BLOG: Why diversity matters to capacity-driven success
Diversity tends to be a very hot topic on the web and in the news. It has been for decades. You would think there would be more movement in this direction, and while we gain inches here and there, women still make less than men in the workforce, and both women and minorities represent a meager percentage of CEOs, writes Rita Trehan.
While this looks like it would bankrupt companies to make these gender biased odds more even, the simple math is that it would actually cause companies to perform better. A recent McKinsey study states that while they can’t immediately tie diversity to profit, they can most certain confirm that companies with a focus on diverse leadership are 35% more likely to outperform competitors that don’t, stating:
“While correlation does not equal causation (greater gender and ethnic diversity in corporate leadership doesn’t automatically translate into more profit), the correlation does indicate that when companies commit themselves to diverse leadership, they are more successful. More diverse companies, we believe, are better able to win top talent and improve their customer orientation, employee satisfaction, and decision making, and all that leads to a virtuous cycle of increasing returns. This in turn suggests that other kinds of diversity—for example, in age, sexual orientation, and experience (such as a global mind-set and cultural fluency)—are also likely to bring some level of competitive advantage for companies that can attract and retain such diverse talent.”
The main argument against diversity is that companies claim that they’re just too hard to find, that finding females and qualified minority talent is just too hard to create that diverse slate needed to fill open positions. I’m here to debunk this myth. There are two ways to create a sharp slate of candidates: make the slate yourself and/or buy it.
You can make a slate of diverse talent ripe for your own efforts by nurturing your leadership pool from within. Look among your ranks, and discover what it would take to turn your current employees into the leaders of tomorrow. Surely, there are diverse members of your own team who could be grown into formidable, client-focused leadership in due time. Make the long-term investment in your own future.
Conversely, you could buy talent, which means recruiting efforts. Silicon Valley has gone so far as to create The Boardlist, a database of the top 600 females in the industry who are ripe for top leadership and board positions within the industry. Created by Sukhinder Singh Cassidy, it came in response to the complaint that startups don’t have the resources to do the research to find these women, so Cassidy made it easier for them. Such lists exist throughout the internet and among top MBA programs everywhere. Stanford, Cornell, Columbia, Darden, Wharton – all of these schools have records of diverse graduates who would make top notch connections and candidates. Start there.
All of these decisions are the keys to corporate capacity. In my forthcoming book, I discuss quite a few strategies for HR to solve the problems of their companies, and this is one issue that deserves top attention. It’s not just a softer “feel-good” initiative: it makes good business sense. In an increasingly diverse world, companies who can show that all kinds of backgrounds, genders, and orientations have pathways to success within their ranks will remain market competitive with both clients and candidates. It’s just good business.
Diversity is the pathway to current and future corporate capacity. Aim to make it a top line item moving into your next board meeting, and prepare to meet the demands of the global — and diverse — marketplace.
Rita Trehan is the former HR at Honeywell and The AES Corporation and current vice chair of the Cioindex Inc. Women in Technology Leadership Special Interest Group (SIG).