Diversity is a hot term in today’s business world. Unfortunately, though, it’s often bandied about in ways that detract from its substance.
The fact of the matter is that diversity is an essential concept for successful business operation, and it holds concrete value to those that take it seriously.
In this article, we have a look at exactly what it means for a workplace to be diverse and how diversity can translate into better business performance.
There’s no simple equation for why diversity in the workplace leads to greater organisational success. This is because diversity is not just a static, self-contained feature of an organisation but rather a starting point from which a diverse range of principles and practices can flow. Let’s look at some of the ways in which workplace diversity can translate into greater organisational performance.
Off the top, workplace diversity matters because it establishes core organisational values. Some of these values are inherent in the concept of diversity itself, while others are identifiable in its flow-on effects.
In the most obvious way, workplace diversity promotes values of fairness and equality. These are essential values to instil in a workplace because they immediately establish a sense of trust and confidence amongst workers. Giving workers that trust and confidence not only ensures that a workspace is pleasant to work in, but also that team members feel encouraged to put in their all. When there is low organisational trust and confidence, that’s when people start hiding in their offices and cubicles, afraid to get out there and give voice to their thoughts.
Research has found that higher levels of trust in the workplace correlate with greater productivity. Within that research, it has been shown that even simple organisational decisions like restricting access to paid overtime can erode trust and affect productivity in short order.
With this in mind, it’s easy to see how putting diversity at the centre of workplace policy can make team members feel as though the organisation they work for is fair, open, and trustworthy.
Another value that workplace diversity instils is inclusivity. When an organisation puts diversity at the forefront of what it does, it is saying that it wants team members to feel comfortable bringing their own individual perspectives and ideas to the table. Once again, this makes team members more confident to speak their minds and make stronger contributions to the team.
But at the level of the team as a whole, spotlighting perspectival diversity has the secondary effect of promoting a collaborative ethos. What’s funny about this is that even just the appearance of a collaborative ethos can have big benefits for productivity, as a study out of Stanford University showed recently (workspace psychology is a curious beast).
But of course, nothing beats the real deal. If an organisation is serious about diversity and the collaborative effort it implies, the business productivity uptick is steep, as countless studies have now shown.
There are many reasons, such as those listed above, that allow for speculation on how having a diverse workplace might have a positive impact on business performance. But at the end of the day, the proof is in the pudding.
The simple truth is that the bare fact of workplace diversity translates time and again into better business outcomes. Research by consultancy firm McKinsey, for example, has found that those companies that fall in the top quartile for gender or ethnic diversity are significantly more likely to reap a financial return that exceeds national industry medians.
To quantify it, those companies in the top quartile for ethnic diversity had a 35% greater chance of beating out the national industry median for financial performance than those in the bottom quartile. The figure for gender diversity is similarly significant at 15%.
Of course, these numbers don’t allow for the inference that diversity causes business productivity, but they do suggest that real business benefits are being experienced by those organisations that pursue diversity as an outcome. We are still working out all the reasons as to why this is the case, but the evidence points to the wider range of perspectives and voices brought to the table when considering standard business practice.
Okay, so diversity is a good thing for organisations. But how do you actually implement it in a way that works?
Simply organising a diverse team will not automatically translate into business success. As we showed above, the positive effects of workplace diversity are complex and varied, so your policy needs to be supported at several different levels in order to be successful. A diversity policy might begin with hiring, but it needs to be elaborated quite a bit further than that to be successful.
To get an idea of the kind of multi-channelled effort that goes into a successful diversity policy, you can check out the diversity report of a major company like Facebook. Of course, Facebook has far more money than the average business to invest in initiatives to promote diversity across its workforce. But reading the report nonetheless has the benefit of breaking down some of the types of things that smaller companies can be doing to emulate their success.
For example, larger-scale practises Facebook has put in place are:
But if dropping $100 million on an initiative to support suppliers owned by a diverse range of people is not within the scope of your possibility, here are some more practical steps that you can take.
Diversity, of course, starts with identifying talent.
But putting a job listing out there and waiting to see who turns up is a sub-optimal start to a proper diversity policy. To be recruiting the best diverse talent, it’s more productive and efficient to actively identify potential talent pools and pursue them proactively.
This might mean, for example, going directly to universities and streamlining talent through directed outreach initiatives. It might also involve actively headhunting proven leadership talent from other organisations.
But an organisation shouldn’t be satisfied with merely identifying talent. It should be identifying sources of talent.
When going out and finding diverse talent, it’s also important to take stock of what kind of diversity you are actually looking for. Organisations often settle for quite a narrow form of diversity, often by focusing on one or two points of difference. The irony of this approach speaks for itself, though.
The most well-known points of diversity include:
But an organisation is limiting itself if it only tries to nail the big diversity categories. Some of the other, more subtle (but no less important) diversities that can make an organisation better include:
To put it in perspective, you can find diverse talent from within a pool of candidates who did the same degree at the same university and come from more or less the same background—but is this really enough? To make sure it is gathering together a team of people that truly think in different ways, an organisation needs to broaden its scope.
Not all of these diversity indicators are easily identifiable in a talent pool, so they may be difficult to select for. But it is possible. The best way of identifying talent that is diverse in these hidden ways is to use the application process itself to get candidates to reveal more about the way they think.
