According to “How Diversity Makes Us Smarter,” a recent article in Scientific American by Katherine W. Phillips, decades of research shows that the more gender and racial diversity an organization has in top management, the more successful the organization is. Some of the research Phillips quotes was conducted by business professors Cristian Deszö of the University of Maryland and David Ross of Columbia University who studied the effect of gender diversity on the top firms in Standard & Poor’s Composite 1500 list. “In their words,” writes Philips, “they found that, on average, ‘female representation in top management leads to an increase of $42 million in firm value.’”
Phillips also cites a study on racial diversity in corporate leadership conducted by Orlando Richard, a professor of management at the University of Texas at Dallas, and another conducted by a team of researchers at the Credit Suisse Research Institute, who studied the relationship between gender diversity on corporate management boards and financial performance.
But even today we find a number of troubling facts that are systemic in a large number of organizations:
- Customers and workforces may be more diverse than ever before, but statistics show C-suite representation continues to be dominated by white males
- Women are opting out of senior leadership at a clear and predictable rate
- Underrepresented groups are not getting promotions or being included on strategic imperatives. And this hurts business because diverse marketplaces require diverse strategy
The cost to organizations whose employees feel excluded has a larger impact on turnover and productivity than more obvious problems like harassment. New research also makes the case increasingly clear that companies with more diverse workforces perform better financially.
And just because many organizations know that they must be more inclusive doesn’t actually make them more inclusive. Good intentions are not enough. For leaders and organizations to be inclusive in ways that will have a positive and lasting impact on the bottom line, deeper understanding of unconscious bias, intersectionality, and the subtle and not-so-subtle micro-inequites in our society is also required.
And that’s what we do best.
So, let’s get started. First, take our inclusive leadership quiz and find out how inclusive you are as a leader.
And stay tuned for future blog posts that will help you be a more inclusive (and more successful) leader.