Diversity, equity, and inclusion (DEI) programs and initiatives continue to dominate corporate trend forecasts. This comes as excellent news for those committed to ethical business practices but, as remains the case with corporate trends, often serves as nothing more than lovely window-dressing. Because corporations develop products to solve our needs, they want people to like and trust them, too. In some cases, this has resulted in some very well-intentioned but truly bad misinterpretations of DEI work. In the worst-case scenarios, corporations ignore DEI altogether, resulting in unforgettable and entirely disastrous #DiversityFails.
More often, diversity is seen as an instrument in the corporate toolbox to manipulate consumers into believing that they are a genuinely good-hearted entity working to bring the world together, hold hands, and spring into spontaneous song on a lovely Italian hilltop—profits be damned!
The surprising truth, however, proves that diversity, equity, and inclusion directives don’t have to be viewed with rose-colored glasses or even socially conscious. Do-gooder initiatives also serve the bottom line and profitability very well, no matter your social beliefs. Here, we present five good reasons—that have absolutely nothing to do with social justice or ethics—why diversity builds stronger, more profitable companies and organizations:
1. Non-homogeneity of ideas.
Logic dictates that the more alike in manner, culture, outlook, and biology a group remains, the narrower its thinking. Pulling together a group of like-minded individuals results in a narrow set of like-minded ideas that keeps organizations from being cutting-edge and pushing boundaries. This may result in less conflict, but it also means less innovation and out-of-the-box thinking. Without innovation, companies die. This excellent reason demonstrates how diversity fosters the sort of thinking that can make the difference in any organization’s survival.
2. Workforce diversity = product diversity = consumer base diversity = higher profitability.
The more variations that exist in an organization, the greater the potential consumer base for those variations. Then, the greater the consumer base from those diverse offerings, the higher the profitability. Let’s make this simple: having different types of people who think and work differently results in a company that creates different types of products, which in turn appeal to wider (and different) consumer bases. Ultimately, more consumers result in greater profitability.
3. Avoid potential pitfalls and disasters.
A company lacking in diversity of thought, experiences (lived and learned), and approaches also becomes more prone to errors and pitfalls. Homogeneity of thought also means homogeneity of blind spots. A more diverse workforce, being naturally attuned to more issues and factors both culturally and otherwise, remains more likely to catch a bad mistake before it costs an organization dearly, either in profits or public opinion. Or both. True, it wouldn’t have taken a genius to point out why Hitler ice-cream was a bad idea, but even global superbrands like Starbucks and Nike could have avoided some bad press if they had involved more people in their decision-making process.
4. Unique workplace cultures are your greatest and most hidden asset.
Workplace culture plays a huge, though often hidden role in driving profitability for any organization. When companies are known for unique, diverse, and inclusive cultures, it results in higher retention rates, greater engagement, attracting top talent, and, as we’ve mentioned, profitability. So what accounts for an unique company culture? Despite all the aspirational things that often receive credit, ultimately, it comes down to three things: compelling purpose, targeted mission, and paycheck (in that order). The wider the range of contributing factors (including, of course, diversity) to an organization, the more encompassing and inclusive its culture becomes. This stronger culture, in turn, drives stronger financial results.
5. Forget the rest and just look at the numbers.
Ultimately, no one has to even believe in points one through four above—just look at the hard numbers. DEI initiatives, programs, positions, and directives are more than just a collection of mantras by social justice warriors—DEI is a business imperative. Established institutions that study organizational profitability and function have repeatedly gone on record to report diversity results in bottom-line profitability. Seriously, don’t just take it from us—read Forbes, Harvard Business Review, Financial Times, McKinsey, and countless others. The proof is in multiple puddings—pick your flavor.