Dear Emerging Ally,
As you travel this journey you will be faced with obstacles. We often think of the obstacles as being individuals but can also be the corporation itself: the corporate culture, the way people think. We all believe it is the right thing to do but resistance comes in many forms. Diversity is change and change gets resistance in any organization. So I thought I would talk about one of the common obstacles I have faced: is it good for business?
The argument goes like this. “We agree with diversity.” … “We want like diversity.” … “But this is a business and our job is to make money.” … “Every investment in the business needs to have a positive return.” It sounds logical but is based on an invalid assumption: only the current system can make money. It turns the argument away from morality and ethics. It is really annoying to be honest. It is an old trope. It assumes the current system of hiring and promoting white guys makes money while treating minorities and women does not make money, even equating diversity with charity. It is a default condition that is wrong on several levels.
First, diverse companies make more revenue and have higher profits than non-diverse companies. There are countless studies that prove this:
“Companies that have more diverse management teams have 19% higher revenue due to innovation” - Boston Consulting Group ( https://www.bcg.com/en-us/publications/2018/how-diverse-leadership-teams-boost-innovation.aspx)
“Companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians … when companies commit themselves to diverse leadership, they are more successful” - McKinsey (https://www.mckinsey.com/business-functions/organization/our-insights/why-diversity-matters#)
“companies with the most ethnically/ culturally diverse boards worldwide are 43% more likely to experience higher profits” - McKinsey
“highly inclusive organizations generate 2.3x more cash flow per employee, 1.4x more revenue, and are 120% more capable of meeting financial targets.” - Gartner
Second, Diverse companies are more innovative, and innovation is the driver of profit:
“Diverse teams can develop more innovative ideas. When people from different contexts work together, their unique perspectives often lead to greater creativity” - Harvard Business Review (https://hbr.org/2019/02/research-when-gender-diversity-makes-firms-more-productive)
It is no surprise that diverse companies are more more innovative and thus more profitable and have higher revenue growth. In my experience when the room is not diverse it sends a signal. Conformity is prized. Hence you don’t want to be different. You are less likely to throw out the crazy idea. I know. That was me. I was the different one in a room of white guys. Different religion and I was made very aware of that early in my career. Hence I was not going to rock the boat. I can’t be alone in that feeling. Self censoring so you don’t stand out.
The crazy idea is the one that makes billions. But they are the ones that never make the light of day for fear of not-conforming….. I should note I never had the billion dollar idea. …. my art collection would not be mostly crayon if I had … LOL! :)
But a room that is demographically diverse promotes the concept of acceptance. It gives the signal that the environment is willing to listen to other perspectives. Diversity indicates that conformity can be challenged. And that is the heartbeat of innovation. I know as I mentioned I hid my religion for years and censored my ideas. I wanted to fit in. Not be different.
Finally, Diversity and Inclusion is a driver of employee engagement - a key link to company performance:
“There is a statistically significant relationship between diversity practices and employee engagement at work, for all employees” - Delloitte (https://www2.deloitte.com/au/en/pages/human-capital/articles/role-diversity-practices-inclusion-trust-employee-engagement.html)
So Diversity and Inclusion not only drives positive results on the bottom line, but it also results in increased innovation and higher employee engagement. And we also know it is morally and ethically right.
So are we finally done with this trope? Probably not. But hopefully this gives you an answer to this tiresome line of questioning.
I hope this helps. I look forward to continuing the conversation. Please let me know your thoughts in the comments.
Thank you, Dave
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