Diversity is not a new subject in the business world, and it continues to be a hot-button issue. Many companies have realized the importance of workplace diversity and are taking tangible steps to cultivate a well-rounded and diverse team. Other companies on the other hand have been slow to diversify their teams, especially at the leadership level.
Diverse organizations have stronger employee value propositions, and they are more successful in recruiting and retaining top talent. “Diversity in leadership can help a company secure access to more sources of talent, gain a competitive recruitment advantage, and improve its global relevance.” McKinsey
The reasons why racial and gender diversity is so vital to business success are countless. Any company that wishes to record elevated financial returns, and do so faster than usual, should be willing to employ diversity, especially within the C-suite.
Improved Business Results
Your executive team must reflect your client/customer base to a considerable extent. Customers are a top priority to any thriving business. Irrespective of their gender, age, and ethnicity, every customer’s desire, expectation, and need must be met adequately.
Now, imagine an executive team made up of people of the same gender and ethnicity. Such a company will have a tough time satisfying a wide range of customer bases.
Diversity in the c-suite is the key to excellent customer satisfaction. Since the C-level executives call the shots, having an increased representation across gender and ethnic groups at the power table will only improve decision making. It also makes it easier to trace and adapt to market changes and evolving customer habits.
Take a look at the health care industry, for example. Every gender is prone to illness once in a while, leaving the health care industry with the most diverse customer base to serve. That explains why 43% of hospital executives are women. This gender-based balance is why hospitals can meet the critical and varied needs of their patients.
Diversity in leadership has proven to be extremely useful in improving the financial buoyancy of an organization.
When faced with a difficult task, or a threatening situation, merging diverse ideas, perspectives, and approaches can result in a more creative and reliable solution.
According to a recent study published by the American Psychological Association, social scientists found that people who have deep relationships with someone from another country become more creative and score higher on routine creativity tests. The study tracked business school students during a 10-month MBA program. They tested the students using standard creativity measures at the beginning and end of the school term. They found that students who had befriended or dated someone from another country during the term became more creative.
Increased Positivity and Happiness among Employees
A diverse leadership team will most likely result in a diverse workforce. This allows the workplace environment to be more conducive for all employees. Diversity allows for beneficial collaborations between employees of varying gender and ethnicity, which offers a sense of inclusion and belonging, especially to ethnic minorities. Not only will having a diverse leadership team increase job satisfaction amongst employees, but it will also make them realize that they all have equal opportunities to attain executive roles.
There’s a distinct benefit to employee happiness; one study found that happy workers are 20% more productive. Fostering an inclusive environment is more than just making sure employees are happy, too. Intersectionality includes making sure that everyone has a voice and that they are safe from violence both emotional and physical. Everyone deserves to feel safe in the workplace and to be their authentic self.