May 09, 2019

Why diversity is a business imperative

With the exception of a handful of particularly loud chuckleheads on talk radio, most Americans recognize the benefits of improving diversity in the workplace. We get that different people from different upbringings can sometimes have disparate viewpoints. Of course, no group has a monopoly on the best ideas or the most vibrant culture or, really, the “best” or “most” anything.

Somehow, cultural diversity in the workplace hasn’t quite caught on in the boardrooms of the most powerful companies in America. Gender diversity, to use just one example, is pretty woeful for the largest 1500 companies in the US. Women make up 5% of CEOs and 16% of director positions even while holding nearly half (47%) of all business degrees. 7% of these boards have at least three women on them while, staggeringly, 100% have at least three men.

Now, it’s worth pointing out that boardrooms have actually gotten more diverse in the past ten years. Depending on your viewpoint, this is either pleasantly reassuring or grimly problematic. But let’s set that aside and operate under the premise that boardrooms – a.k.a. key decision-makers – tend to be fairly uniformly white and male. It’s pretty apparent in the data. Inclusion in the workplace just isn’t where it should be. 

But there’s another thing that’s apparent in the data of companies with more diverse boards and greater employee diversity: they’re more successful. Full stop.

The business case for equality and diversity

According to Catalyst, “companies with the highest representation of women on their top management teams experienced better financial performance than companies with the lowest women’s representation.” It’s not small either. For example, Return on Equity (ROE) for more diverse boards and inclusion in the workplace is a full 35% higher.

And that’s just looking at the boardroom. Josh Bersin did a great round-up of some relevant research in the area, and basically every metric illustrates that companies with greater diversity in the workplace simply do better than less diverse ones. He highlighted that gender-diverse companies are 15% more likely to outperform their peers. Ethnically-diverse ones are 35% more likely to do so. Organizations with greater employee diversity have better cash flow and enjoy more innovative workforces. Moreover, they are more likely to identify and build leaders internally, and, well, you get the idea.

Inclusivity then goes one step further. It takes all the various traits that come from having employee diversity and brings them together by giving those individuals a sense of belonging. Inclusion is what makes diversity in the workplace possible. Essentially, it involves the norms and behaviors that make every unique individual feel welcome and valued. An inclusive culture is proof that improving diversity in the workplace isn’t just a tick in the box. 

An example of diversity and inclusion in the workplace

There are a myriad of reasons why an inclusive work environment correlates so strongly with corporate health, both from a bottom-line and cultural aspect. Chief among these is that oftentimes, with diversity, equity, and inclusion (DEI) in the workplace,  companies enjoy a diversity of thought. This can be tricky at first, where there can be minor cultural clashes (say, one employee is from a culture where questioning authority is taboo and another is not), but experts say this irons itself out rather quickly. The flipside of these minor disconnects is, as we mentioned, the diversity of thought. Here’s a simple example of workplace diversity and inclusion in action:

A while back, I had the good fortune to attend a talk on artificial intelligence & diversity in the workplace. The whole discussion was enlightening, but there was a clip that really stuck out. The presenters were talking about voice-activated home assistants–products like Google Home or Amazon Echo–and how the underlying AI was trained. 

Mostly, the voices these algorithms learned from were the same as those of the engineers who made the program. Essentially, these were Silicon Valley types, engineers mostly, with a smattering of students from Stanford and Berkeley and the surrounding schools in the Bay Area. Because of that, when testing these products in-house, it’s easy to assume they work well. It can understand everyone in the office. But the office didn’t have sufficient diversity in the workplace – specifically in this case, diversity of speech. So what happened when these home assistants were released? Well, if you have a Memphis accent or a thick brogue or were a Chinese national, they simply couldn’t understand you. And if that product can’t understand you, it’s worthless.

Diversity, equity, and inclusion for your customer 

Think of how much easier language sensitivity is when you have diversity in the workplace. Now extrapolate that to whatever product you’re making. If you don’t have DEI in the workplace, are your teams covering your whole user base? Have they thought of all the possible questions? Have they built with empathy? Diverse voices in an inclusive work environment help solve this.  In fact, without them, solving issues like these can be incredibly complex.

And this is just one example among thousands of how DEI in the workplace impacts your business. But it’s a good one to demonstrate just one of the ways improving diversity, equity, and inclusion in the workplace is valuable in a business context. It’s anecdotal, sure, but the data we shared above isn’t. Companies that drive cultural diversity in the workplace just perform better. They come up with more, disparate ideas, and they solve problems more holistically and effectively. If everyone in your company looks the same, chances are, you’re only building for people like you. And that’s the surest way to stagnate.

Inclusive leadership

Let’s also not forget the power of inclusive leadership. It isn’t just that everyone is treated equally but that they’re also made to feel that they belong. Through inclusive leadership, you engender a culture where everyone feels valued. On top of that, they have the right support to reach their full potential. 

Inclusive leadership doesn’t just drive diversity in the workplace. It also encourages acceptance of one’s biases such that everyone feels psychologically safe to express themselves. Moreover, inclusive leaders encourage growth by enabling curiosity for different ideas and the courage to make mistakes. They’ll take your business far beyond your goals as you create a culture that can adapt to diverse markets and customers. 

Such leadership takes self-awareness and an appreciation of biases. Most importantly, it takes humility and empathy. That’s why at Lingo Live we prioritize coaching emotional intelligence and transformational coaching. We work with your leaders to build on their self-awareness and social skills to develop their overall cultural intelligence. It takes courage, curiosity, and humility. Our coaches are there alongside them as transformational guides. They’ll drive your leaders to new perspectives and new frontiers for your business. 

Read more: If you enjoyed this, check out our white paper on Inclusive Leadership or read the blog post on diversity hiring.

 

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Diversity & Inclusion

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