How diversity helps companies perform better

March 8th, International Women’s Day is a global celebration to engage companies throughout the world in conversations around diversity, equality and inclusion. Learn how companies are performing better while becoming more diverse.

Being myself a Hispanic woman living in the US, I know first hand the struggles we suffer, but also the opportunities we can reach if we are well prepared and agile enough to adapt as needed.

Today it is important for society in general that we are all respected and appreciated for our strengths. That is why I am a firm believer of the power of the “We culture” vs a “me culture” in all types of organizations. Diversity is vital to any workplace to make it grow by engaging all the personnel to drive innovation and customer success. There are already several studies that find that hiring a demographically diverse workforce can improve a company’s financial performance.

• Gender-diverse business units in the retail company have a 14% higher average comparable revenue than less-diverse business units (5.24% vs. 4.58%). Gallup
• Gender-diverse business units in the hospitality company show a 19% higher average quarterly net profit ($16,296 vs. $13,702) than less-diverse business units. Gallup
• Companies in the top quartile for gender diversity were 15 percent more likely to have financial returns that were above their national industry median. McKinsey & Company
• Companies in the top quartile for racial/ethnic diversity were 35 percent more likely to have financial returns above their national industry median. McKinsey & Company

Why diverse companies perform better

The reasons why diverse business units achieve these results are because diversity enables team working. Companies that are looking forward to becoming more agile and supporting self-organized teams find it easier to work when the culture favors diversity. Diverse companies are more successful because of:

• Increased talent pool, as minorities look for companies they can trust will give them the same opportunities
• Strengthened customer orientation when all ideas are heard within the teams. Women and minorities are key consumer decision-makers, and bring new perspectives to the table.
• Increased employee engagement: all employees feel psychologically safe to speak up, conflicts between and across groups are reduced, stress is reduced because the winning at all cost mindset is replaced by collaboration and “fail fast” mindset
• Increased Innovation: diversity fosters innovation and creativity
• Improved decision making: meetings are more effective as the teams work better together. Communication is more transparent and direct, providing more information to make decisions. Accepting new perspectives brings more solutions and different problem-solving approaches. Decisions are made faster.
• Enhanced company image:  salesforce is on the list of Fortune’s best companies to work for, and it is on the People’s magazine list of “Companies that Care”

Success story from Salesforce

Some companies commit to diversity for Social Responsibility needs, some others do it as a part of agile teams’ re-structuring. In any case, the benefits are huge for the company, the employees and the society as a whole.

One of the companies at the forefront is Salesforce, Led by CEO Marc Benioff Equality is a core value, together with trust, customer success and innovation as per his book Trailblazer. One of their ways to equality is to encourage employees to join their Equality groups “affinity groups that provide a safe space for people to connect around various aspects of their identity” where they can have constructive and psychologically safe conversations.

 “Innovation cannot advance in a positive direction unless it’s grounded in genuine and continued efforts to lift up all humanity”. Marc Benioff

Challenges achieving diversity

Usually, achieving diversity, quality and inclusion is not a one-time project implementation. You may achieve pay equality today, and unconscious bias brings inequality back again next year. It is a moving target but can be kept under control if there are periodic employee surveys.

Diversity also varies substantially across business units within a company, so to achieve the real benefits that diversity can bring, leaders must check the gender balance in specific business units too, not only at the global level. Diversity is also important in procurement, as opening the game to smaller and diverse businesses can bring new and different services, significant price reductions and more customized proposals.

Spark New Zealand was the first telecommunication company in the world to transform their company to build agile teams in order to improve customer experience, speed to market, and to empower our people. The found out that “we had a diverse organization, but we didn’t have inclusivity right. They know how to work together as a group, every voice comes to the table, and it’s extraordinary how much better the outcomes are and how much better the workplace feels. Agile teams start to break down barriers between groups, between cultures, making it a “we” culture for all. You have tech people, accountants, marketing and manufacturing and even a customer, all in the same team. As per Mckinsey’s article “Because squads are limited to no more than ten people and have a clear mission and purpose, everyone has to have a voice. There isn’t a place for anyone to just cruise along.”

Driving change to improve diversity

To Improve diversity and equality, companies need to update some of their policies, strategies, cultures and values to be able to attract and retain minorities. The values need to be embedded in the entire employee experience: recruitment, hiring, onboarding, engaging, performing, developing and departing.

The first steps to successfully drive diversity programs include setting diversity as part of the company values and culture, understanding where the company is today and where is the gap exploring the entire employee experience, setting few measurable targets to achieve, enabling diversity groups to come up with ideas and welcoming change by addressing these gaps/ideas continuously.

As Marc Benioff recommends “take an honest inventory at work, listen to people and never be too proud or defensive to make corrections.”

Lu Paulise – Coach, book author and speaker

luciana@biztorming.com

@lupaulise

Biztorming Training & Consulting