Why diversity is the best kept secret to business success
While declaring victory for diversity and inclusion (D&I) in 2020 would be premature, the steps taken over the past year have built a brighter outlook for the future. The Black Lives Matter (BLM) movement spread tremendous awareness, altering consumer behaviour, increasing the demand for companies to forge inclusive communities, and persuading businesses to make pledges of change.
Consumers are serious with their ethical conscience, and will actively select brands that align to their core values and beliefs. In fact, 50% of consumers have said that they’ve boycotted brands that do not. And it’s not just about where they choose to spend their money; in the UK, for example, up to 80% of people joining a new workforce stated their employer’s diversity and inclusion policy was an important factor in whether they chose to join the company.
A sound business plan
Beyond the indisputable moral obligation, D&I may be the best kept secret to business success. Research has found that diverse companies are more innovative, produce more revenue, have happier customers, and increased productivity.
A study by Boston Consulting Group found that diversity increases innovation, resulting in 19% more revenue. This was further predicated in 2019 with the Diversity Wins study by McKinsey that revealed diverse teams are more likely to make better, bolder decisions. A broader spectrum of representations and identities brings a wider range of creativity and expertise to the table. A varied talent pool means better anticipation of market shifts, larger customer base, and personalised insights into the market. And 77% of CEOs claim their D&I strategy has had a direct positive effect on customer satisfaction.
Productivity also benefits from diversity. According to the Harvard Business Review, teams rich with cognitive diversity produce faster solutions than those that lack this attribute. This study also uncovered that decision making was 60% faster among culturally diverse teams.
Gartner forecasts that financial targets through 2022 are expected to be exceeded by 75% of companies containing diverse decision-making teams. Additionally, teams lacking gender diversity will be lapped on performance by a staggering 50%.
D&I can even help accelerate digital transformation as Bruce Robertson, Distinguished Vice President Advisor at Gartner, explains “High-performance teams are needed for project and product design, and engineering activities. And those that advocate diversity and inclusive behaviors help to scale digital initiatives…Look for ‘cognitive’ diversity, which is mixing people together with different thinking styles, habits and perspectives.”
Knowing where to start can be hard. But businesses now have one less hurdle when trying to build a diverse team. In March 2020, the ‘office’ as we know it became obsolete as we took to working from home. Despite the many shadows cast by the pandemic, working remotely has eliminated a major stumbling block in the recruitment process: geographic location. The 45% of employers who once stated that tools used to recruit from a diversified pool of talent were falling short of their desired expectations, now have one less limitation. The enforced acceleration of home working and ‘work from anywhere’ policies, teamed with the rapid rise in cloud-based business practices and digital technology adoption, has increased the reach of recruiters to expertise across the world.
Building an inclusive economy
B Corporation envision a global economy that uses business as a force for good, one that is purpose-driven and creates benefit for all stakeholders, not just shareholders. B Corp Certification doesn’t just evaluate a product or service, but assesses the overall positive impact of the company that stands behind it. There are now over 3,500 B Corp certified businesses from 74 markets, across all sectors and company size.
B Corp takes building on diversity one step further with its Inclusive Economy initiative, that has been underway for the past three years with over 550 companies participating. B Corp challenges businesses to create opportunities and experiences for individuals of all backgrounds. Through participating in the challenge, key decision-makers took greater action to create more equitable, diverse, and inclusive work environments, and a more just economy. This initiative had laid the foundations for B Corp to support companies in realising internal and external goals related to equity, diversity, and inclusion.
The Inclusive Economy is one example; there are many initiatives taking place in pockets across the globe. In a perfect world, all businesses would behave with moral fortitude based solely on it being the ‘right thing to do’. But we all know reality isn’t as straightforward as that. Despite the challenges businesses currently face, however, diversity and inclusion can not fall down the priority list. Companies cannot afford to assert the current climate as an excuse to forgo D&I assurances pledged in 2020. The people have spoken; diversity is the way forward. With D&I high on the public agenda, teamed with the initiatives of these trailblazing companies, I think we can dare to hope that we’re at the beginning of a seismic shift in tackling the diversity and inclusion challenge once and for all.