As companies innovate with growing speed for an increasingly diverse customer base, the business case for diversity and inclusion in technology has never been clearer. CIOs can fuel more effective and ethical innovation by embedding diversity and inclusion within technology teams.
Many chief information officers (CIOs) recognize that tech teams with diverse backgrounds and mindsets can support innovation and drive transformational growth by openly sharing perspectives, focusing on user-centric design, and consciously exploring potential outcomes to avoid unintended harmful results. In this report, the fourth in Deloitte’s Diversity and Inclusion in Tech series, we share how CIOs can intentionally build environments that support responsible technological innovation.
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This article is featured in Deloitte Review, issue 26
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A lifesaving innovation in automobile manufacturing—airbags—entered the mainstream in the early 1990s. By October 2001, the National Highway Traffic Safety Administration estimated that airbags saved more than 7,500 lives. But these early airbags also killed 195 people during this period—mostly children and women under 5'2".1 Shorter drivers and children sit lower in the front seat, so they are more likely to absorb the full force of a deploying airbag. Until 2011, the federal government did not require crash testing with female dummies—only large male dummies.2 If women and small passengers had been consulted, or even considered, during the design and testing, it's likely that there would have been significantly fewer airbag-related deaths during these years. Now fast forward to today. While professions such as medicine have a Code of Medical Ethics—“first, do no harm”—technologists tend to lack an overarching, consistently applied code of ethics to guide their innovations, many of which have been developed with a focus on being first-to-market and revenue generation.
Ethan Zuckerman, director of the MIT Center for Civic Media and associate professor of the practice in media arts and sciences at MIT, agrees, “Technology has always been a catalyst for change, but technology has also been capable of harm. It sometimes causes harm even in situations where people are cognizant of its ability to cause harm.”3 Companies can waste vast amounts of time and money creating something that may exclude a customer group or providing a service that customers want but with undesirable side effects that must be fixed after deployment. Perhaps even worse, they may build solutions that undermine customer trust—think of the many problems that have resulted from lax data security and confusing privacy controls.
The good news is that many organizations are starting to recognize that innovation and ethical tech need to be taken into consideration together. The fifth annual MIT Sloan Management Review and Deloitte study of digital businesses found that companies who innovate more are more likely (76 percent) than companies who innovate less (43 percent) to have adopted policies that support their organization’s ethical standards for their digital initiatives. However, in companies who innovate more, a smaller percentage (57 percent) believe their leaders spend enough time thinking about and communicating the impact the organization’s digital initiatives have on society, while only 16 percent of companies who innovate less agree with this statement (figure 1).
While the need for ethical tech design is not new (see the sidebar, “From our vantage point: Ethical tech”), what is new is the accelerating speed at which companies can churn out technology-based innovations, many with unintended societal and business risks. In addition, artificial intelligence (AI) and descriptive analytics and data mining identify patterns can aid breakthroughs, but they can also perpetuate stereotypes and biases that are hidden in the data.
According to Ray Kurzweil, author of The Singularity is Near, our overall rate of progress is doubling every decade: “We won’t experience 100 years of progress in the 21st century—it will be more like 20,000 years of progress.”4 With this exponential growth rate, laws and regulations intended to protect individuals from harm likely cannot keep up. Perhaps the key is to ensure that the needs of all potential customers are considered from the beginning of the design process. But codesigning with customers is easier said than done, especially for large organizations. Instead, Zuckerman encourages CIOs to focus on “ensuring there is a diverse set of voices at the table so that their collective understanding is less naïve and less biased.” He explains that diversity can help design teams detect unexpected problems and develop understanding of others’ sensitivities. “It can be helpful to have people on a team who are trained not just to say, ‘here is a problem I will solve it,’ but also to say, ‘how did that problem come about?’ This is really what it means to think critically about technology.”
Ethical tech refers to discussions, practices, and decision-making behaviors that can help organizations explore, understand, and mitigate the potential consequences of disruptive technologies. These discussions are the natural evolution of tech savviness, whereby nearly every individual operating in business today benefits immensely from increasing their fluency in the language of disruption. By extension, organizations can also reap rewards from their employees’ enhanced ability to recognize and debate the potential effects of applying emerging technologies, as well as to weigh alternatives in the design, implementation, and adoption of these tools.
Ethical tech may often be confused with business ethics—which is covered by compliance, legal, and risk. Ethical tech can be aligned to these entities, but the policies in place often do not provide a method for how to deliberate and address ethical tech dilemmas that take into account the diverse needs and demands of larger user bases (figure 2). Catherine Bannister, US development and performance leader at Deloitte US, says, “It is important to determine whether and where an organization might apply checks and balances in order to pivot or pause a technology initiative if potential problems are identified.”5 Not only can a framework for ethical tech decision-making allow a company to anticipate and avoid potential landmines, but setting clear parameters around how to identify and evaluate tech dilemmas can also enable a company to innovate faster.
Some CIOs, such as Sabina Ewing, chief information officer of Pfizer Upjohn, understand the importance of taking an ethics-first approach to tech design by building diverse teams that reflect the myriad mindsets and backgrounds of the end consumer. She explains that “technology today is ubiquitous, and, in and of itself, it’s nondiscriminatory.” However, she stresses that as “customer demographics expand, CIOs and IT leaders have to be careful to think about the potential outcomes—and that comes by ensuring that the people building and designing technology have varying opinions.”6
Many forward-thinking companies and universities are taking the lead on defining an ethical foundation to guide tech design and innovation.7 Judith Spitz, PhD, founding program director of the Initiative for Women in Technology and Entrepreneurship in New York (WiTNY) at Cornell Tech says, “Diversity is more important than ever. A diverse workforce is your first line of defense against algorithmic bias.”8 Having people with a wide range of experiences and mindsets at the table who are free to question, build, and govern technology design can help avoid unintended biases before deployment, sidestepping possible harm to individuals and the company’s brand and reputation.
