How can you measure the true impact of diversity?
Measuring the impact of diversity on an organization has always proved to be a challenge. That said, Rocío Lorenzo, Boston Consulting Group, recently revealed a unique approach during a TED talk in Milan. She explained, “We surveyed 171 companies in Germany, Austria, and Switzerland, and as we speak, we’re expanding the study to 1,600 companies in five additional countries around the world. We asked those companies basically two things: how innovative they are and how diverse they are. To measure the first one, we asked them about innovation revenue. Innovation revenue is the share of revenues they’ve made from new products and services in the last three years, meaning we did not ask them how many creative ideas they have, but rather if these ideas translate into products and services that really make the company more successful today and tomorrow. To measure diversity, we looked at six different factors: country of origin, age, and gender, amongst others.”
Although not optimistic about the results, the group went ahead with the study. A couple of months later, the results would prove to be emphatic. Ms. Lorenzo summarizes by stating “The data in our sample showed that more diverse companies are simply more innovative, period.” While this may or may not be in line with your expectations, it does provide actionable data on the need to diversify the corporate pyramid.
Here’s the TED talk in full for further details:
Now, is there evidence beyond the BCG study, of a correlation?
The short answer is yes.
Harvard Business Review conducted a similar study across professionals, case studies and focus groups, and found links between not only diversity and growth, but also the effect of diverse leadership on the performance of a company’s workforce.
While it’s important to be diverse as an employer, it’s imperative that you foster a work environment where your employees can express themselves and cultivate ideas. The stats below speak directly to a correlation between growth and “diverse voices” as opposed to simply being diverse.
“Employees of firms with 2-D diversity are 45% likelier to report a growth in market share over the previous year and 70% likelier to report that the firm captured a new market.”
“Without diverse leadership, women are 20% less likely than straight white men to win endorsement for their ideas; people of color are 24% less likely; and LGBTs are 21% less likely.”
“Leaders who give diverse voices equal airtime are nearly twice as likely as other to unleash value-driving insights, and employees in a “speak up” culture are 3.5 times as likely to contribute their full innovative potential.”
(Source: Harvard Business Review)
Why is it important to know of the correlation and its impact on an organization?
Simply put, a diverse workforce has a direct impact on your ability to attract top talent to your company. A study conducted by Forbes showed that diversity and inclusion initiatives are a determining factor in many global candidate’s decision on whether or not to join your organization. In response, 65% of global employers have diversity specific programs in place for recruitment, while 53% have introduced diversity development programs.
While there is room for improvement, this does indicate that global employers are taking note. Are you?
For more information on a communications strategy around diversity and inclusion, CLICK HERE.