Can Diversity Management Thinking and Practices Help Social Enterprises to be More Innovative?

This paper led naturally from the social innovation paper in my previous blog post and presented me with an opportunity to work with interesting colleagues on a new area for me – diversity management.  We wrote this paper in 2008 and the research question that prompted this work was “what is the potential for diversity management to contribute to innovation in social enterprises?”

Bridgstock R, Lettice F, Ӧzbilgin M and Tatli A.  2010.  Diversity Management for Innovation in Social Enterprises in the UK, Entrepreneurship and Regional Development, Vol 22, No 5, pp1-18.

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We used the UK government definition of a social enterprise, which is “a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or community” (Office of the Third Sector, 2006 – now called Office for Civil Society).  The study involved a quantitative questionnaire survey in 2006, with 285 responses from diversity officers across a range of organizations in the UK.

From the survey:

  •  85% of respondents believed that diversity management promotes high performance
  •  83% believe that diversity management fosters creativity and innovation in their organisations

Using a measure of organizational sophistication in diversity management, we found that private organisations were less sophisticated than public sector and voluntary sector firms.  Small firms are also less sophisticated than their medium and large sized counterparts.   So there is plenty of potential for small social enterprises to benefit from improved management of diversity internally and through building and expanding their networks.

The findings from the survey helped to scope the field of diversity management and to set the context for 6 qualitative case studies linking diversity and innovation.  This research showed that there were 3 key themes which emerged from analyzing our interview data: networked diversity, diversity as reconciliation, and diversity and funding.

  1.  Networked Diversity – is an innovative solution for small firms, who generally struggle to leverage diversity management due to their size and skills shortages.  Social enterprises can benefit from professional networks by gaining experience from commercial enterprises in the network and by eliciting corporate support for their social initiatives.  Professional networks provide sources of support and examples of good practice from a range of sectors (commercial and social), allowing cross-fertilisation of ideas and the network can facilitate the development and diffusion of innovative solutions to social challenges in unexpected ways.
  2. Diversity as Reconciliation – Reconciliation is a golden thread that runs through innovation, diversity and social enterprise – reconciliation of the tensions between maintaining the status quo and experimenting with new ideas, reconciliation of diverse individual interests in the context of work and institutional requirements and the reconciliation between social ends and commercial means.  A proactive approach to diversity management can enable the best talent to be identified and recognized from a bigger pool, but it can also bring challenges in managing and accommodating the increasingly diverse demands of this talent.
  3. Diversity and Funding – Finding funding to start or expand an enterprise or to launch or continue a project is a challenge that faces many social enterprises at one time or another.  There are a broad range of funders and funding sources available to entrepreneurs.  Finding, approaching and accessing them is not always straightforward.  Being able to network with a diverse set of stakeholders and to learn from other successfully funded entrepreneurs can be critical to success.

The case studies in our research showed that where diversity was being successfully managed, there was a positive innovation outcome.  For smaller organisations that cannot achieve internal diversity, networking can be an effective way to bring in diverse perspectives and knowledge.  Networks can be used to find examples of good practice, to seek collaborators, to cross-fertilise ideas, to access diverse talent and to access funding sources.

These and related findings were presented at the ‘Operations Management in the Third Sector’ Conference at Leeds University Business School on Wednesday 20th March 2013.

You can find out more about my co-authors at their websites – click through on their names:  Dr Ruth Bridgstock , Professor Mustafa Ӧzbilgin  and Dr Ahu Tatli.