Why A Brexit Would Hurt Innovation

I came across an interesting study by the Sutton Trust from a few months ago reporting that the old school tie network is still taking the top leadership jobs in UK publishing, the police, politics, the Forces and the legal professions but that the number of non-public school educated CEOs in the UK has risen from 30% in the 1980s to 66% today. So why is diversity so much more apparent in mainstream business leadership than in these other industries?

Speaking from experience public school is not about diversity. And the more you pay, the less diverse it gets. These schools produce a certain type of leader. People who are schooled in the same way, who socialise with the same types of people, who have grown up in the same areas and who will produce ideas based on the limits of that experience. To paraphrase the old saying – when you employ what you have always employed, you will get what you’ve always got. But when your organisational culture is driven by a compelling need to innovate, then you really need diversity. Politics, law, the forces, the police, civil service and publishing have had no urgent need to innovate until they are told they have to. But business has always had to think differently. Great business leaders aren’t employed to be scared of difference, they know difference is the catalyst for innovation and that’s what drives a business forward. So choosing a CEO from outside of the traditional system clearly gives you a competitive advantage, as 66% of businesses would agree. This isn’t just about CEOs of course, a recent study from McKinsey shows that gender-diverse companies are 15% more likely to outperform their rivals while ethnically-diverse companies are 35% more likely. Diversity isn’t just a nice to have, it’s an essential competitive advantage.

I’m not saying that it’s all roses in business, business culture is broken in many ways and there is a long way to go as far as diversity and inclusion is concerned. But as far as driving innovation, business gets the importance of diversity (well, at least some do). And it is this issue of diversity dressed up as difference which is at the heart of the EU referendum. The push for a Brexit is all about fear of difference. Where little Englanders feel fear, business sees opportunity. If we leave the EU we will make it harder for the diverse pool of European and global talent to come to the UK, talent that makes a significant contribution to driving difference and innovation. Simultaneously we make it harder for our talent to experience difference abroad, a process that brings home knowledge and innovation. And you can couple that with the fact the best UK talent will leave or be poached because if you’re creative and talented you don’t want to work in an economy that stifles innovation or be part of some bland old school tie network.

All this Brexit carping about making Britain great again misses the point – what makes this country great is its diversity, that’s why people want to live and work here and that’s why we have an innovative business and start-up culture. Shut the door on diversity and you stifle innovation and creativity. Leave it open and let them thrive.

Roland consults and writes about business culture, leadership and innovation.

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Image: By Eric Fischer


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