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The value of diversity

by Miki Saxon

A Creative Generalist post led me to some excellent answers from Frans Johansson on questions regarding the value and importance of managing diversity. Here is the Q&A, along with additional thoughts.

Q. What does diversity bring to a business, and how can it make money?

A. Diversity brings the possibility to leapfrog competitors. By leveraging different perspectives, a company can create “Medici Effect”, an explosion of groundbreaking ideas. A corporation must first understand the need for diversity and then how to use it. With those two pieces in place, however, it will outperform. This is ultimately reflected in shareholder value. Diversity can make money in several ways. The most fundamental is in how it drives innovation. When Volvo Cars decided to create an all-female engineering team it came up with hundreds of ideas, most of them never suggested before – and many were brilliant. In addition, diversity can help us find unique market opportunities. When the Hispanic networking group at Frito-Lay in the US (part of PepsiCo) suggested the company develop a “Guacamole Chip”, the company went for it and made $100 million in its first year of sales.

Companies must do more than “understand the need;” CEOs often must instigate fundamental cultural changes across the organization’s MAP, starting with their own. Only then can the leaders expect diversity to be accepted as the norm.

Q. Does it [diversity] mean hiring people who are not as well-qualified?

A. Hiring well-qualified people is the baseline. But diversity means we need to question our assumptions about those qualifications. When L’Oreal acquired Maybelline it changed the make-up of the company’s staff by bringing in people of different ethnicities and countries ). Many may have been traditionally “not right” for the job, but five years later Maybelline had become the number one cosmetics brand in the world – a result of innovation from diversity.

I’ve written for years on the dangers of hiring only in your comfort zone and the dangers have increased exponentially with the explosion of global workforces and products.

Q. Does it have to mean age, ethnicity, gender and sexual orientation?

A. Not necessarily but those attributes increase the chances in bringing together different perspectives. It can also mean different fields, experiences and expertise.

Those attributes also don’t guarantee diversity. For example, Dick Chaney, Clarence Thomas and Alberto Gonzales are ethnically diverse, but think in tandem.

Q. What if my occupation happens to attract a particular type, such as men, women, straight…?

A. If everyone around you is the same, you’ve got some serious problems. Every industry today is under intense pressure to innovate and change, and they should seek diversity anywhere possible. Seek out organisations that try to hire people different from yourself.

If you really believe that it’s the nature of your work that leads you to hire a particular type all the time, then it’s safe to assume that you also believe in the tooth fairy. Rationalizations aside, it’s almost a toss-up as to which is worse, mental or skills homogeny.

Q. How do I make a workplace more attractive to different types of people?

A. The first step is to ensure it is diverse to begin with. If your competitor is further along than you, get moving. To get a diverse workplace to begin with, though, you must breed openness, respect and tolerance. Only then can team members feel comfortable providing, championing and challenging ideas. In addition, you have to ensure people are evaluated more on their ideas than on how well you know them, since diverse teams tend to consist of people who may only have worked together for a short period of time. Things work pretty well when we’re all from the same backgrounds.

Openness, respect and tolerance must be embedded first in your MAP and the MAP of your managers, then in your company culture. The foundation of all three comes from your employees’ fundamental belief that the messenger won’t be killed—no matter the message or how it’s delivered. Because it’s a trust issue, recovering from a violation is more difficult than almost any other cultural stance.

Q. Wouldn’t changing the make-up mean conflict and inefficiency?

A. It’s all about leadership and management. The most important quality for a global leader is understanding how to manage diversity. That bit of extra time dwarfs in comparison to the benefits in revenue, market share or profit margin that results from the team’s composition.

To conflict and inefficiency add mental, psychic and, possibly, even physical discomfort—for you, your group and, if you’re a diversity trailblazer, the entire company. But that’s often the initial result of change, that’s why so many leaders, managers, people, often go through changes kicking and screaming all the way.

Q. Surely we’re going to have to spend more time on training?

A. We have developed a workshop which trains executives and managers to use existing diversity in their company to generate new innovations in products, services, supply chain, marketing, hiring… everywhere. With these skills, a corporation not only understands the value of diversity – it accomplishs breakthroughs because of it.

Another way to look at it is that any increased spending on diversity development is an investment and will be more than offset by the increases in innovation, productivity and revenues. If spending $100 results in a bottom line increase of $1000, did you really spend the $100, or did you gain $900? $900 that wouldn’t be there if you hadn’t invested the initial $100.

3 Responses to “The value of diversity”
  1. Business MetaBlog » Blog Archive » Translating diversity into profit Says:

    […] Rather than looking at diversity as something we have to do, Leadership Turn shows us how to embrace it and convert it into profit. […]

  2. Recommended Reading at Race in the Workplace - how diversity, multiculturalism, race and racism influence our working lives Says:

    […] The value of diversity – Leadership Turn “Q. What if my occupation happens to attract a particular type, such as men, women, straight…? A. If everyone around you is the same, you’ve got some serious problems. Every industry today is under intense pressure to innovate and change, and they should seek diversity anywhere possible. Seek out organisations that try to hire people different from yourself.” […]

  3. Is Your Team Diverse Or Just Look It? Says:

    […] after I started writing Leadership Turn I did a post about diversity, ending with […]

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