The Value of Diversity to an Organization’s Results

Diversity is crucial to an organization’s growth, strength, and ability to innovate. There are other very good arguments for diversity (social justice, for instance), too, but let’s focus for the moment just on business outcomes.

Diverse teams and organizations outperform teams with less diversity. 

During my time as the CEO of Nielsen, we set out to answer an important question: Do diverse teams and organizations outperform teams with less diversity? We were a company of 45K employees and over $6b in annual revenues. That big company, though, was comprised of many different business units. Some had better financial performance than others. Some were stronger than others (e.g., better operational excellence, strategic clarity, employee engagement). Some were innovating better than others. We listed and ranked them on all of those key metrics. Then we added measures of diversity:  the diversity of the leadership team, the diversity of the overall organization. 

When we analyzed the data, what did we find? The more diverse the leadership team, the better the growth, strength, and innovation of the business unit. As the CEO, I then started to ask the units with less diversity, “Why are you not taking full advantage of this to improve your results?” 

Are there pluses and minuses to having a more diverse leadership team? Yes, sometimes, at least in the short run. Having a group of people with similar backgrounds and worldviews might initially result in easier group cohesion, easier communication, and faster decision making. In short, it might be more efficient. But as desirable as efficiency is, in the long run, it has to be balanced with the crucial activity of innovation, and innovation is inherently inefficient. Diversity is especially important to innovation. And innovation is a key determinant of long-term viability. Beth Comstock, former marketing leader at GE, says it well:  “If you want innovation, then you want diversity…period.”

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Recently, while on vacation with my wife in Hawaii, we visited the Hawaii Aquarium in Maui. One of the exhibits said about one-fifth to one-quarter of the plants and animals on the islands of Hawaii were unique to Hawaii. This is a relatively large proportion in comparison to other places on Earth. Why? Hawaii is one of the most isolated places on Earth in terms of its distance from other land. So it’s harder for plants or animals to move or migrate to Hawaii over time. Nature evidently saw that as a void to be filled, and fill it she did, such is the importance of diversity to the long-term viability of the ecosystem.

Published by Mitch Barns

https://www.linkedin.com/in/mitch-barns/

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