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And now to the newsletter…
Topic of the Week: When Diversity Doesn’t Matter
I have discovered an occupation where diversity adds no value: Doomsday prepper who lives off the grid and has zero desire to procreate. If this sounds like your cup of tea, the folks at wikiHow have compiled a step by step guide to get you started. For the rest of us who are building businesses, let’s talk about why diversity is important.
I’m not going to waste time highlighting the diversity stats for executive ranks and technical fields. We all know they’re bad. Instead, I want to focus on how diversity can improve your competitive position in the market.
Much of the focus on diversity tends to be around improved decision making and expanded cultural horizons. More diverse viewpoints = smarter, more informed decisions. Makes sense. However, there’s an important benefit of diversity that we often underestimate. Subconscious bias.
As humans, we have a better understanding of the unique needs and perspectives of someone who is like us. We also have an inherent bias where we feel more comfortable with people who are similar to us. We are more comfortable, so we trust more, and are more receptive.
Dr. John Sullivan wrote a great article that applies this concept to customer relationships. In short, by aligning diversity with your customer’s diversity, you improve your ability to attract and retain customers. For example, if you’re pitching a new product to doctors, will another doctor or a finance guy be more effective in selling the product?
This concept doesn’t just apply to customers. It applies to employees, to channel partners, investors, etc. Having the right mix of gender, race, age, sexual preference, religion, socio-economic background, disability, industry, etc., will help you better align your organization with the market and improve your competitive position. It will also help you avoid situations like this.
Show Me the Hard Numbers
McKinsey did a study that shows companies with diverse boards have 53% higher return on equity and 14% margins.
Harvard concluded that firms with diversity are 45% more likely to grow market share.
A Gallup study comparing gender diversification among business units found gender diverse units had 14% and 19% higher revenue and net profit, respectively.
Something to Noodle On
Did you know that 80% of workers in healthcare are women and 80% of healthcare decisions are made by women? If we apply diversity matching to healthcare, what percentage of executives should be female to make sure we are meeting the needs of employees and consumers? Per the Tennessean, the number is close to 20%. Just something to think about the next time people ask why the healthcare system is broken.
Implementing Diversity in Your Organization
Diversity isn’t a program that you run on auto-pilot. It is engrained in your company’s culture and a proactive effort. Here are a few quick articles to get you started:
Quick and dirty bullet points on improving diversity in the workplace
5 techniques to improve diversity in hiring
6 tips for building an active candidate strategy
ROND Community Section
Today I want to dedicate the community section to a specific question to readers: Are you actively looking to improve diversity in your workplace?
We want to hear from you, just click this link and tell us what you’re doing!
Do you have feedback on this newsletter or updates for the community section? Leave a comment below and we’ll be in touch shortly!