Diversity: Utilizing Our Differences for Success

In our society, although many organizations continue to grapple with issues of diversity, in a multitude of businesses, including retail, fashion, media, entertainment and sports, diversity is reflected at many levels. Still, at this time it is clear that there is still more to be done as people realize that there continues to be a lack of communication and understanding on certain levels within our society.

Everyone who participates in a common endeavor as part of a collective is simply a citizen of that collective. This of course applies to businesses. All within the collective have different experiences which contribute positively and are generally interesting and useful to others within the collective. Studies have shown that when each individual is allowed to provide their unique perspectives to the collective, when embraced, results in better than expected outcomes to solutions to problems being addressed. All would agree that beautifully harmonic music is preferable to a monotone.

Of course, there continue to exist issues of access, racism, prejudice, egalitarian treatment, etc. But this should not be for companies and businesses in the United States of America in this day and age.

Racial, ethnic, generational and cultural differences have always been America’s greatest assets! They have collectively been the glue that have made America great! Diversity was a necessary precondition to our democracy and has provided the impetus for engagement in the full kaleidoscope of “American culture”. Furthermore, it has produced an enviable position that other nations strive for in our world.

1. Diversity in business and commerce: In today’s globalizing, fast-changing, highly-competitive and networked world, the capacity to turn diversity to one’s advantage is critical and necessary. It is not just a nice thing to do for racial and ethnic minorities; it is a MUST. As the world evolves dramatically, cultural, ethnic and racial immersion has become a widespread organizational imperative – from Google to IBM.
2. Research shows that diversity usually trumps familiarity, insularity and ability. Diverse teams are much better at problem-seeking and problem-solving. They bring different cognitive, intellectual and experiential tool kits and ways of approaching a problem to the table. Diverse teams see customers, products, and market opportunities in creative, new and unforeseen ways. Even among the most well-meaning, a homogeneous team comes with a limited outlook., whereas a diverse team often yields nuanced deliberated decisions made from multiple perspectives and experiences that result in deeper and wider considerations and probable outcomes and results.
3. A report entitled, “Innovation, Diversity, and Market Growth” found that when teams have one or more members who represent the gender, ethnicity, culture, generation, or sexual orientation of the team’s target end user, the team is as much as 158 percent more likely to clearly understand that target subject. This difference significantly increases the team’s likelihood of creating successful programs or products for their target subject.
4. The American Sociological Association has demonstrated that in organizations with diverse teams there is a 9% rise in sales revenue and significant increase in business performance. In contrast, monolithic and homogeneous thought within a group makes a cohesive team, but one that will happily and repeatedly agree on the same mistake as the rest of world evolves.
5. Wall Street financial firms have recognized that in “superforecasting” (forecasting and predicting future market shifts) the wisdom and judgement of diverse teams can broaden knowledge base and focuses more on constantly updating probabilities rather than a non-diverse team that is involved in group think.
6. Former Federal Reserve Chairwoman Janet Yellen, the American Economic Association’s president, and other prominent economists have said a lack of diversity limits how the economics field analyzes issues and crafts policies that affect broad swaths of people.
7. Diversity decreases mistakes: Individuals with different backgrounds and styles approach problems differently. Research published by a MIT professor exploring past literature, found that diverse teams tend to be less susceptible to group think, which can drastically reduce the likelihood of making avoidable mistakes.
8. A 2014 study of Columbia University showed that ethnically diverse trader teams priced assets more accurately, avoided conformity, and thwarted bubbles.
9. A study by Rocio Lorenzo and Martin Reeves: “How and Where Diversity Drives Financial Performance”, in the Harvard Business Review of 1700 companies in eight countries, found that diversity among managers was associated with greater organizational innovation and profitability.
10. A McKinsey & Company research report: “Why Diversity Matters”, revealed that of 366 public companies analyzed, those in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above national industry medians. In the United States, there is a linear relationship between racial and ethnic diversity and better financial performance: for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8 percent.

Racial and ethnic differences is not just a good idea and good for society, it’s good for business. We should continue to embrace and acknowledge our differences for its importance in contributing to business, cultural and academic success that has made the United States of America the shining example that many other countries have attempted to emulate.

Dr. Paul Reginald Lowe is the managing director and lead admissions expert at Ivy League Admissions Advisors an affiliate of Pinnacle Educational Center Admissions Advisors Group network.