McKinsey’s recently published delivering growth through diversity shouldn’t surprise anyone. According to their findings:
Gender, ethnic, and cultural diversity, particularly within executive teams, continue to be correlated to financial performance across multiple countries worldwide. In our 2015 report, our hypotheses about what drives this correlation were that more diverse companies are better able to attract top talent; to improve their customer orientation, employee satisfaction, and decision making; and to secure their license to operate—all of which we believe continue to be relevant.
Apparently gender is particularly impactful at the executive level, with top-quartile organisations 21% more likely to outperform fourth-quartile ones on EBIT margin, and 27% more likely to ourperform on longer-term value.
However, I was surprised to see an even bigger impact coming from ethnic and cultural diversity. Companies with the most culturally diverse teams are 33% more likely to outperform their peers on profitability.
This highlights the risks around paying lip service to simple measures of Diversity. Many organisations have introduced targets around the number of people in a certain category (women, ethnic minorities) to measure improvements in diversity. Good step, to be sure, but nowhere near enough. Real diversity is about ensuring the widest possible range of experience, culture, background and points of view being represented at all levels of the organisation.
Diversity and Digital Transformation
Why is this important for Digital Transformation? When the people at the top are not digital themselves, Digital Transformation is presented as the simple launch of a website in order to reach some remote millenial-hipster audience; not as the fundamental reinvention of everything the organisation does and makes, how it works and what its role in the market and society at large is. Companies find it very hard to grasp how disruptive Digital is to the way in which they conduct themselves – their tools, their processes, the skills required. They are baffled when they lose employees who choose to work in places that provide Agile ways of working, empower individuals and provide the right tools to get really good work done.
Digital practitioners can also fail to embrace real diversity. How many Digital teams have you seen where everyone seems to be the same age, urban, fashionable, non-binary, eco-conscious and sporting an Apple Watch? True multidisciplinary teams are crucial, and harder to put together than some people think.
Open the door of your company to people from all walks of life, age, background, nationality, race, sexual inclination, physical ability and any other difference you can think about. Your company will thank you. By about 33%.