The Business Case for Diversity: What Does It Mean To Your Organization?

VOTE – Early or on November 6, but VOTE!I’ve been hearing about the business case for diversity for at least twenty years now. It has been used so frequently to justify corporate diversity and inclusion initiatives that the phrase is now trite. Most managers can rattle the words off glibly, but few are able to explain them, and even fewer are able to apply the concept to their own organizations.

1.      So, what does the “business case for diversity” mean?

In essence, the “business case for diversity” refers to attempts to move beyond mere legal compliance with EEO and affirmative action laws. The theory is that in today’s global economy, there is value in the diversity of thought and perspective that employees from a wide range of cultures can bring to a business. Those companies that employ a more diverse workforce should be able to deal more successfully with their increasingly diverse customers. More diverse companies, then, should achieve better business results – higher sales and profits and a stronger corporate reputation.

Note that while I am articulating the business case in terms of the goals of a for-profit company, the theory should hold true in non-profits, educational, and government enterprises as well. Wherever an organization’s success can be defined, diversity should improve it, according to the “business case for diversity.”

Understanding what the business case for diversity means is the first step. The next step is to understand what it means for all businesses, and the final step is to understand what it means uniquely for your business.

Unless managers can find value to their organization in diversity, the phrase will continue to be trite and meaningless. It will not drive action.

2.      What are the alleged universal benefits of a business case for diversity?

Here are some of the frequently cited benefits of diversity:

  • Easier recruiting and access to a wider employee base, because the company becomes an employer of choice
  • Increased engagement among a more diverse employee base, leading to higher productivity
  • Better decision-making and creativity, because more perspectives are brought to a problem
  • Improved employee retention
  • Improved corporate and brand reputation

These advantages apply regardless of your business. Which are more important to you depends on your business. For example, if you can easily hire employees, increased retention may not matter to you as much as if your business struggles to keep jobs filled.

Which of these benefits will you emphasize in your business case for diversity, and why? Be sure you can articulate the reasons for your emphasis.

3.      How do you make the business case for diversity uniquely in your organization?

Examples of some of the more individualized aspects of diversity could include

  •  Appealing to the growing diversity in your consumer base, potentially giving you an advantage in product development and marketing, and ultimately in sales and market share
  • Obtaining a more global perspective on your business, leading to better supply chain sourcing and lower costs and/or higher quality

MP910216391 (1)Each organization will have to articulate how diversity can help its particular strategic objectives in terms similar to the above. Moreover, leadership must seek out evidence to prove or disprove the role of diversity in their organization. As the enterprise becomes more diverse, does it experience growth and increased profitability? Is it more creative? This is important, because no initiative will take root unless its proponents can convince the organization at large that it brings success.

At the end of the day, the business case for diversity will not be successful unless leadership of an organization internalizes it and uses it to drive decisions. They must believe diversity is important and that their organization’s future depends as much on building a diverse and inclusive workforce as in building a robust supply chain and strong customer relationships. Indeed, they must believe that their diverse workforce is integral to improving the other aspects of their business model.

How far along is your organization in internalizing the business case for diversity?


POSTSCRIPT: Here are a few useful articles on the topic:

Only skin deep? Re-examining the business case for diversity: Deloitte point of view, Human Capital Australia (September 2011)

The Business Case for Diversity: How Companies Keep Their Competitive Edge, by Tammy Worth, in Texas Diversity Magazine (September 2009)

The Business Case for Diversity: Reality or Wishful Thinking?, by the Institute for Inclusion in the Legal Profession (2011)

What’s the Business Case for Diversity in the Workplace?, by Evan Apfelbaum (MIT Sloan) (February 27, 2013)


1 Comment

Filed under Diversity, Human Resources, Leadership, Management, Workplace

One response to “The Business Case for Diversity: What Does It Mean To Your Organization?

  1. Pingback: Blog on Hiatus | Sara Rickover, Behind the Corporate Veil

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