It sounds like a cliché, but the world is changing. By 2050, the U.S. Census Bureau estimates that racial minorities will become the majority of the population. If you travel to any big city in the country, you’re likely to see a mix of people of different nationalities, religions, ages, ethnicities, and genders working side-by-side. In 2020, the country elected its first black, South-Asian, female vice president, Kamala Harris. The Miami Marlins baseball team hired Kim Ng, an Asian American, to become the MLB’s first female general manager. While progress is happening throughout the U.S., the business world is progressing a little more slowly, in some cases.
There are only five black CEOs on the 2020 Fortune 500 list. They are Marvin Ellison of Lowe’s Home Improvement, Kenneth Frazier of pharmaceutical company Merck, Roger Ferguson at financial services company TIAA, René Jones at M&T Bank, and Jide Zeitlin of luxury brand holding company Tapestry. (Wahba, 2020).
We’ve got the inside scoop on the importance of diversity for small businesses, plus proven steps you can take to diversify your business.
Quick Look: Here’s What Diversity In Business Looks Like
Age. We’ve all seen those articles describing the industries dying out due to millennial purchasing habits. There are also a million articles about the precarious economy created by the boomers. Still, a diverse business has a mix of old and young employees.
Experience. Having employees with different experiences and varied perspectives leads to higher resourcefulness. If you’re only recruiting from one pool of candidates, you’re not encouraging diversity in the workplace, even if all of your employees don’t look the same, speak the same languages, etc. These experiences can include military service, different educational backgrounds, foreign work training, and more.
Gender. Women control 51% of the wealth in the United States, and they influence up to 80% of all purchases made, industry-wide. (Levine, 2020).
The importance of diversity based on gender is underlined by a straightforward question. Can a successful company market or sell to women without their input on the inside?
Race, ethnicity, culture. When it comes to diversity in the workplace, this is probably what comes to your mind. The business world is international, and the importance of diversity is never more apparent than when a company finds itself unable to deal with people who look and sound different than what it’s used to. Qualified employees and managers from all walks of life open up possibilities for their company.
Variety Is The Spice of Life. It’s Also How You Make More Money.
The Harvard Business Review found that diverse companies had better financial performance than similar, less varied companies. In fact, companies with management teams that include people of different ages, genders, races, and sexual orientations enjoyed a 10% boost to their performance. (Levine, 2020). Big companies are starting to notice that diversity improves profits. Robert Stevens, former chairman and CEO of aerospace company Lockheed Martin, said, “At Lockheed Martin, we recognize that diversity is not just a short-term trend. It is a business imperative.” (Skrzypinski, 2011).
Companies that make diversity in the workplace a priority are letting their employees know that they will value all voices. This course shows that LGBTQ employees are in a welcoming place that allows people with differing viewpoints or perspectives to contribute and learn. As a boss, that should intrigue you because employees are your connection to your customers. When your employee pool grows more varied, so will your sales pool. The importance of diversity is that it doesn’t shut anyone out of business decisions based on age, sex, background, experience, or any other reason not based on merit.
All employees enter at the same level, and how they progress is up to them. It must have taken Tim Cook, the CEO of Apple, the first company to hit $1 trillion valuation, a lot of thought before he came out in a Bloomberg article as a gay man in 2014. The business world is still a tough place for LGBTQ people. But, Mr. Cook quoted Dr. Martin Luther King saying, “Life’s most persistent and urgent question is, ‘What are you doing for others?” (Cook, 2014). As a business owner, it’s important to move the ball forward whenever you can.
Diverse Teams Are More Creative
It may sound simple, but people with different perspectives usually come from diverse backgrounds. Diversity in the workplace encourages left-brain thinkers to compromise with right-brain thinkers, women to shed light on what female shoppers look for, and veterans to share their work ethic with artists who share advertising tips to salesmen. Every combination of dissimilar people will come up with countless ways to tackle problems. Foreign-born employees may bring in a new point of view on a particular product or service, or they may help you discover untapped resources in your community that you can reach out to. If your team feels comfortable discussing out-of-the-box ideas, working in diverse groups, giving credit where it’s due, and speaking up when problems occur, creativity will abound, and innovation will increase. According to Josh Bersin, a researcher on corporate talent, companies with high inclusion levels are 1.7 times more likely to be innovation leaders in their respective markets. (Bersin, 2019.). For example, Alphabet, Google’s parent company, has a consumer hardware team that researches, designs, and develops new technology. Known for being innovation leaders, this branch of Google is headed up by COO Ana Corrales, one of Fortune’ 50 Most Powerful Latinas in Business. (ALPFA, 2018).
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