How Making Diversity A Strategic Priority Can Be A Game-Changer For Businesses

Is the current state of diversity in your workplace ‘could be better but not a priority right now?’ Perhaps your HR team has acknowledged the need for change but it’s a stale subject and nothing is moving forward.

It’s widely accepted that greater diversity and inclusion has a positive impact on organisational goals, but not enough companies have yet changed their outlook from “should do” to “must do.” In this article, I will present the business case to prove that when you value diversity, you become better at winning business.

“At the current pace of progress, we are more than 100 years away from gender equality in the C-suite" - Sheryl Sandberg said in the Wall Street Journal

Diverse companies get better financial results and there is an endless stream of research to prove it. The bottom line is that your business will be more profitable if you have a diverse workforce. You’ll find evidence of this in separate 2007 research reports published by consultants Catalyst and McKinsey, plus many further studies since. 

These studies compared the financial performance of organisations according to the gender diversity at senior levels - and both found that greater diversity had a notable impact on businesses profitability. The McKinsey report says companies in the top quartile of gender and ethnic diversity are more likely to out preform financially by 15% and 35% respectively.
 
More recently, the American Sociological Review published research by Professor Cedric Herring called: 'Does Diversity Pay? Race, Gender, and the Business Case for Diversity' in which he proved the following…

Racial diversity is associated with:

• Increased sales revenue
• More customers
• Greater market share
• Greater relative profits

Gender diversity is associated with:

• Increased sales revenue
• More customers
• Greater relative profits

The only hypothesis he didn’t prove is that gender diversity is associated with greater market share.

Putting the figures and statistics aside for a moment, consider this. The employer brand has close ties with the consumer brand, and if organisations wish to promote understanding and loyalty with all their stakeholders (a very diverse bunch indeed) then it’s vital that they can reflect the customer base they serve.
 
With all this evidence and research to support the business case for diversity and inclusion, it should easily convince leaders and HR to make diversity a reality. The problem is not in getting the need acknowledged, it’s achieving the shift in mind-set and behaviours that bring about real change.

The paper The Business Case for Equality and Diversity, commissioned by the government in the UK, suggests that there is no single approach businesses can adopt to achieve diversity. To be effective, it needs to be embedded in the company strategy instead of treated as an ad-hoc addition.

Biases are naturally developed and sometimes they can help us make good decisions, but when it comes to diversity they often get in the way. It’s important that your decision makers can identify the moments when they are potentially being influenced by biases, or your company will forever be faced with a lack of diversity. But how?
  
Taking an organisational development approach to eliminating bias and promoting diversity will enable you to shift the focus from the individual to the entire process. You can create structures within your organisational culture and group decision-making processes to identity and overcome them.