In this new environment, diversity is visible all around us. You can notice it in different designs and colours of automobiles on the road. You can see it in products at supermarkets and dishes at restaurants. You can catch it in the content on YouTube and OTT platforms. You can notice it in the models of smartphones and categories of books on Amazon. Also, you can see it in the endless list of apps on Google Play Store.
One of the main reasons behind so much diversity in products and services is the high diversity of the consumer population that wants to be treated a little differently, a little special. If brands offer them generic things, they resist purchase, but when brands offer them diverse options, they are ready to pay. For instance, the world-famous Barbie doll sales were in freefall a few years back. The part of the problem was that the doll hadn't changed much since its launch in the late 1950s. However, sales started to bounce back after falling 25 percent between 2012 and 2017. One of the key reasons for this comeback was the Barbie Fashionistas line that includes over 150 dolls, featuring a variety of skin tones, eye colours, hair colours, body types, fashions, and disabilities, including dolls with hearing aids, a prosthetic leg, on a wheelchair and so on.
Organisations must bring diverse perspectives together to offer various products and services externally. Therefore, they are hiring people from diverse backgrounds and even creating a leadership role of Chief Diversity Officer, who develops and implements diversity, equity, and inclusion (DEI) initiatives within an organisation. Let me share the meaning of these terms to set the perspective.
Also read: Make diversity and inclusion a group agenda
Diversity means to increase the representation of various populations—age, gender, education, health conditions, life stage, sexual orientation, size, mental and physical ability, socioeconomic status, language, and so on, within an organisation.
Equity means providing the same opportunities and benefits to the members of underrepresented and majority-group employees. The top leadership has to set the culture, allocate the budget to various diversity initiatives, lay out the formal policies, create a level playing field for everyone, and define measurable and meaningful outcomes.
Inclusion means providing everyone with a supportive workplace experience to feel welcomed and valued. If an organisation celebrates employees' achievements regardless of their title, tenure, and background, if employees feel comfortable sharing their perspectives, and if their views are considered, employees develop a sense of belonging to their workplace.
Now, let's look at how DEI helps organisations.
Innovation happens when different ideas and points of view come together from employees with diverse backgrounds. For example, as L’Oréal has transformed itself from a French beauty products business to a global brand, the company deploys professionals with multicultural backgrounds in new-product development. By building a diverse workforce and then harnessing their perspectives, L'Oréal has created cosmetic products that address many consumer concerns.
When people feel welcome to contribute and confident to be heard, they come up with great ideas and give their best. For instance, Swarovski, the Austrian manufacturer of precision-cut crystals, constantly reminds executives that their meetings will be more productive if attendees participate in the meetings instead of deferring to seniors.
People with diverse backgrounds and exposures often see the same problem differently and come up with multiple solutions, increasing the odds of success. In a discussion-based problem-solving environment, such as an MBA program, the diversity of participants' backgrounds contributes significantly to the learning experience as it exposes students to multiple perspectives and life experiences. Hence, beyond performance in entrance exams such as CAT and GMAT, MBA institutes focus on academic, gender, and work experience diversity in their classes.
DEI is not just about attracting talented employees from diverse backgrounds but also allows them to flourish and feel supported. For instance, apparel company Gap has received compliments for removing the pay differences between its male and female employees. Under its diversity initiative 'Brew of Balance,' Tata Starbucks offers a better referral bonus to the employees who refer women returning to careers. The company also has stores with hearing and speech impaired employees, who can access learning content in sign language and customer-facing tools such as visual menus.
According to analyses by various firms, diverse companies are more likely to outperform non-diverse companies in profitability. For example, after examining data from 300 portfolio companies, a venture capital firm—First Round Capital—learned that startup teams with at least one female founder performed 63 percent better than all-male teams. Also, according to Boston Consulting Group, businesses founded by women deliver higher revenue than those founded by men. Therefore, by creating gender-diverse management teams, companies can perform better financially.
Businesses are facing increased competition for talent due to factors like an ageing population, the 'Great Resignation', creator economy, and so on. DEI can help organisations bring positive cultural change while boosting the reputation of their employer brand. For example, founded in 2006, a German design and innovation agency IXDS is known for part-time work contracts. It attracts a diverse group of professionals who have interests outside of their day job or are in different phases of their lives. The company's clients have appreciated the creative strength of the resulting diverse workforce.
The business case for DEI is solid and transparent. The organisations that will take DEI initiatives seriously will get ahead in the future. So, DEI should be treated the same way any other strategically important business imperative would be treated.
The writer is an author of 'Booming Brands' and co-author of ‘Booming Digital Stars’. Views expressed are personal and don't necessarily represent any company's opinions.
The thoughts and opinions shared here are of the author.
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