It’s all well and good for the executives to be in the know about why diversity is a good thing for the business. But if the organisation is to take diversity policy seriously, then everyone needs to be buying in. People need to understand why diversity is good.
So, a step in the right direction is to educate the workforce on why the policy is being implemented. This can involve publishing new policy documents to the whole staff, but it might also involve running seminars or online training modules to really grow organisation-wide understanding.
To enhance understanding, it’s also important to make sure the ideas being conveyed are given material applications. Diversity needs to be transformed from a popular buzzword into a concrete strategy for better business performance. Consequently, a sound education plan should address real-world examples and provide practical coworking tips.
Ensuring organisational buy-in for a diversity policy also means being realistic about its prospects of success. Once again, the buzzword approach to diversity—’Diversity is good. Full stop.’—is unlikely to succeed because it leaves an organisation blind to the many difficulties of actually making a policy work. Research from New York University, for example, has found that when an organisation acknowledges why homogeneity was bad and why it is difficult to overcome, the degree of employee buy-in for diversity is much higher.
It shouldn’t all be one-way communication, though. Your team no doubt has some valuable insight into how diversity can be implemented throughout the organisation. So, make sure you allow them to offer feedback on any new policy and encourage them to voice any ideas they might have about how objectives can be achieved.
It really goes without saying that, if you are going to maintain a diverse organisation, you need to have a clear workspace policy in place that ensures inclusivity, respect, and understanding.
In its most basic form, this looks like an anti-discrimination policy. There should be a solid team-wide understanding that any kind of discrimination, exclusion, or derogation is not to be accepted. This shouldn’t really be necessary, but it does need to be laid down as a concrete expectation.
But supporting this basic policy a diverse organisation should also have in place:
Where a lot of organisations run into trouble is that they are left playing catch-up when complaints are made. In such a situation, it can be difficult to make aggrieved parties feel as though their concerns are being taken seriously. It can also be harder to effectively deal with offending parties because expectations have not been given enough clarity.
Better than simply having a reactionary anti-discrimination policy (that is, a policy that only comes into effect when something goes wrong), it’s often beneficial to have a proactive inclusion policy that actively encourages workplace inclusivity.
For example, having cultural exchange events in your workplace can help to generate feelings of acceptance, and it can also help to bring about a greater level of personal understanding amongst team members.
Diversity might begin with talent acquisition and an expectation of inclusivity, but it certainly doesn’t end there. If your organisation wants to maximise the benefit of the diversity of its personnel, it needs to be building operational policy to support them. Acquiring diverse talent should not be seen as a self-contained initiative but rather a key ingredient of a broader strategy.
In particular, since the primary aim of a diversity policy should be to make the most of a variety of ideas and perspectives, it should be integrated into organisational policies around collaborative work.
This integration is going to look different depending on the nature of an organisation’s work.
One example might be that new project proposals need to be agreed upon by a diverse leadership panel. Another example might be that marketing material should be signed off on by designating diversity and equity office-holders. Initiatives like these make concrete the idea that considering a multiplicity of perspectives is good for improving the work produced by the business.
But probably the most important ways that a diversity policy should be integrated with an organisation’s other policies and practices are far more indirect. For example, Diversity Council Australia is now advocating for the flexible work arrangements of the global pandemic to become the new normal because they allow for more inclusivity. For example, flexible work options make it easier for those with caring responsibilities, regional commutes, or disabilities to work more easily—all the better for businesses, who get to tap into wider talent pools.
At a basic level, an organisational diversity policy can be integrated with more broad-scoped policies and practices designed to promote open communication and collaboration.
You can’t turn your workspace into the best office in the world overnight. Whether it’s talent acquisition procedures or operational protocols that you are transforming, you need to ensure that the change you are bringing about is sustainable.
In practice, this might mean setting multi-year targets for organisational transformation. See, for example, Facebook’s long-term projections for change.
If diversity is something that your organisation achieves overnight, it’s most likely a superficial change that has occurred. So, instead of ticking boxes, form your organisation’s approach to diversity along sustainable lines and pursue meaningful, longer-term goals.
Another critical element of your diversity change is to continually check in on what’s working and what’s not in terms of the policy shift. Diversity is not a magic button that, when pushed, turns the light of productivity on. It might very well be the case that your diversity policies are not working—that you are not identifying the right talent, for example, or that you are not finding that critical collaborative groove.
So, set regular review schedules—every 6 to 12 months is a good idea—to see how things are progressing.
Once again, it shouldn’t simply be a case of top management making all the decisions. It should be a case of generating organisation-wide feedback about how things are progressing. This process might not just uncover hiccups in the current policy, and highlight unexpected positives that can be harnessed for greater opportunities regarding innovation and productivity.
What we’ve seen in this article is that organisational approaches to diversity can go one of two ways.
Down one path, an organisation can use diversity as a box-ticking exercise. Down another, it can take diversity seriously, pursuing an end goal of long-term operational improvement.
The evidence is clear that diversity is good for business in a whole host of different ways. But this does not necessarily mean that it’s easy to make diversity work. Going beyond talent acquisition and anti-discrimination policies, organisations have to make diversity a core value of their operations more broadly.
This change may be difficult and it might not be a magic pill. But if the right objectives are set, diversity will work in the end.
In slogan form, diversity is good. But in reality, diversity is great.