Valuing diversity is the key to creating opportunity – for the business and its people

The discussion on ‘diversity’ among senior managers is increasingly expanding beyond social justice to include business performance. The number of executives who cite diversity as a top priority has risen by 32% since 2014 according to a 2017 Deloitte study.  This study also found that increasing the diversity in the business, more fairly compensating that diversity and addressing the under-representation of women and minorities at senior levels in the organisation was viewed as a competitive advantage by 78% of the respondents. Yet, much of the diversity discussion centres around what the statistics tell us about the historical and current ‘state of play’ in the workforce – the demographics.

To move beyond the present and shape a future where the workplace is engaging for all employees and create businesses that are nimble and dynamic, we need to be intentional about ‘valuing’ diversity. Not just pursue demographic diversity but tap into the full range of diverse skills, experiences and perspectives that already exist within your company – the psychographics of your organisation.

Today, it’s those leaders that harness the power of diversity in their workplace that will create the greatest opportunities; the opportunity for the business to evolve and adapt in an ever-changing landscape and the opportunity to build an ever-more diverse workplace that engages and motivates people to create and collaborate.

Moving beyond the problem toward sustainable, high-value solutions

Much of the focus around workplace diversity has been in framing the problem. Quantifying the extent of the under-representation of women and minorities in various industries, career pathways and business roles. Highlighting the wage disparity that exists in these under-represented groups. Identifying some of the underlying causes, including deeply-entrenched social traditions, conscious and unconscious bias, the way we recognise and reward business value and just plain bad behaviour that’s aimed at preserving the status quo.

This is useful analysis as it drives problem recognition and creates impetus for change. But the tyranny of data-driven problem recognition is that these findings can muddy the waters when crafting a solution that will drive meaningful long-term change.

Specifically, by ‘categorising to analyse’ we can lose sight of the fact that there is significant diversity in demographic sub-groups. For example, a young married professional woman aspiring to the C-suite has a very different worldview from a single mother of two in customer service who aspires to provide for her family. Both might be 35-year-old females, but they have very different skills, diverse perspectives and, importantly, offer unique value to the company.

Categorisation can also blind us to the diverse value that cuts across the readily definable physical traits of gender or ethnicity. Most businesses have an array of diverse perspectives that are under-valued due to organisational hierarchy, roles, experience or choices around work-life balance. If you under-appreciate the value offered by employees ‘lower’ in the organisation or the insights that come from younger staff, then you will struggle to get the business to embrace the opinions of those from different cultural backgrounds or with different physical characteristics.

Additionally, diversity programs aimed at controlling the traditionally-entrenched bias that lead to a lack of diversity in the workforce, senior management teams or the boardroom have proven to be ineffective and, in many cases, detrimental to improved diversity. Research by Professors Frank Dobbin (Harvard University) and Alexandra Kalev (Tel Aviv University) showed that the diversity programs that are the most effective at creating a workplace where diversity thrives are those that engage the organisation in using diversity to improve the business – expanding the talent being recruited, solving problems or furthering the organisation’s social agenda.

Being intentional about tapping into diverse perspectives translates into business value

Diversity is at its most powerful when its value is pursued in an intentional way. Where you not only seek out and apply the diverse perspectives that come from gender or ethnic background but also through the differing worldviews of the widest possible range of skills and experiences. Where the customer experiences and operational knowledge of frontline staff are brought together with the high-level operational experience of middle managers and the strategic perspective of senior leaders to identify improvement opportunities that shape the strategic direction of the business.

Although there is research that shows a statistically-significant link between higher-than-average diversity and increased innovation revenue (Boston Consulting Group, 2018) as well as greater senior management diversity generating higher profits (McKinsey, 2018), these studies demonstrate correlation without causation. In other words, a more diverse organisation may be statistically likely to have above average business performance but there is no evidence to suggest that a more diverse workforce or management team is the direct cause.

Research by KPMG Australia moves closer to explaining how diversity is a lever that an organisation can push to improve business results. Specifically, that the value of diversity is magnified when it is used in an inclusive way. Organisations where employees think there is both a commitment to diversity AND they feel included, report even better business performance in terms of ability to innovate, (31% uplift) responsiveness to changing customer needs (15% uplift) and team collaboration (13% uplift) than organisations that are simply highly-supportive of workplace diversity.

Create an upward spiral of opportunity

As a business leader, you can demonstrate to your organisation that you see diversity both as part of your business’s ‘values’ as well as a competitive advantage. Certainly, create and promote a more diverse workplace. But also, actively seek to extract the business value that lies within the diverse set of capabilities and perspectives that exist across the organisation.

Routinely bring together cross-functional, cross-cultural teams to pursue improvement initiatives, test new business ideas and adapt to changing business conditions.  Staff these teams with the people having the greatest knowledge of the improvement opportunity being pursued and support them with a senior management sponsor. This will improve the overall business outcome as well as give your people opportunities to collaborate with different perspectives and backgrounds. It will create leadership opportunities for aspiring young female executives as well as provide the single mother of two with the opportunity to bring meaning and purpose to her job.

The value generated by tapping into diverse corners of your organisation will create an upward spiral of opportunity. You create opportunities for people within the business to grow, develop and contribute in a meaningful way. This creates a workplace culture that attracts and retains a diverse workforce, nurtures and develops a diverse range of future business leaders and makes everyone in the organisation feel valued and a part of something larger than themselves.

As a result, you’ll develop an organisation that is more creative, more collaborative and more focused on generating value. Your business will gain the nimbleness and adaptability to recognise and seize strategic opportunities in the shifting business landscape. Attributes that are essential for thriving in today’s highly-dynamic business world.

The opportunities created for both your people and your organisation then become the motive force for further leveraging the power of diversity to generate greater opportunity.

What are you doing to utilise the diversity that already exists in your organisation? Do you see diversity as a social responsibility or a competitive advantage or both? How effectively is your organisation using the value of the diversity around them?

I’d love to hear your thoughts and experiences in the comments below.