Want to Double Your Business’ Cash Flow? Practice Diversity and Inclusionand Really Mean It
Fostering diversity in the workplace isn’t just the right thing to doit’s a pathway to profitability by Bill Proudman
A two-year analysis completed in 2015 evaluated over 450 companieseach with over $750 million in annual revenueagainst a criteria of 128 different talent management practices, and determined that 70% scored poorly when it came to diversity and inclusion.
Companies that scored in the upper echelons took effective diversity measures not only in Human Resources, but across the boards. Even more revealing is that those same companies experienced a 2.3X higher cash flow per employee over a three-year period, while the smaller companies averaged 13X higher.(1)
The more diversified your workforce is, the more profitable your organization will be. With different backgrounds comes different ways of thinking and different opinions, which in turn leads to a more holistic overview of a situation.
The work is highlighted by research that further demonstrates that diversity initiatives can pay off markedly in a company’s economic growth. One such study found that gender-diverse companies are 15% more likely to outperform their peers, while ethnically-diverse companies scored a full 35%.(2)
The Harvard Business Review reported that companies that conscientiously implement diversity programs based on applicants’ and employees’ “inherent” and “acquired” traits are 45% more likely to experience growth and 70% more likely to capture a new market.(3)
Before dismissing the data as “a bunch of numbers,” one must take a sober look at why and how diversity generates greater market share. Let me point out that a truly diverse and inclusive workforce could be compared to a diverse community. In a fully diverse community, you get multiple viewpoints, kinetic interaction, unique ways of deconstructing problems, healthy friction, and debate. True diversity cultivates innovation.
As I pointed out, leaders must look beneath the glossy surface. Silicon Valley, despite its cutting-edge reputation, has taken a hit due to rampant ageism. San Francisco, often looked upon as a hub of diversity, now has the fastest-growing income inequality gap in the country, on par with the country of Rwanda.
Companies that embrace diversity in all its facets end up being catalysts for change and looked upon as leaders. At American Express, for example, 40% of their worldwide workforce is part of employee resource groups (ERGs) such as Women’s Interest Network (WIN), Veterans Employee Team (VET), Black Employee Network (BEN), as well as groups for parents, LGBT, and many others.(4)
Diversity consulting work with Fortune 500 leaders, civil rights advocacy groups, ERGs and others to bring about real transformation, innovation and prosperityall things our world desperately needs right now.
Bill Proudman, co-founder of diversity consulting firm White Men As Full Diversity Partners (wmfdp.com/) (WMFDP), makes a point that challenging leaders to eliminate bias within an organization yields positive results in profitability. Bill, along with his partners, Michael Welp and Jo Ann Morris, founded WMFDP in 1997 to focus on the often ignored white male corporate leadership demographic and get them through their “blissful cluelessness” and into dialogue and proactive remediation of workplace bias based on gender, race, religion and sexual orientation.