“Strength lies in differences, not in similarities.” – Steven Covey
By John Wysseier, CEO and President, The CEI Group
It’s a given that companies that want to become disruptive forces in their industry and avoid becoming a victim of disruption need, first and foremost, to understand and figure out how best to utilize emerging technologies. But there’s another essential ingredient that can give them an advantage that may be easily overlooked: a diverse workforce. Why?
The reason is that the world is much different from the way it was when most senior management grew up. Technology has dramatically changed the way people interact with each other and the world, but it has affected different ages and kinds of people to different degrees.
What’s more, America is much more ethnically and racially diverse than it was 60 years ago, consists of a greater variety of lifestyles and, more and more, its businesses compete in a global marketplace. Looking forward, these trends are only forecast to continue to strengthen.
So, for a company to compete now and in the future, it’s imperative that it has within it the ability to perceive the world from as many points of view and experiences as possible. Clearly, the best way to do that is to employ a diverse workforce: men and women of all ages, races, ethnic backgrounds, creeds, national origin and sexual orientation.
A look at the demographics underscores the point.
• By 2020, CRMTrends.com projects that people born since 1981 – Millennials and Generations X, Y and Z, who have grown up in the Digital Age – will constitute more than half of the U.S. population.
• A study by the Pew Research Center projects that by 2050, Caucasians will account for 47 percent of the U.S. population, down from 67 percent in 2005, while those of Hispanic background will grow from 14 to 29 percent. Over the same period, Pew expects, the number of Asians will nearly double, from 5 to 9 percent, and the share of those who are foreign-born will rise from 12 to 19 percent. African Americans are expected to remain level at 13 percent, a number that, nevertheless, is a significant minority.
• Women account for more than 70 percent of all U.S. consumer spending, and the number of women who have earned degrees in the sciences, technology, math and engineering (STEM fields) has risen substantially since 1967, from approximately 17 percent of all STEM bachelor’s degrees to more than 35 percent in 2017.
What it comes down to is this: businesses survive that not only meet their customers’ demands but anticipate them. That takes innovative ideas, and research shows that more diversity is linked to more innovation and better results:
• In a recent Forbes survey of 300 senior business executives worldwide, 56 percent strongly agreed that diversity helps drive innovation. Comments by Rosalind Hudnell, director of global diversity and inclusion at Intel, were typical: “Because of our diverse workforce, we’ve experienced a boost in productivity,” she said. “We have a vast amount of diversity that comes into work every day to build technology that plays out around the world. You can’t be successful on a global stage without it.”
• In 2013, the Harvard Business Review published an article entitled, “How Diversity Can Drive Innovation,” based on a survey of 1,800 business professionals and 40 case studies. It found that companies that were highly diversified by both employee background and experience were 45 percent more likely to have gained market share over the previous year and 70 percent likelier to have captured a new market.
• Studies by McKinsey have found that greater gender and ethnic diversity are positively correlated with better company financial performance. They show that companies in the top 25th percentile for gender diversity on their executive teams in 2017 were 21 percent more likely to show above-average profits, and those in the top quartile for ethnic diversity were 33 percent more likely.
• From 1995 to 2005 more than half of Silicon Valley start-ups were founded by immigrants.
In its conclusion, the Forbes study put it well:
“The globalization of business has created a sophisticated, complex and competitive environment. In order to be successful, companies need to continually create new products and services. … A diverse and inclusive workforce is necessary to drive innovation, foster creativity and guide business strategies. Multiple voices lead to new ideas, new services, new products and out-of-the box thinking.”