What do General Motors, Salesforce, Novartis, and Marriott all have in common?
In addition to being successful global enterprises, all have made creating a more diverse and inclusive workforce a priority.
From mentoring programs and task forces, to extensive training, these companies represent a growing number of organizations who are recognizing that diversity is not only good for society, it is good for business.
Workplace diversity and inclusion has been a hot topic for some time. The #MeToo and Black Lives Matter movements have brought it to the forefront. These issues are on the mind of employers and employees alike, and are relevant to all aspects of running a business—from acquiring talent and preventing discrimination, to creating a diverse workforce, particularly at the leadership level.
How Diverse Leadership Can Positively Impact the Organization
It sounds plausible that diverse leadership is good for an organization, and there is plenty of research to support it. The benefits of diversity at the corporate level have been extensively studied and documented. Here we examine a few of the most compelling reasons to build a diverse leadership team.
Having leaders with varying backgrounds and values promotes creativity and leads to a more innovative team. According to a study by Boston Consulting Group (BCG): companies that reported above-average diversity on their leadership teams also reported innovation revenue that was 19 percentage points higher than that of companies with below-average leadership diversity.
It turns out that organizations who value diversity have an advantage when it comes to acquiring talent. According to a Glassdoor survey of active and passive job seekers, 67% said that when evaluating companies and job offers, it is important to them that the company has a diverse workforce.
Promotes Smarter Decision-Making
A study of 200 teams by Cloverpop found a direct link between inclusive decision making and better business performance. Specifically, inclusive teams made better business decisions up to 87% of the time. Teams that follow an inclusive process made decisions twice as fast with half the meetings. And decisions made and executed by diverse teams delivered 60% better results.
Yields Greater Financial Returns
According to research conducted by McKinsey & Company: companies with leadership in the top quartile for racial, ethnic, and gender diversity were 25% more likely to have financial returns above their respective national industry means. While greater diversity at the corporate level doesn’t automatically translate to more profit, it does indicate that when companies commit themselves to diverse leadership, they are more successful.
Helps Create an Inclusive Culture
Finally, organizations with a culture of inclusion have an advantage. According to Deloitte Insights, organizations who have succeeded in developing an inclusive culture are eight times more likely to achieve better business outcomes. Companies who are serious about creating a diverse and inclusive culture must start at the leadership level. Build a diverse leadership team and the culture and the benefits will follow.