Diversity in Business. You Need It.

Diversity in business. It seems that the term gets thrown around quite a bit. Most recently, by corporations that would scream from the virtual rooftops that their organization has and promotes diversity. It gets plastered all over Twitter, Facebook, and LinkedIn. In most cases, under further inspection, the diversity is mostly surface level. Well-meant diversity posts show a rather uniform picture of employees of the same gender and or race are more the rule than the exception. And that’s not to say that the efforts of these diversity posts are insincere. Quite the opposite, diversity is, in fact, quite hard to achieve in the real world. One can only applaud an organization’s efforts to become more diverse. There are structural reasons why companies struggle reaching any form of diversity that is ingrained in such a way, it actually only makes sense that organizations are as uniform as they are.

Why Businesses Fail at Diversity

One of the biggest reasons why companies are more uniform than most would admit is down to hiring. It’s not so much policy, but most hiring managers. It’s a fact that we usually resonate more with people who are similar to ourselves. When hiring managers are looking for a new addition to the team, they not only think about the individual contribution that person can make but also how that person will “fit” within the team. And this is by no means a deliberate process, we don’t even know we do it. This is called unconscious bias, where we make judgments we aren’t even aware of based on race and gender, but also education level, economic status, and sexual orientation. We essentially gravitate towards hiring people who are similar as we try to make someone “fit” in the team. Surprise, surprise, this will be someone who looks like you. That’s not to say everyone does that, but if you look into certain industries, you will immediately recognize that the people working there are all similar. This is unconscious bias at work.

Why Bother?

But you might ask now, why is this bad? Isn’t it essential for teams to work in harmony and perhaps hiring people with the same background and demeanor in life will contribute to that? Well, the first thing would be that this creates quite an unfair barrier for people from outside those circles to get into specific industries, which will tread a very fine line of discrimination, which blatantly is illegal. The more positive stimulus is that diversity, there’s the magic word again, is actually beneficial for businesses. A BCG study of 1,700 corporations found that companies that have a diverse workforce actually are more innovative and have better financial results. Companies with a diverse management have 19% higher revenue than those that don’t.

Why it Benefits Businesses

To drive innovation more effectively, you need dissenting voices in your team. One can easily take Kennedy’s Bay of Pigs fiasco as an example of what can go wrong when people who are too like-minded or too much looking for consensus are put together. In the business world, this is the equivalent of having extremely uniform teams. A diverse group works better to stimulate dialogue and to look at the issue from multiple angles. Diversity doesn’t only breakthrough groupthink, it also enables the participation of people who will bring a specific background and viewpoint. In such a way, it’s a better representation of society, which in almost any society is diverse. Think of HDB Singapore who actively works to place foreigners and expats around its properties to ensure integration and preventing clustering. This is an excellent example of how people of all backgrounds should be placed around the organization.

How to Achieve Diversity

And although diversity benefits are clear and desirable, it’s not necessarily easy to achieve. Especially considering the previous mentioned unconscious bias. So, how do you get to this without setting quotas to hire different genders and races? That might be going too far, and in some cases even illegal. It starts with some serious self-reflection at first. Awareness of unconscious bias is part of that, which can be kicked off with some training. It’s also essential to discuss bias at the managerial level at least, to confront hiring managers and team leaders with the pitfalls everyone falls in. If needed, get outside consultants to come in and help stimulate the organizational discussion. Or get external consultants to sit in own the hiring process, including interviews and post-interview assessments. It’s quite a commitment, but know that companies who manage to crack this diversity conundrum will enjoy a stronger internal discussion, and possibly more innovation and revenue. And the diversity post on social media will look the real deal as well.