Executives at the world’s most profitable companies agree. A 2017 Forbes Insights study found 85% of them somewhat or strongly agreed that a diverse and inclusive workforce drives innovation. Sixty-four percent of respondents to the CompTIA study also agreed that a heterogeneous employee base is more likely to produce world-class innovation than a largely homogeneous one.
“Humans are biased, whether they’re aware of it or not, and it shows in our products,” says Messdaghi.
That might help explain why companies that reported above-average diversity on their management teams also reported innovation revenue that was 19% higher than that of companies with below-average leadership diversity, according to a 2017 study by Boston Consulting Group.
Revenue: Make It Rain
In the channel, sales often depend on who you know and who knows you.
"By having a diverse workforce, you’re introducing your company to other markets,” says Carnegie. At the same time, your sales team is meeting more and more women and people of color in decision-making roles who happily notice a salesperson who looks or seems more like them, he notes.
There’s also hard data to add to these less tangible effects. Consider this:
- Companies with the highest gender diversity are 15% more likely to beat their industry’s national average financial performance, according to a 2015 McKinsey study.
- Companies with the highest racial and ethnic diversity are 35% more likely to beat their industry’s national average financial performance, according to that same study.
- Going from zero women in C-suite and board positions to 30% female translates to 15% greater profitability, according to a study by the Peterson Institute for International Economics, reported by the Harvard Business Review.
On the other hand, lack of diversity has hidden costs. Carnegie, who is Black, says people look closely at the staff images on the websites of companies they consider doing business with. For many non-white people, an all-white team page may be a turn-off, and a signal that they or their business might not be welcome.