Diversity has always been essential to the culture and success of any organization. Not only does it promote difference and authenticity amongst its employees, but it allows for greater collaboration between unique minds, experiences, and values. Unfortunately, however, our organizations and their relative leadership teams aren’t always representative of the world we live in and for that reason, they may remain stagnant and struggle for growth.
However, by hiring a more diverse set of employees everywhere from the C-Suite down to the entry-level positions, you give your organization the opportunity to thrive beyond belief. In the following sections, you will learn about the importance of diversity in your organization’s executive leadership.
Why the Lack of Diversity is a Problem
In recent years, the need for diversity has become incredibly prevalent within leadership teams. In particular, women and racially diverse individuals are severely underrepresented in executive positions and those that lead to high-level positions. According to the Stanford Graduate School of Business, both women and people of color hold less than 10% of C-Suite positions in Fortune 500 companies—allowing the majority of representation to come from white males. This is incredibly problematic as our world and workplaces change because it only allows for one specific set of perspectives to be considered and heard.
Whether it’s race, ethnicity, gender, sexual orientation, age, religion, or economic class, we tend to think like those who identify similarly to us. So, for organizations filled with only one type of person, you run the risk of limiting your ideas, projects, and reach to different audiences. Over time this can certainly cause issues with self-awareness and tough conversations in leadership because you are now dealing with group think throughout your team—which can become detrimental to any organization’s growth.
While these demographics don’t necessarily define who we are, they certainly shape the way we see and experience the world. As leaders, it becomes important to attach value to those voices and opinions that differ from your own and choose to embrace them because they likely present ideas and information that you may not have been able to. leverage each employee’s uniqueness. Likely present unique perspectives that you may not have previously leveraged.
Setting an Example
One of the biggest reasons for implementing diversity in your organization’s C-suite would be, “practicing what you preach.” In 2021, in particular, it has become incredibly common for companies to issue statements against the inequities in our society. However, it is very rare that you see any change in that organization to actually support their claims. By showcasing your commitment to diversity directly through your leadership, you can certainly set an example for the rest of your company as to what the future holds.
Diversity for Recruiting
Naturally, this can also become a great recruiting tool as well. Companies that establish diversity in their C-suite show prospective talent they are to take action for initiatives and goals of the company. But they also drive more diverse employees to the company because there is more representation in the company. Especially as companies begin to hire more Gen Z employees, it is important to recognize that they are the most racially and ethnically diverse generation yet, so showing them that they are welcomed and valued no matter their demographic can be very impactful when bringing in top talent.
Increase in Productivity
Statistically, one of the largest benefits to increasing diversity in your company’s C-suite and general team is the increase in productivity and potential revenue for the company. In fact, companies with diverse leadership have produced 19% higher revenue than those without it and have a significantly higher chance of capturing new portions of their relative market share. If nothing else, this should showcase the effectiveness of diversity and how much our leadership impacts the overall success of our company.
Just this small addition of diversity can also trickle down to the productivity of individual employees as well. According to the Academy of Management Journal, a simple 1% increase in racial diversity with the management of a Fortune 500 tech firm allowed for nearly a $1,600 increase in productivity for each individual employee. This is a remarkable statistic to keep in mind because while it only represents one form of diversity, it shows the magnitude of impact that diversity can have on the minds and actions of our employees.
Companies to Model After
As the benefits of a diverse C-suite become more prevalent, we see more and more companies make efforts towards expanding their team with a more diverse set of perspectives. So for any company with diversity as a goal, it’s important to keep in mind some companies who have experienced success and use their stories and strategies to inspire your own.
For example, Gopuff, a modern food delivery service, was originally founded by two young men of different cultural backgrounds. One co-founder in particular, Yakir Gola, is a first-generation American after his parents immigrated from Israel 40 years ago. As you can imagine, Gola was raised within a culture that is quite different from many Americans; however, it gave him a very unique point of view that many didn’t have in corporate America. Alongside his partner Rafael Ilishayev, Gola was able to build the company and leadership team to ultimate success in just eight years. Today, Gola and Ilishayev have expanded their leadership team to 10+ individuals ranging in age, gender, and racial background which arguably, may be one of the contributors to their quick success.
When it comes to gender diversity in particular, CDW, a technology provider for businesses, has a pretty even split in gender within the executive team. Six of the thirteen top executives are women, not to mention their CEO, Christine Leahy. Leahy has been with the company since 2002 and although she comes from a more traditional American background, she, like Gola and Ilishayev, is working alongside those of very different backgrounds and perspectives. This combination of differences in gender, race, and other demographics within their team is likely contributing to the company’s continued success.
Tackling the world of diversity can be a challenge for any organization no matter the industry. However, as a world changes, grows, and evolves diversity is becoming a necessary part of that change and to run a successful company in the future, it is something that needs to be put in place.