How Diversity Helps Your Team Succeed and GrowJuly 28, 2017
Intuitively we all know that diversity helps your team succeed and grow. After all, if your team is composed of people from a wide variety of backgrounds, you’re likely to get an equally diverse approach that can drive innovation, boost sales and increase profits.
Academic reviews confirm that diversity is beneficial on the corporate front lines as well as in the boardroom. That’s why corporations big and small have made it a priority in recent years to bring a diverse mix of people to their teams.
But the same analyses also reveal that diversity alone doesn’t guarantee success and growth. Effective management and a positive corporate culture that empowers employees are among other ingredients that complement a diverse makeup and further strengthen diversity efforts.
Diversity drives innovation
New research provides compelling evidence that diversity unlocks innovation and drives market growth, according to an article in the Harvard Business Review.
The authors reviewed surveys of 1,800 professionals and found that diversity unlocks innovation by creating an environment where “outside the box” ideas are heard. A culture that allows for these compelling ideas to emerge helps companies outperform.
Indeed, the authors found that employees of companies that encourage diversity were 45% likelier to report that their firm’s market share grew over the previous year and 70% likelier that they captured a new market when compared to others.
Still, the authors say that it’s important to have leadership that will hear ideas from diverse voices inside a company. The key ingredients: ensuring that everyone is heard; making it safe to propose novel ideas; giving team members decision-making authority; sharing credit for success; giving actionable feedback; and implementing feedback from the team.
Diversity boosts revenues
Diversity isn’t very appealing to corporate boards and managers if it doesn’t help improve financial results.
A review of studies by Massachusetts Institute of Technology economists revealed that gender diversity in the workplace helps firms be more productive.
While individuals may prefer a less-diverse setting, such homogeneous firms don’t necessarily perform better. For example, in the case of just the dimension of gender diversity, the economists found that shifting from an all-male or all-female office to one split evenly along gender lines could increase revenue by roughly 41 percent.
Don’t forget the boardroom
Diversity starts at the top. Be honest: It’s hard to persuade the rank and file that diversity is a good thing when the boardroom doesn’t represent a varied mix of genders, race and other backgrounds.
In a research spotlight published by the Stanford University Graduate School of Business, the authors highlight the benefits of a diverse board. The authors conclude that diverse boards improve corporate performance.
That’s because diverse boards improve decision making by ensuring that the board has a full array of knowledge. Such boards also overcome tendencies toward “group think” and premature consensus.
Still, there remains debate among academics on the evidence of diverse corporate boards on performance because the results are mixed. You can read the pros and cons in the research spotlight.
QORVAL’s experts have decades of experience on subjects such as corporate diversity, assisting privately held and publicly held firms with such issues in a broad range of industries. To speak with us, please call 239-430-0303 or visit our website at www.qorval.com.
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Copyright 2017, QORVAL and/or Paul Fioravanti, MBA, MPA