Why You Need A Diverse Company

Why You Need A Diverse Company

Operations | Posted by YouInc.com - July 22, 2020 at 12:30 am

It is an unfortunate human tendency that people tend to affiliate with people who are like them, from gender, to race, to socioeconomic background, says diversity and business consultant Amy Waninger, CEO of Lead at Any Level, LLC, and the author of Network Beyond Bias and other books.

The problem with these narrow affiliations is that it limits the very things that can make a business thrive, from innovation and creativity, to thoughtful decision making that takes into account numerous stakeholders, she says.

Diversity is not only the right thing to do, it has direct, observable impacts on a company’s bottom line. Waninger reports, “A one percent rise in gender diversity yields a three percent increase in revenue, and a one percent rise in racial and ethnic diversity yields a nine percent increase in revenue.”

“Success depends on inclusion, not exclusion,” says Jason Richmond, author of Culture Spark: 5 Steps to Ignite and Sustain Organizational Growth, and Chief Culture Officer at Ideal Outcomes, Inc. 

He adds that beyond an improved bottom line, greater diversity in the workforce means better problem-solving, as problems can be tackled and solved from multiple perspectives. 

Additionally, diversity creates greater innovation. “Diversity generates an atmosphere that encourages far-sighted, broadly-based, open-minded creativity and innovation,” Richmond says.

Despite the evidence of positive benefits to diversity, Waninger says that many companies haven’t put in the time and energy to diversify because it requires change, which feels like risk. “Companies are risk averse,” she says.

And yet, increasing diversity also helps mitigate risks, particularly those from discrimination and wrongful termination lawsuits. “Those lawsuits thrive in places where leadership is not diverse,” she points out.

However, companies that want to diversify must be intentional about it, she says. They have to do it for more than just the optics and in a way that truly creates a change in the culture. 

“Just getting people in the door is not enough. People need to feel safe to create, they need to feel safe to take risks, to share ideas and to fail,” she says. 

Simply hiring a woman or a person of color does not mean the company culture will support the success of that employee. Rather, she says, employers looking to diversify should begin by widening their networks, looking beyond their usual demographics and listening. For example, she says, if you notice that everyone in your company is cisgender, heterosexual, and married, it’s a good idea to connect with something like an LGBTQ chamber of commerce or industry group, attend meetings to listen and find out what their needs are. Similarly if your company is mostly white, there are chambers for African American, Latino and Hispanic, and other racial and ethnic groups as well as industry groups in most big cities.

“By going in and listening, you start to build trust and when you start to build trust you start to build a relationship. That’s how you increase representation in your company; Not by tokenizing but by showing up in a different way.”

Entrepreneurs who are just setting up companies can get a jumpstart on this process by diversifying from the very beginning. “You can set up your company any way you want. You get to choose who’s at the top.” 

She recommends asking people, “I value your opinion and would like to have more of it. How can I make you feel safe and included.”

And then, “whatever the answers are to those questions, becomes your company policies,” she says.

Diversifying is not only in your hands, she says, “It’s your responsibility to your family, to your shareholders, and to your investors that you’re making the best decisions possible. You can’t make the best decisions possible if you only listen to people who look just like you.”

Richmond agrees and adds that diversity in the workforce is not just some feel-good, politically correct goal. “It opens doors, facilitates communication, and broadens both perspective and thought."

Tags: business advice, business success, diversity, equality, leadership

Jordan Rosenfeld

Jordan is a freelance writer and author of eight books--six writing guides and two novels--most recently: How to Write a Page Turner (Writer's Digest Books). Her articles and essays have appeared in such publications as The Atlantic, Daily Worth, The New York Times, Quartz, Scientific American, The Washington Post and many more. Follow her: @JordanRosenfeld on twitter, or visit: JordanRosenfeld.net.

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