Deloitte’s Center for Consumer Insights reports a seismic shift over the last 50 years, from a homogenous US population to one that’s incredibly diverse and heterogenous across all key demographics: race, age, generation, health, ethnicity, economics, and education (figure 3). It’s important for companies to understand these changes to identify pockets of opportunities for innovation.9
Many forward-looking companies are creating teams and roles that reflect their diverse customer base to help organizations innovate to drive transformational growth. Mindy Simon, CIO of Conagra Brands, believes diverse teams create a competitive advantage by fueling disruptive innovation—leading to better products and solutions for customers. She says, “We believe diverse teams create a competitive advantage by fueling disruptive innovation. When our team’s diversity reflects the diversity of our customers, we are able to create products and solutions that consumers will use every day.”10
Diversity is important for enabling both innovation and ethical tech. Nishita Henry, chief innovation officer at Deloitte Consulting, affirms that “diversity catalyzes innovation.” She points out that diversity often uncovers opportunities for innovation, as well as solutions: “Multiple viewpoints from different industries, economic backgrounds, educational experiences, genders, and ethnic backgrounds can provide the perspective on what should be innovated on—and solving those problems requires that same diversity.”11 Leveraging diversity in innovation becomes even more important in this day and age, where we should make sure that emerging tech—such as AI and automation—are applied equally and consistently. She agrees that CIOs should focus on the diversity of their workforce, but also advises CIOs who are looking to partner within the technology and innovation ecosystem to consider a set of diversity criteria and culture that they want to see in their partners.
A 2013 Harvard survey identified two types of diversity: inherent and acquired. Inherent diversity traits are ones you are born with (gender, race, sexual orientation, etc.). Acquired diversity traits are gained through experience (education, places where you’ve lived, socioeconomic background, etc.). The study showed that organizations with leadership teams that have a combination of at least three inherent and three acquired diversity traits out-innovate and out-perform the others; these organizations are 45 percent more likely to report growth in market share and 70 percent more likely to report capturing a new market. Perhaps more surprisingly, when even one member of the leadership team shares the targeted customer’s ethnicity, the entire team is 152 percent more likely to understand the customer.12
Organizations with diverse leadership teams out-innovate and out-perform the others; these organizations are 45 percent more likely to report growth in market share and 70 percent more likely to report capturing a new market. Even when one member of a leadership team shares the targeted customer’s ethnicity, the entire team is 152 percent more likely to understand the customer.
American Express is elevating its commitment to understanding the customer through its diversity and inclusion (D&I) strategy, which includes regular reviews of its goals, metrics, and the diversity within its workforce. Licenia Rojas, senior vice president and unit CIO at American Express, is proud of helping to create a workforce that reflects a diverse customer base and being part of an organization where D&I is part of the company’s DNA.13 Rojas leads a team providing technology support for the organization that is responsible for all of American Express’ external and internal servicing functions, with a focus on driving a best-in-class servicing experience for customers and colleagues.
For American Express, having a diverse team and allowing everyone to share from their perspective is a strategic imperative. She explains, “The diversity of the teams at American Express results in being able to get representation of different customer segments and customer needs across various markets, enabling them to drive innovation and growth.” For example, her team continually considers facts such as that women control 75 percent of discretionary spending worldwide, and that the spending habits and incomes of millennial consumers may not allow them to make buying decisions similar to other generations.14
Rojas shared a recent example of a previous small business owner who joined the team and has been able to bring great perspective from being on the other side of the table. This has benefited the entire team as they think about their digital transformation initiatives that impact their small-business-owner customer segment. She says, “These diverse perspectives also are helping us consider new ways to use disruptive and emerging technologies—machine learning, blockchain, robotics/automation—to create the best experiences for our customers. When you have individuals from diverse backgrounds, they will drive innovation and transformation—it’s a fact.”
Many design dilemmas began with a homogeneous group of people designing products, processes, or services without thinking through how other types of people might be affected by or prefer to use the technology. Now, IT leaders of leading companies are proactively changing that dynamic by seeking individuals who represent the full range of stakeholders—customers, employees, and other end users—to foster innovation and help ensure their voices are heard from the beginning of the design and decision-making process.
Our conversations with CIOs and other leaders, who are committed to embedding diversity and inclusion within technology teams, led us to several suggestions for other CIOs and IT leaders on how to leverage diverse teams to foster innovation and ethical tech.
“We must shine a mirror on ourselves and raise awareness that our experience is personal, not universal.”
—Catherine Bannister, US development & performance leader, Deloitte
While “tech ethics” and “ethical tech” have recently entered the business lexicon, there’s nothing new about the need for considering potential unintended consequences to others when designing innovative products, processes, and solutions. But as technology becomes omnipresent and pervasive in our lives, it is the CIO’s responsibility to create technology that delivers innovative benefits without unintended harmful outcomes.
Many leading CIOs are adopting responsible tech approaches and building diverse and inclusive teams that reflect the mindsets and backgrounds of the end customer while bringing a variety of experiences and worldviews to the table. With new technologies rapidly emerging on the horizon, this is only the beginning of the evolving conversation about how organizations can generate transformative growth through emerging technology while avoiding consequences that exclude or harm others.
But the responsibility for technological innovation that ensures human- and customer-centric design doesn’t start and stop with the CIO. They can lead their teams by facilitating conversations that go far beyond avoiding damage to others—they can help build a more inclusive world.