Does your organization emphasize diversity? Do you know how much you could be missing if it doesn’t?
Today, most organizations operate on a multicultural, if not global, scale. Research has consistently shown that diversity on every level contributes to greater innovation. This often translates to a more skilled workforce, greater productivity, more adaptability, and perhaps most importantly, greater financial returns. Good leaders understand the importance of diversity. Great leaders understand why it is important and how to foster an inclusive environment from the bottom up. With that in mind, let’s tackle why diversity matters and what it can do for success.
Diversity is More Than Just a Metric
While it’s easy – if shortsighted, to think of diversity as simply a quota to meet, like another box to check on a long list, this couldn’t be further from the truth. Once you understand its importance, it’s impossible to view diversity as simply another metric. It is an opportunity for growth and big returns. When it comes to business, diversity is about changing perspectives and growth. As Dr Richard Boyatzis, H.R. Horvitz Chair of Family Business, Professor in the Departments of Organizational Behavior, Psychology, and Cognitive Science, Weatherhead School of Management, Case Western Reserve University, states –
“If you want diversity of thought, you have to bring in people around you who have diverse experiences. Differences in race, gender, and socioeconomic background are three characteristics, but so are differences in learning style or differences in a professional field. And I’m not suggesting that any one of those points of diversity is more potent than others.”
When we think of diversity, we often consider gender and race as the two biggest contenders. This is true, but they aren’t the only factors to consider. Diversity also includes:
- Age
- Disability Status
- Sexuality and Gender Identity
- Education
- Religion
- Socioeconomic background
In summary, diversity gives more perspective, which is something every organization can benefit from increasing. While you can break it down to demographics (and ultimately, you should), it comes to something greater than that. It’s about how people relate to the world. Break from Your Biases and Strengthen Your Organization. There’s more to diversity than just putting diverse talent together. The research is clear on that. Diversity doesn’t work without inclusion. That can be a trickier endeavor, as inclusiveness is a measure of respect. Employees who feel valued and feel as if they “belong” in an organization are more likely to feel empowered. Empowered employees are more productive, happier, and more creative.
Why does inclusion matter? In the shortest terms, it comes down to bias. Humans are filled with inherent biases. We all have them, often to our own detriment. Some of it comes from our cultural background, our upbringing, or even our geographic location. Our background informs how we see the world and, to a larger degree, how it sees us. Organizations with increased diversity challenge bias to the benefit of their employees and productivity. People with different backgrounds tend to have different experiences and, thus, different perspectives. Exposure to different perspectives and views leads to higher creativity. This leads to a higher innovation rate.
Diversity workplaces help organizations avoid the inherent danger of groupthink. Homogenous groups may work well together because they share so many aspects, but they are also prone to make the same kind of mistakes repeatedly. Without inclusion, those minority voices may not be heard or, even worse, ignored outright. Multiple studies reach the same conclusion, inclusive companies are 1.7 times more likely to lead innovation in their field.
Teams managed by inclusive leaders show higher performance, collaboration, and decision-making quality compared to others. A good leader uses diversity to their advantage, recognizing the merit of individual differences and where they can be best utilized toward a common goal. When organizations emphasize diversity on their teams, it highlights a willingness to learn and grow, which can transfer from the team to the larger business in surprising ways.
Discover What Your Market Wants
A diversifying perspective has a broader purpose than simply making a quota. It affects how an organization appears in the market. Your workforce should reflect the community – where they are located, what they offer, and – most importantly – who they serve.
Movements like #MeToo and Black Lives Matter highlight the disparity between the general population and those in power. Any company would be wise to consider these movements and their goals – representation and reformative justice. If your organization does not reflect large portions of the population, how can they trust you to represent their interests? You need to ask yourself – does your organization reflect the communities you serve? According to current research, diverse organizations perform better at marketing and selling than homogenous ones.
When any organization actively works toward cultural diversity, it’s better situated to know the market trends and understand what they want. Cosmetic giant L’Oreal attributes much of its success to the early adoption of a multicultural perspective. By diversifying their branding and focusing on the unique needs of their customers, they were able to remain competitive in the market. Ultimately, customers have power over a brand. If you want to reach multiple demographics, then your best option is to represent those demographics – from top to bottom.
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What It Means for Your Bottom Line
Diverse workforces achieve greater profits. Global managing consulting firm McKinsey & Company research concluded that gender-diverse companies outperform their peers at around 15% while ethnically diverse companies have an even higher rate at 35%! What’s more, companies with diverse leadership teams led in financial performance. A Boston Consulting Group study found that companies with more diverse management teams have 19% higher revenues. The study ties their success to increased innovation due to their increased diversity. In a 2018 study from Harvard Business Review,
venture capitalist professionals found the same results: “Thriving in a highly uncertain competitive environment requires creative thinking in those areas, and the diverse collaborators were better equipped to deliver it.”
In short, diverse companies make more money. It’s as simple as that.
Success Starts at the Top
On every level, inclusive diversity is the key to success in our multicultural, increasingly digital world. Embracing the uniqueness that others bring to the table can only lead to greater innovation, better productivity, and a healthy sense of competition in the workplace. Diversity in an organization is no longer optional; it is imperative for growth. Organizations that embrace change quickly have more time to integrate it on every level. However, it must be more than a limited campaign. Diversity is a constant, progressive action that must be maintained. Leaders who nurture diversity reap the benefits in both the short and long term. As the world becomes more multicultural and complex, it is up to great leaders to bring that spirit into the workplace.
