Just as the free exchange of ideas sharpens university students’ ability to test and grapple with differing opinions, so too in a business setting, viewpoint diversity can give an enterprise a distinct competitive advantage. That point was driven home in a new paper published by OneAscent Capital, a firm that proactively develops a program of values-aligned private market investment options.
“In the field of business, it is within the very nature of capitalism and competitive markets that new ideas lead to innovation and change,” writes John Siverling, Director of Private Markets and Impact Advocacy for OneAscent, and President of OneAscent Capital. “Diversity in thoughts and ideas leads to understanding new customers and unmet need.”
Siverling, an Advisory Council member for the Viewpoint Diversity Score, is right. And multiple studies—along with the Viewpoint Diversity Score Business Index—back him up.
When corporate directors maintain homogenous points of view on various issues, they’re going to experience blind spots that impair their ability to make wise managerial decisions and establish plans. Ideologically homogenous C-suites are also not well prepared to foresee how use of company resources to weigh in on political issues could risk alienating certain constituencies or unknowingly devalue employees. Lack of viewpoint diversity impacts a great number of business decisions, including “portfolio composition, stock market participation, analysts’ forecasting behavior, corporate social responsibility, and corporate policy decisions.”
Bottom line? Diversity of opinion can protect a company from brand, reputational, and other forms of risk.
Consider what happened with Amazon. The online seller banned the sale of books written by authors with conservative viewpoints, including intellectual Ryan T. Anderson. Amazon’s ambiguously stated content guidelines give the company free reign to remove any content it deems to be “hate speech” or “material [they] deem inappropriate or offensive.”
A major company risks its reputation when it caters to the demands of vocal and polarizing political activists. That’s clear enough, but as Siverling points out, it also damages innovation. He points to an example within the automotive industry to illustrate this:
More broadly within business and capital markets, there are many illustrations of how the lack of diversity has caused businesses to miss opportunities and lose their leadership positions in markets. As one example, in the early 1990s domestic automakers missed the signs that foreign luxury cars could displace their strong position of leadership in the U.S. They were narrowly focused on each other as their competition, which was the status quo. My own experiences in the automotive industry showed me that their organizational bureaucracies stifled dissenting voices from within. This led them to miss key signs of changes in customer needs and interests, as well as the potential risk of the new entrants. In the mid-’90s, Cadillac and Lincoln controlled approximately half of the U.S. luxury market, with some European brands and upstart Asian brands having small market shares.4 Today, the top selling luxury car brands are BMW, Lexus, Mercedes Benz and Audi. In 2020, Cadillac sold around 130,000 vehicles and Lincoln sold around 105,000. By comparison, BMW sold about 280,000 with Lexus and Mercedes selling around 275,000 each. It may not have changed the results, but what if domestic automakers had broadened their thinking to hear from those that didn’t buy their cars? What if they sought out divergent viewpoints and studied innovations that may not have fit their existing paradigms?
As many companies today focus precious time and resources on scoring political points or enforcing ideological conformity, they’re cutting themselves off from delivering what customers want: quality products and services that meet our demands. Customers don’t go to Amazon to purchase products because Amazon has backed certain bills or because they’ve removed certain books—they buy and sell through Amazon because it’s convenient and easy. Amazon has met customer demands. But when Amazon does weigh in on political issues or backs certain bills that some customers don’t support, customers are less likely to use Amazon—even though they believe its services to be convenient.
“Allowing diversity in thought can be messy,” Siverling writes. “It can be slower than a command-and-control system. But the best way to innovate is to allow for (no, proactively seek out) diversity in ideas to compete in a free market. Some ideas that are developed aren’t successful. It is the marketplace that determines which ideas win and which ideas lose. Businesses and their leaders risk alienating customers and harming their brand and their value by engaging in ways that can be polarizing. The willingness to allow diversity of thoughts and the freedom of speech, no matter our own beliefs and faith, must remain a paramount feature of how we approach science and business. Providing protections within business practices and systems for the diversity of viewpoints can help prevent mission drift on this important issue.”