Why Diverse Companies Outperform Their Peers

When it comes to building an effective workforce in the public sector, diversity trumps many other factors that play into the equation. That’s why diverse companies have been proven to outperform their peers—as reported by [email protected], UNC Kenan-Flagler Business School’s online MBA program, and UNC Executive Development in a summary of recent data related to executive learning. Here, we’ll take look at a few of the key findings, as well as what public sector experts say about the importance of diversity in creating organizational success.

Diversity Benefits Organizational Performance

Multiple studies have shown that organizations that embrace racial, ethnic and gender diversity share common attributes that support organizational performance. Results link diversity to company success due to the different perspectives that are available, building organizations that are:

  • More innovative
  • More creative
  • Faster to market
  • More profitable

In fact, ethnically diverse companies outperform their peers by 35 percent and gender diverse companies are 15 percent more likely to experience similar results. The [email protected] publication notes that in a Forbes Insights survey of 321 executives with direct responsibility or oversight of their companies’ diversity and inclusion programs, 56 percent of those with more than $10 billion in annual revenues cited diversity as a key driver of innovation.

In addition, organizations need to recognize not only the benefits of a diverse workforce—but that it’s what the future will hold. In 10 years, 75 percent of the workforce will be made up of millennials. As the most diverse generation in the multigenerational workforce, millennials will redefine diversity in the workplace in coming years. Organizations that recognize the benefits of diversity and learn how to tap into its potential now will be positioned to optimize these evolving workforce dynamics.

Beyond Numbers: Inclusion is the Key

A recent PA Times article notes the need to move beyond ensuring that a workplace has a diverse population—to ensuring that organizational culture includes its diverse workforce in the decision-making process to optimize the potential for growth. “If a diverse organization promotes assimilation over inclusion, then all the organization will accomplish is a groupthink mentality.” Author Dan Krejci recommends a few important strategies to overcome this pitfall:

  • Address “cultural lag”—which is a dynamic sociologists describe as occurring when one part of the culture doesn’t keep up with the rest.
  • Adopt diversity comprehensively—both in terms of personnel in the organization, as well as inclusion in the organizational decision-making process.
  • Recognize the inherent role of social equity—as a foundation of public administration, along with “efficiency, effectiveness and a sense of ethics.”

Fostering Diversity in the Public Sector

Despite progress, there are still too many organizational cultures in which diversity is not fully embraced in order to benefit individuals, enterprise and society as a whole. As noted by Govloop featured blogger, David Grinberg, the federal government is no exception:

“Despite building the most diverse workforce in America for an organization of its size, Uncle Sam still faces some glaring problems. There are still too many glass ceilings, sticky floors and clogged pipelines, so to speak. This unjustly holds back talented public servants from reaching their full potential based on merit.”

To overcome these less-than-optimal dynamics, Grinberg recommends five steps that are specific to the public sector:

  1. Closely collaborate with OPM—to better leverage diversity and inclusion best practices.
  2. Partner more closely with EEOC—to receive necessary education, technical assistance and training.
  3. Display more leadership from the top—with agency heads clearly communicating diversity priorities.
  4. Increase mentoring of women, minorities and people with disabilities—to improve retention and advancement.
  5. Don’t discriminate—period! “Every individual deserves the chance to compete and advance on a fair and level playing field without discriminatory barriers.”

Many predict that diversity and inclusion will be a top priority in 2016 for companies around the world. With the ability to outperform their peers linked to the extent to which diversity is embraced—such predictions bode well for a more diverse and inclusive workforce in the years ahead.


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