.

So, diverse teams are crucial to enhancing customer centricity. Having a diverse employee base will help you to better understand and communicate with customers, create bonds and expand in new markets (diverse companies are 70 per cent more likely to capture new markets compared to others). Diversity also reduces group think, allowing for fresh perspectives even when interpreting a non-diverse set of data. And last a diverse team, will better understand customers’ unique viewpoints – even more so when you bring real users into the development process.

When working with Monica Healthcare to develop an innovative foetal heart rate monitor that’s saved the lives of thousands of babies, the key was to pull together a diverse team, including real users, such as midwives and mothers. Moving towards a gender-diverse group was crucial to ensure a product was delivered that mothers would actually use during their pregnancy and which made them feel comfortable.

Built to evolve: diversity lays the foundations for Agile frameworks

If organisations are to thrive, they must evolve with the wider world. Yet we’ve found 63 per cent of business leaders are concerned their company is better at delivering business as usual rather than the radical transformation they need. They’re not built to evolve.

The Scrum Agile Framework is particularly effective in responding to unforeseen challenges. It’s designed to generate value through adaptive solutions to complex problems by promoting the principles of transparency, inspection and adaptation.

However, many organisations that are adopting Scrum are struggling to deliver the benefits. They focus on renaming roles and meetings to follow the framework, rather than on the true Scrum principles, due to a lack of diverse thinking and openness to what’s really new and can make a difference.

To avoid that, even before introducing the concept of Agile, leaders should run initiatives to inspire their people to think differently, such as cultural experiments that encourage employees to put themselves in someone else’s shoes. This will give people a new perspective of everyone’s diversity, improving their willingness to embrace change and better equipping the organisation to thrive in complexity. You’ll find this approach will encourage transparency – one of the fundamental pillar of Scrum and Agile. It also helps with the principles of inspection of progress and blockers to detect challenges and respond to them, with fertile ground for more questions that challenge the status quo.

Liberating people: a sense of inclusion empowers all employees

Empowering employees is a cornerstone of agility and complex problem solving. But empowerment comes from trust, and many studies have shown that people are far more likely to trust those who are like them. So, a unilateral focus on empowerment risks empowering only those who ‘are like the boss’.

To empower everyone to solve complex problems, weave in diversity considerations as you relinquish command and control structures in the quest for agility. To achieve this, it’s vital that leaders, together with learning about agility, focus on removing unconscious bias and re-learn how to create a level playing field for all, through psychological safety.

As we explored in our new research on leadership behaviours, true agile leaders also need to cultivate workplaces that feel kind – where people feel psychologically safe, valued and trusted. This provides the opportunity for everyone to share experiences, creating a learning environment that makes it easier to simplify complexity. Be willing to be honest about your mistakes and encourage others to do the same. Even more, be willing to accept new mistakes as well as new ideas.

Organisations don’t need to restructure their whole business to empower their people in a fair and inclusive way. John Lewis is a prime example. All John Lewis’ permanent employees are Partners who own the business. This partnership structure also involves a Partnership Council where employees share ideas with the board. Of course, such a partnership structure isn’t going to be possible everywhere, but there’s nothing stopping the board going out into the organisation and holding meaningful conversations with employees.

Leaders can’t ignore the power of diversity to maximise the effectiveness of agility in the face of increasing complexity. By putting diversity considerations at the heart of an agile transformation, they can maximise the benefits of customer-centricity, building to evolve and liberating people.

About the authors

Claudia Pellegrino PA business design expert

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