Much of the national discussion in corporate America today is that there needs to be more diversity, particularly at the top. Many employers today are taking this to heart, such as the CEOs of Intuit, T-Mobile, and HubSpot who were among the 100 business leaders recently recognized by Comparably as the Best CEOs for Diversity 2018.
But improving the diversity profile of your company is more than just a nice thing to do — in fact, research suggests that greater diversity is good for business.
Here’s why diversity is so important right now:
1. Greater diversity results in greater profitability. Data from consulting firm McKinsey shows that companies with the most ethnically/culturally diverse boards worldwide are 43% more likely to experience higher profits. To take it further, the data shows that companies in the top-quartile for gender diversity on executive teams were 21% more likely to outperform on profitability and 27% more likely to have superior value creation.
2. Less diverse companies lag behind. According to McKinsey, companies in the bottom quartile for both gender and ethnic/cultural diversity were 29% less likely to have above-average profits than were all other companies in its data set.
3. Diverse companies are more innovative. Recent analysis by Harvard Business Review shows that companies with above-average total diversity (measured as the average of six dimensions of diversity — migration, industry, career path, gender, education, age), had 19% higher innovation revenues and 9% higher EBIT margins.
4. For all the talk, companies are missing big opportunities. According to a recent paper by Deloitte, 71% of organizations aspire to have an “inclusive” culture in the future but only about 12% are taking steps to do so.
