The Benefits of Building a Diverse Team
By Rand O’Leary
“Strength lies in differences, not in similarities.” - Steven Covey
Diversity and inclusion are top priorities in many organizations today, and there are plenty of benefits that come with implementation. First of all, there’s an increase in profitability. A McKinsey & Company report found that companies with leadership in the top quartile for gender diversity were 15% more likely to have financial returns above their industry median, and those with leadership in the top quartile for racial and ethnic diversity were 35% more likely to do the same. On the other hand, McKinsey also found in a follow up that companies with executive teams in the bottom quartile for both gender diversity and racial and ethnic diversity were 29% less likely to achieve above-average profitability.
There’s more at stake than immediate profitability. Through my own experience, I’ve also seen improvements in:
Retention - Diverse leadership communicates that leaders cannot all look and sound the same, and a diverse leadership team helps create an environment where people of all races, genders, sexuality, religions, socio-economic backgrounds can thrive. It creates an environment where employees can see their path to advancement and leadership positions within the industry.
Innovation – When you have a diverse team, it’s a given that you will have access to a variety of backgrounds, experiences, and perspectives, and that translates to a broader range of ideas and solutions offered. In fact, the Harvard Business Review found that diverse teams can solve problems faster than cognitively similar people.
Engagement – Research from Deloitte showed that engagement is a direct outcome of diversity and inclusion. When employees feel connected to leadership and they feel included in the organization’s workflow, they are more engaged.
Reputation – A good organizational reputation is everything, and those dedicated to building and promoting diversity in the workplace are generally widely respected. For example, Fortune published the World’s Most Admired Companies list, which indicates that organizations ranked highly on this list have twice as many women in senior management than do companies with lower rankings. So, while organizations embracing diversity see the benefits and importance of doing so, it is also a critical factor in brand perception.
Diversity begins at the top. In bringing people with different backgrounds and perspectives together, you can effectively create a culture that delivers increased profitability and new ways of thinking, ultimately leading to an organization’s success.