Episode 97:
Making the Case Part I: Why Diversity is Good For Business
What You Will Learn:
- Why it is important to examine why Diversity is good for business, just as we examine the benefits of all the other business decisions we make
- Why the first component of why diversity is good for business is the moral implications of increased Diversity
- How studies have shown that the top 25% racially and ethnically diverse companies are 36% more likely to outperform less diverse companies in financial performance
- Why greater gender Diversity gives companies a 25% increased likelihood of outperforming the average and increase the value of these organizations
- How Diversity can help fuel innovation, new and fresh ideas, and more perspectives in decision-making
- Why tokenism isn’t enough, and why diverse team members and business leaders need to be brought in as full members of the team
- Why our workforce is increasingly diverse and why organizations that value Diversity have greater access to talented team members
- How immigration is helping push back against the declining numbers in the workforce and helping fill the increased demand for workers
- Why Diversity is crucial as BIPOC people are becoming an ever-growing segment of our society
Making the Case Part I: Why Diversity is Good For Business
We all know that most business decisions are made on the basis of the impact they have on the bottom line. Luckily, Diversity, Equity and Inclusion work does have a positive impact on the success of our organizations. The challenge is making the case for why we need to do this work in a way that illustrates this impact.
In this first episode in a special three-part What’s The Difference podcast series, I want to talk to you first about why Diversity is good for business and what effect increased Diversity can have on your organization’s success.
Why Diversity is Good For Business
At deepSEE Consulting, we’ve designed a template to help you make the case for DEI work in your organization, which you can find on our website at www.deepseeconsulting.com. This template serves as the basis of our three-part series, so I urge you to check it out.
First, let’s talk about why Diversity is good for business. Just as we carefully consider the pros and cons before we make other key business decisions, we should consider these same factors when making the case for DEI work in our organizations. Of course, there’s the moral imperative, but there are also tangible benefits of increased Diversity. McKinsey & Company periodically releases a report on the business impact of greater Diversity. First, they rank organizations based on their racial diversity and then they examine these companies’ financial performance.
According to their findings, organizations in the top 25 percentile of racially and ethnically diverse organizations were 36% more likely to outperform the median. Additionally, companies in the top ¼ of companies with Diversity in their leadership roles had a 20% higher probability of above-average performance. Greater gender Diversity also offers a 25% greater likelihood of outperforming the financial returns of less diverse organizations.
It Takes Real Commitment
Allow me to be clear, just hiring a female or BIPOC employee isn’t enough to enjoy these benefits. Your organization must be truly committed to greater Diversity, and diverse team members need to be truly welcomed at the table. For example, gender Diversity doesn’t have a major impact on performance until Diversity reaches a critical mass and at least 22% of the executive leadership team are women. It takes work and honest dedication. But the benefits go beyond just the financial boost.
Princeton researcher Scott Page wrote an article in which he shared these findings: greater Diversity in an organization’s leadership team enhances problem-solving because “organizations can improve their performance by tapping the power of differences in how people think. Likewise, Harvard Business Review found that homogeneity in business actually stifles innovation, and a Forbes study found that Diversity is a crucial driver of innovation in the workplace.
Diversity is important, not just because it’s “the right thing to do,” but because it helps our teams operate more effectively, it sparks innovation, and these are proven to have tangible financial benefits. If you’d like to learn more about the template we’ve created containing hard data highlighting these benefits, please visit us at www.deepseeconsulting.com. And please join me for next week’s episode of What’s The Difference, when we take a close look at the benefits of Inclusion.
About Sara Taylor
Sara Taylor earned a master’s degree in Diversity and Organizational Development from the University of Minnesota. She served as a leadership and diversity specialist at the University of Minnesota for five years and as director of diversity and inclusion for Ramsey County, Minnesota for three years.
Sara is the founder and president of deepSEE Consulting and has worked with companies as large as Coca-Cola, General Mills, 3M Company, AARP, and numerous others. She has a new book, “Filter Shift: How Effective People See the World,” that explores how our unconscious is actually making choices and decisions for us, all without our knowing — and how to change that.
How to Connect with Sara Taylor:
- Website: www.deepseeconsulting.com
- Twitter: @deepseesara