Recent research indicates that the more diverse a company, the bigger its profits. Global management consulting firm McKinsey & Company reported in January of this year that gender-diverse companies in the top quartile for diversity are 15% more likely to outperform those in the bottom quartile, and the top ethnically-diverse companies are 35% more likely to outperform those in the bottom quartile for ethnic diversity. Furthermore, they report that in the US, for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8%. Better results among companies with a diverse workforce can be attributed to increased innovation, access to broader client base and emerging markets, and higher retention rates. “Diversity is more than just numbers”, says leadership expert and Winning With Transglobal Leadership author Dr. Linda Sharkey, “diversity allows for a greater share of ideas”.
In 2013, the Harvard Business Review pointed to ways leaders can foster innovation, stating that employees are 3.5 times more likely to contribute their full innovative potential in a “speak-up” culture. When addressing how to best unleash the potential of a diverse range of talent, they mentioned the six key behaviors to unlocking innovation across the board which include: “ensuring that everyone is heard; making it safe to propose novel ideas; giving team members decision-making authority; sharing credit for success; giving actionable feedback; and implementing feedback from the team” wrote authors Sylvia Ann Hewlett, Melinda Marshall, and Laura Sherbin. Having a more diverse team will also create a more supportive culture internally. The workplace will be a safer space for the open exchange of ideas, and leaders who give diverse voices equal airtime are nearly twice as likely as others to “unleash value-driving insights.”
Further research revealed that a more ethnically diverse team will open transglobal doors, and broaden client base as well. The Harvard Business Review study reported “a team with a member who shares a client’s ethnicity is 152% likelier than another team to understand that client”, and noted that employees with acquired diversity (that is, traits gained from life experience), can better relate with a variety of clientele. For instance, working in another country gives you insights and appreciation of other cultures, and selling to women consumers can give you “gender smarts”.
Companies that don’t embrace diversity “can’t as quickly engage and retain and promote global diverse talent, and all those things get in the way of your ability to be nimble, your ability to be agile,” Dr. Linda Sharkey said. “Some people care about it, some don’t. The smart companies care about it.”
In fact, smart companies such as Google, Facebook and Apple are catching on, as they have launched programs over the past few months to bring more diversity to the workplace. Facebook, which has over 69% males on staff, and over 90% of the workforce being white or Asian, is launching a new program in a handful of divisions. According to CNET, they are requiring the applicant pool for a open positions to include at least one minority before someone can be hired. If the efforts work, the hiring process will expand to all areas of the company.
Sharkey says that of the companies she researched, the most inclusive ones made the biggest gains in the market. “The ones we found that really valued talent created an inclusive culture … did better from a business outcome standpoint,” she said. Or to quote Apple CEO Tim Cook: “I think the most diverse group will produce the best product, I firmly believe that.”
Amber M. is the Marketing Manager at BigSpeak Speakers Bureau. For more information about how BigSpeak business experts and keynote speakers can benefit your organization, contact us at 805-965-1400 or info(at)BigSpeak.com.