Part 11 of the “Leading Through Digital Transformation” series
Diversity and inclusion are no longer “nice to have” cultural topics – or issues companies address only to avoid being accused of discrimination or to be legally compliant. Instead, they are a critical part of the new paradigm of doing business in a global, increasingly diverse world. In fact, numerous studies have shown a direct connection between diversity and the bottom line of the workplace – with some showing as much as a two-fold increase in financial performance.
However, it seems that small and midsize businesses (SMB) are not taking full advantage of the potential diversity offers, according to Oxford Economics’ recently released report “Leaders 2020: The Next-Generation Executive – Leadership Matters for SMBs.” Although 51% of executives have increasingly diversified their workforce over the past three years, and 41% recognize the value diversity brings to their workplace culture, only 25% believe that such initiatives are impacting their firm’s financial performance.
How to turn diversity into a revenue-generating opportunity
So, how do we show that diversity is more than just a cultural issue? How do we demonstrate the impact reducing bias has on a business? Through digital technology, SMBs can nurture an inclusive culture that drives employee engagement (and increases retention), creates more responsive customer and partner experiences, and increases innovation – all essential elements of business growth and profitability.
1. Employee processes that focus on talent and skill, not bias
One of the most common reasons for ineffectual diversity programs is bias – both conscious and unconscious. For example, studies have found that resumes from people with ethnic-sounding names had much lower call-back rates than candidates with more traditional names. And not surprisingly, other studies still indicate that men have a better advantage over women, even if there is no difference in skill and education.
Technologies such as artificial intelligence and gamification in the form of mobile apps and subscription-based cloud solutions, can help employers recruit and onboard new hires in a bias-neutral manner. By looking past the traditional resume, SMBs can review a candidate’s intellectual, social, and emotional characteristics first. Evaluating candidates based on these traits allows hiring managers and recruiters to avoid the preconceived notions of gender, education, race, socio-economic lifestyles. More important, this same capability can be extended to performance reviews, succession planning, and other employee interactions and processes.
2. A workforce as diverse as the customer base
Engaging with customers across time zones, cultures, and languages is no longer uncommon for SMBs, thanks to today’s digital economy. While these opportunities help sell more products and services, they also add a level of complexity for less-diverse firms.
Companies with a workforce that represent a wide spectrum of backgrounds are better equipped to engage, service, and build relationships with customers – no matter who they are. Customers that share the ethnicity with a salesperson or service representative, for instance, are more likely to have a better perception of that company…which helps build the brand. Plus, marketers who are knowledgeable about a specific region or culture may have better success getting customer attention and building a loyal following.
3. Innovation inspired by new ideas without bias
A successful launch of new products and services requires innovation – and a diverse, bias-free workforce has the freedom and ability to look at every aspect of the business from a variety of viewpoints. Through more “intentional inclusion,” teams that include a mix of gender, ethnicity, background, history, identity, and other factors can spark breakthrough thinking that may lead to a new offering or approach that drives customer interest, increases the value of a partnership, and positively impacts the bottom line.
Fostering an environment for bias-free innovation can be as simple as giving every team member equal time to share ideas and have their voices heard. Another option is to leverage formal approaches – such as hackathons, social collaboration platforms, think tanks, and prototyping events – to boost creativity.
Diversity: Bridging the gap between strategy and growth
While building a diverse workforce can be a challenge for many SMBs, it is important. To realize the true potential of diversity, firms must think beyond issues like race and gender to assess each employee’s value and potential. As organizations use technology to become more intelligent – and drive bias out of business – they increase their ability to reach out to a wider array of employees . . . and that opens the door to improved financial performance.
To learn how your business can better prepare for the digital economy, check out Oxford Economics’ recent report “Leaders 2020: The Next-Generation Executive – Leadership Matters for SMBs.” Be sure to check every Wednesday for new installments to our blog series “Leading Through Digital Transformation,” to explore the various leadership roles in today’s growing small and midsize companies.