What is the business case for diversity?
Evidence continues to pile up about the benefits of diversity. We know that today’s leading teams need balanced representation from all groups. To name a recent few:
- Diverse teams are smarter and are more innovative problem solvers. A dean of Columbia Business School enumerated findings of several landmark studies showing the benefits of diversity. When we are around people who are different from us, we think differently and in more creative ways, and that we work harder. Researchers found that when a team’s objective has to do with innovation, diversity is especially critical to success.
- Diverse teams return a stronger bottom line. Business professors out of the University of Maryland and Columbia University studied the effect of gender diversity on top firms’ performance and found that “female representation in top management leads to an increase of $42 million in firm value” and that racial diversity delivers similar benefits.
- Diverse teams deliver a better product. Robin Hauser Reynolds offers an anecdote of the earliest airbags designed by an all-male team with an exclusively male form in mind, which were fatal to women and children.
- World economies perform better when they employ a more diverse workforce. Economists point to the lack of women in the workforce as a main reason Japan’s sluggish economy has averaged less than 1% growth in the last two decades. In the words of former investment banker Mikiko Fujiwara, “Japan is using only half its population, so how can it compete internationally?”
- Corporate entities are more socially conscious and give back to their communities when they have a diverse leadership.
- Diverse groups outperform groups made up of of the smartest individuals. Research by economists from the University of Michigan and Loyola University showed mathematically that diversity can trump ability when it comes to problem solving tasks. The reason: diverse groups got stuck less often than groups made up of the smartest individuals, who tended to think similarly.
How is my company’s diversity data shaping up against the rest?
Our industry has a lot of work to do when it comes to hiring for diversity. Understand how your company compares with others and spread the word when you find strategies that work! Here is a great one-stop resource that aggregates the diversity numbers from tech leaders; also see this valuable summary of diversity in tech companies. This list, maintained by engineer Tracy Chou, provides data for over 200 companies. You can add your company’s data and track industry progress!