Businesses often scout for talent, and hire candidates, based on a simple principle. The more technically qualified a candidate is for a role, and the better they fit into the company’s existing culture, the better. In the short term, this makes perfect sense. New hires who can culturally integrate into the team and their new roles with minimal effort can become productive more quickly than less qualified candidates could. In the longer term, though, businesses are forced to deal with a cost that comes with this strategy. By pursuing the path of least resistance with regard to integrating new hires, businesses sacrifice diversity.
Diversity is, in several ways, the key to any business’ long term success. The more diverse a team is, the broader the range of experience and perspectives that it can draw upon becomes. The result is a business that simply has more growth potential than one that isn’t as diverse. By developing that diversity, alongside a company culture that’s designed to take advantage of it, businesses can innovatively outclass more homogenous competitors.
Diverse businesses perform much better than competitors
A 2015 study by Mckinsey & Company found that businesses in the top quartile for gender diversity outperformed competitors by 15 per cent. The most ethnically diverse companies, for their part, outperformed other businesses by a staggering 35 per cent. A wide range of other studies over the past several decades have similarly indicated that these, as well as diversity in age and professional and socioeconomic background significantly improve performance. The critical factor isn’t a particular type of diversity, so much as diversity itself.
Diversity drives innovation
The more diverse a business becomes, the larger its range of perspectives, and its collective body of knowledge, experience, and talent grows. It can explore, experiment with, and use this to innovate new and better solutions to problems that allow them to outcompete other businesses.
For example, a business that hires two engineers who are the same age, went to the same university, and worked at the same companies together in the past will get exactly what they were hoping for: Two virtually identical professionals who will do the same kinds of jobs in the same way, who look at problems with the same perspective, and who have essentially the same skills and capabilities. They’ll work well together, but the chances of something disruptive occurring are minimal.
A company that actively pursues diversity, on the other hand, might opt for two very different engineers. While one might have a top-notch education from a prestigious school, plus a few years’ experience with a well-funded tech startup, the other might be a 50 year-old immigrant from Russia who has spent decades solving complex problems with relatively limited resources. The chances that combining their knowledge and perspectives will result in something new and potentially profitable is relatively high. Where the first business can expect seamless integration and predictable performance, the second can expect an adjustment period, followed by a highly productive exchange of ideas.
Culture is key to making diversity work for your business
It’s no secret that diversity is good for business, so it might seem odd that so many companies don’t make any significant effort to encourage it. The reason is that a diverse workforce needs to be backed up by a healthy company culture to provide any real benefit to the business.
Applying diversity to drive innovation and growth is only possible through the exchange of ideas. Different people with different backgrounds need to be exposed to each other, and need to collaborate to combine their expertise into something greater than its constituent parts. This isn’t possible with an unhealthy company culture, where workers are too stressed and too focused on protecting their personal interests to communicate or collaborate effectively with co-workers.
Building a healthy company culture
In order to develop the kind of culture in which a wide variety of people with very different personal backgrounds can cooperate, businesses need to actively cultivate a strong inclusive and collaborative mentality in their workplace. A business that wants to profit from its diversity needs to find ways to cultivate curiosity, tolerance, and a thirst for progress. That means ensuring that employees benefit from working together, and rewarding teamwork, communication, and mentoring behavior. The business’ leaders should model these values to their employees, and create policies that reinforce and structurally encourage them.
Embracing diversity, and developing a culture that is able to make the most of it, requires more work and up-front investment than hiring a homogenous, and therefore more limited team. By taking on that challenge, however, businesses make themselves more innovative and productive, boosting their ultimate growth potential.