We all know that diversity and inclusiveness sound like the right thing to do, but research continues to prove that these ideas are also turning out to positively influence financial returns for the companies that embrace them. Companies that champion diversity consistently outperform more homogenous companies which are less likely to achieve better than average revenue, according to a recent study by McKinsey & Company. The value comes in pooling collective experience across individual backgrounds and beefing up other resources like knowledge, specialized strengths, company culture, and brand perception. If your organization prioritizes inclusive teams in its workforce, you can expect your productivity will come out ahead of your less inclined competition.
Here’s where you’ll see it.
Better Decision Making
Specifically, the ability to hold diverse discussions can help you uncover more details and lead you to make better more informed decisions. In business, we often try to put ourselves in the customer’s shoes, and although we try to see scenarios their way, we rarely grasp the full picture. We usually fill in the gaps with images of ourselves in the customer’s shoes. By bringing in external viewpoints, businesses can find new ways of looking at a problem and can overcome their tunnel vision. In some cases, a problem may be completely reframed and celebrated as an opportunity.
Diverse viewpoints coming from people of different ages, ethnicities, genders, and backgrounds not only provides a large amount of collective insight, but the entire problem-solving process often improves. Individuals on diverse teams begin to question their own correctness in their vantage points. The group comes to a solution by way of vast perspective rather than naive confidence. And they get it right. When you can come up with a solution that works the first time, you minimize wasted time and money. Accuracy in decision making counts hugely toward the bottom line.
More Innovation
Going beyond the process of making an informed decision, in terms of a company’s vitality, innovation plays a critical part. And often innovation doesn’t happen for its own sake, but as a means to overcome challenges like changing marketplace conditions. The biggest predictor of success in solving complex problems is collective intelligence, not the average intelligence of group members. Brainstorming with others brings alternative perspectives together and, more often than not, leads to the optimal solution.
Moreover, small and diverse groups, even remote groups that meet virtually, are observed to produce more innovative results than larger diverse groups. A recent University of Chicago study found that smaller groups are inclined to come up with ideas that disrupt traditional systems and processes. That’s because smaller teams logistically encounter more opportunities for dialogue and tend to cultivate high levels of trust, which creates a perfect environment for big hairy, audacious ideas to show up. The fact is, we can accomplish more when we work across divisions, so we need to make the effort to do it. It’s easy to gravitate toward others that share our viewpoints and it’s soothing on the ego, but doing that keeps us from reaching superior outcomes.
Noticing Problems More Quickly
Even the most effective companies encounter problems. One of the most effective ways to minimize the impact of a problem comes in how quickly it can be spotted. The sooner a problem can be detected, the sooner it can be contained, and solutions begin to form. If the problem goes unrecognized for extensive periods, it can have devastating effects on a company even to the point of extinction.
When you have multiple people focused on a goal but looking at it from different angles, potential threats and problems get noticed much faster. A team member with a specific vantage point will see it faster than the rest and will alert others to action.
How effective do you think a baseball team would be if every team member played first base? In baseball, every player has a job, a main focus, and they play that role to the best of their ability while knowing deeply their connection to the other members (positions) on the team. When a batter hits the ball, the teams react as efficiently, and effectively as possible, utilizing the right positions at the right time. Teams that can orchestrate the best cohesive response usually ends up winning the game.
It can be freeing to know that others on the team are watching out for problems in positions all across the horizon. Employees can pursue with vigor their designated role and in a way rely on the innate perspectives of their team members to provide valuable oversight.
Winning and Keeping Top Talent
Research in numerous studies points to workforce diversity as important criteria that attract high performing talent. Employees prefer diverse work environments. A GlassDoor survey found that 67% of respondent job seekers look at workforce diversity when evaluating an offer. It’s particularly important to women and minority job seekers who use the current state of representation to evaluate potential (and realistic) growth opportunities. Additionally, the perception that firms are diverse is enough to produce workplace satisfaction among employees, which contributes to higher performance across all roles.
Improving Customer/Brand Perception
“Many American corporations are now pushing to set and meet diversity and inclusion standards. Kristin Moore is the Austin Regional Manager for Women’s Business Council- Southwest, the Regional Partner Organization in Austin, Texas, for the Women’s Business Enterprise National Council (WBENC). Her organization certifies women-owned businesses and works to connect them with corporations for supply opportunities.”
Moore says, “It’s become a priority for most corporations to have diversity both internally and externally with their suppliers. They’re seeing the reciprocal positive impact that can be made by spreading opportunity around.”
As more diversely owned companies take a seat at the table, consumers are taking notice. Brands that are recognized for working to advance fair and inclusive business practices have a good chance of capturing the millennial dollar.
Moore says, “Diversely owned firms are also doing their part to shore up more opportunity and normative change. When I visit our women-owned businesses applying for certification, I’m able to meet their employees and see how they’re in a sense paying it forward.”
Moore explains that many minority and women business owners have gone through difficult situations, sometimes losing bids on homogeny alone.
She says, “It gives them a better thought process when they build their internal team. In their own companies, I’ve met people of color, women, and people of different cultures and backgrounds in leadership positions. This in itself helps to bring about the new way of doing business in which brands are expected to effectively represent their consumers, both in their hiring and their supply chain.”
Conclusion
If only in terms of the bottom line, more companies are seeing that diversity and inclusion plays a role. If your organization is committed to embracing this way of doing business, you’re well positioned to face a future marketplace. That’s a win for you and a win for the world.