For people who don’t think about it often, when they do consider why diversity is important, they often struggle for a practical answer. As a society, culture, and system of laws, we have mandated diversity’s legal and social importance, but we don’t give enough time or energy to the practical importance of diversity.
First, let’s define diversity:
“showing a great deal of variety; very different.”
In the context of business, it’s hiring lots of very different kinds of people to attempt a representative mix of the general population.
Diversity is also the encouragement and fostering of diverse thinking and actions, the expression of people’s varied backgrounds.
Why is Diversity Important?
People, including the sum of their selves, knowledge, and experience, are raw ingredients for our businesses.
Consider the monoculture: a culture with one point of view, one color of skin, one sexual orientation, one gender, one religion, one education.
- having a restaurant that only serves one dish.
- running a construction company that only builds with concrete.
- writing a book using only one word, over and over again.
- operating a consulting firm with only one strategy.
There’s a very limited audience of customers who want just one uniform thing from us, over and over again.
As a marketer, can you imagine having only one product that comes in only one size, one color, one price, with only one feature? Once the novelty or utility of the product wears off, we’re out of a job.
We would never want to market these businesses.
We want to work for the restaurant that always has something new – a core competency, to be sure, but with tons of variety.
We want to work for a construction company that does breathtaking work in a huge variety of forms, that could build a hut, a temple, and a skyscraper.
We want to market books of every kind. Jeff Bezos, CEO of Amazon, built his company on the reputation of selling every book available because shelf space wasn’t a limiting factor.
We want to sell a consulting firm that has custom, bespoke strategies for every kind of business and every unique problem.
The Importance of Diversity
The importance of diversity is that if our ingredients – the people we hire and the ideas we encourage – are stale and monotonous, our business will be stale and monotonous – and our competitors will crush us.
Ignoring for a moment the legal implications of discrimination, we set ourselves up to fail when we don’t mandate diversity. The competitor with more diversity has a wider variety of ideas and talent to choose from, which means they’re capable of better products and services, which in turn drives greater financial performance.
Research by McKinsey & Company bears this out. In 2017, they examined the gender and ethnic diversity of the top and bottom performing public companies:
Companies with the greatest gender diversity financially outperformed the companies with the least gender diversity by 21%. For ethnic diversity, that number is 33%.
The difference between winners and losers due to diversity isn’t a tiny piece of a percentage. 21% and 33% are massive gaps, the difference between being the market leader and closing the doors.
Whether we’re an employee, a manager, or a shareholder of any company, we must demand diversity from our business leaders. Not only is it the legal, ethical, and moral choice, it’s the smart business choice for maximizing growth.
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