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How to reap the financial rewards of diversity

4 min read


CEO’s are normally quick to hop on ideas, products, services, etc., that can and do yield favorable economic results. Yet, despite encouraging statistics showing its beneficial bottom line impacts, there has been little movement in most organizations to include diversity and inclusion as a strategic business priority.

A Harvard Business Review analysis of top-performing CEOs found a mere 5% of CEO’s whose organizations excel at both year over year financial performance and social and environmental dimensions. Study authors note that performing well on both elements is a rare but possible achievement.

The type of diversity these organizations practice — transcending both visible (race, age, gender, etc.) and invisible (thinking styles, values, beliefs, etc.) differences in pursuit of inclusive excellence — is wicked hard work. Work that requires a healthy appetite for disrupting the status quo.

CEOs and academics offer valuable insights into areas where organizations must change if they are to gain the positive benefits of diversity.

Make diversity of thought, perspective, and opinion a strategic necessity. Relying on the “great minds think alike” maxim will produce little more than incremental improvements in organizational effectiveness, profitability and reputation. “One of the ways organizations adapt is by noticing what’s going on in the environment and trying new things. How do you come up with innovative ideas, unless you have a spectrum of ideas to examine?” asked Richard Boyatzis of the Weatherhead School of Management at Case Western Reserve University. In a global economy, there is little opportunity for organizational growth when sameness is everywhere.

See diversity not as assimilation but as an opportunity for innovation. Robert Lattimer with the John J. Heldrich Center for Workforce Development at Rutgers University described a common problem with diversity initiatives. “We had difficulty in convincing senior executive management and others that the way to get the best results from diversity management was not to force women to act more like men in the organization, or force men of color to act more like white men.” Being inclusive means leaving the melting pot concept of the dominant culture behind and adopting a new culture where there’s an expanded list of what’s valued.

Accept a measure of conflict and increased time. “In an inclusive culture, we create and support heterogeneous teams. They may take longer to make decisions than homogeneous teams, but it’s worth the investment because their decisions will be better informed,” noted George Chavel, CEO, Sodexo North America.

Make diversity a performance metric that matters. “We benchmark diversity objectives at the senior levels of management, and we have regular meetings around my table about how we’re advancing. A portion of our officers’ compensation is based on achieving those objectives,” says Randall Stephenson, CEO, AT&T, in the same Harvard Business Review article as Chavel.

Challenge institutional barriers and unspoken assumptions. Ken Frazier, CEO of Merck offered a classic example, also in HBR, “If a job requires a woman to travel a lot, sometimes people decide preemptively that she’s got a young child at home—this won’t be something she’s interested in.” Google recognized how unconscious bias has affected their lack of diversity and is taking steps to eliminate them: “Combating our unconscious biases is hard, because they don’t feel wrong; they feel right. But it’s necessary to fight against bias in order to create a work environment that supports and encourages diverse perspectives and people.”

“Diversity: the art of thinking independently together.” ~ Malcolm Forbes

Jane Perdue, a leadership futurist with Braithwaite Innovation Group, speaks, writes and consults about disrupting stereotypes, the leadership status quo, and how we think about power. Perdue is @thehrgoddess on Twitter and blogs at LeadBIG.

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