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The Little-Known Diversity Factor That Can Positively Impact Your Company

June 4, 2020
Diversity & Inclusion

Diversity in the workplace is a hot topic, for good reason–and it’s not just about breaking down the “old boy’s club” mentality to create an environment where all individuals have opportunities to excel.

Research consistently shows that diverse workplaces outperform homogenous workplaces on various key performance metrics, including financial results, employee retention, employee satisfaction and team performance.

For some tangible benefits, research from sources such as McKinsey and Scientific American indicates that:

  • Organizations with diverse boards generated 53% higher returns on equity and 14% higher earnings, on average, than less diverse boards.
  • Organizations with women on the board displayed better average growth than those without.
  • US and Canadian companies with executive teams in the top quartile of ethnic diversity havea 20% higher likelihood of achieving earnings above the national median.
  • Ethnically and racially diverse teams outperform industry norms by 35%.

What makes diverse groups more effective than homogenous ones?

The most significant advantage that diverse groups enjoy is in the area of decision-making. Groups with homogenous members make decisions quicker, agree more and feel more confident in their decisions.

However, this confidence can be misleading, as it’s based on agreement within the group. On the other hand, diverse groups take longer to make decisions and may actually debate the issue at hand, but will consider more perspectives and alternatives as a result. This is why they are able to make better decisions in the end.

Are organizations actively pursuing diversity?

When polling over 300 Canadian organizations, we found that 56% of organizations are actively pursuing the power of diversity. Other studies have found that 67% of North American organizations acknowledge the importance of diversity, whether or not they are actively pursuing it. However, organizations that are not actively pursuing diversity may still have the opportunity to benefit from its real gains.

How are others achieving it?

Organizations typically pursue diversity in areas such as age, gender, ethnicity and experience. Most of these traits are highly visible and easy to measure.

Organizations pursue workplace diversity by:

  • Establishing strategic aims for the organization (e.g., identify, remove and prevent barriers restricting diversity).
  • Establishing advisory groups within the organization to promote inclusivity (e.g., create events to boost the involvement of diverse groups in the organization, or connect with diverse communities outside of the organization).

Is there an additional way to enhance diversity?

In a previous article, I wrote about considering both tangible and intangible factors within your organization. While the demographic measures that organizations currently use may seem easier to point to as examples of “diversity,” are they the only forms of diversity? What about aspects that you can’t easily discern?

While workplace diversity is traditionally reliant on demographic factors including gender, age and ethnicity, an often-overlooked aspect of diversity can be found in individual personality differences as exhibited through work styles. Organizations may experience enhanced benefits by coupling the powers of demographic diversity with diverse work styles.

Keep in mind that there will be challenges in implementing this additional aspect of diversity via personality differences and work styles. Diversity in personality starts with an investment at the leadership level. Leaders will have to understand themselves and their teams in order to harness personality differences effectively. The leader will have to welcome a variety of work styles that do not match their own. They may not understand their employees’ behaviors or choices–and their employees may not understand theirs–but the leader will need to adapt and lead accordingly.

While this may sound complex, there are proven methods for breaking down personalities and work styles in a way that can help your company expand its diversity in this realm. You likely already have team members who exhibit differences in work styles that can be beneficial.

To try this in your company, begin with a framework to help you better understand people and their work-style preferences. Identify features including whether individual employees are task-focused or people-focused, and also whether individuals tend to make plans before taking action, or tend to jump into action and figure things out as a project unfolds.

Positioning individuals with differing work styles on the same team can add another beneficial aspect of diversity in your company. For example, task-focused and people-focused individuals will likely introduce and consider different issues when confronted with a strategic business decision. That may lead to a more well-rounded discussion and inform a better overall decision.

By adding the often-overlooked aspect of work style diversity into a demographically diverse business environment, you can position your company to make better, more well-rounded decisions that enhance overall success.

By: Entrepreneurs’ Organization

Source: INC

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