17 June 2016

Diversity: Not Just a Buzzword

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When we talk about diversity in organisations, it’s usually in a “warm and fuzzy” context. It’s a buzzword, a positive phrase thrown around in mostly an HR context. Very rarely do people ask, however, why diversity matters. From a social wellbeing perspective, the argument for it is pretty straight forward: we should be hiring a diverse workforce because it’s the right thing to do. However “doing the right thing” isn’t something that shows up on bottom lines. It’s great in theory, but unfortunately easy to overlook for the managers thinking only in terms of inputs, outputs, and profits. To convince these people, we need to talk about diversity in terms of tangible benefits to organisations.

       (When talking about diversity, it’s important to remember that identities extend beyond race and gender.)

Three business school professors recently collaborated on series of studies in which they put people into groups (some with a diverse group of people, and some without) and had them perform various tasks. The researchers found that while the more-diverse groups had more trouble working together (disagreeing on ideas, less confident in their product, etc.), they actually outperformed the less-diverse groups in the tasks.

The similar studies that I found came up with the same results: the more diverse groups had rougher production processes, but produced better results in the end. The typical pro-diversity narrative would explain this by saying something like “diverse people bring diverse perspectives”. However the researchers found that the benefits weren’t that linear. Instead, in the diverse groups everybody voiced more unique ideas, and people were more open to hearing them. Comfort, as it turns out, isn’t always a good thing. Hearing from people different than you means you’re more likely to challenge yourself and the people around you, leading to better work. This increase in quality of production can also lead to increased financial performance, as McKinsey has found in a study. Companies in the top quartile for gender and racial/ethnic diversity are much more likely to finanial returns above the national industry median.

Finally, it’s important to remember that a diverse, inclusive organisation in which innovation flows isn’t achieved from hiring an extra person who may look a little different than the rest of your team. It takes organisational investment. As Josh Bersin wrote in Forbes: “The message is clear to me: in today’s global business environment – filled with challenges in demographics, skills, and culture – companies that build a truly inclusive culture are those that will outperform their peers. Why? People perform best when they feel valued, empowered, and respected by their peers

Sydney is from the United States and is spending her American summer /Australian winter working as a Marketing Intern at Akolade. In a few months she’ll start her third year at the University of Michigan and is working towards a Bachelor of Business Administration and a Bachelor of Arts in Women’s Studies. After she graduates, she’s hoping to work in consulting or marketing, but still isn't quite sure what she wants to be when she grows up.  

This is Sydney’s first time in Australia, and she’s been surprised that people haven’t laughed at her name more. So far, she’s adjusting to the slight cultural differences (Australian coffee is better, some words are spelled a tad differently, and “carryout” food is called “takeaway” food). She’s excited to be working with the marketing team at Akolade and continuing her business education outside of the classroom.

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