In recent years, right-wing politicians and commentators have attempted to turn “woke” into a dirty word. Ranting on television about the supposed perils of diversity and inclusiveness, making campaign promises to unravel protections for marginalized groups, or even passing laws to ban diversity, equity, and inclusion (DEI) programs in schools, the level of focus and attention placed on pushing back is significant. Yet despite the strident rhetoric, diversity and inclusion isn’t just an important ethical consideration: it’s good business.
Consulting firms such as Boston Consulting Group were early adopters of DEI initiatives and were some of the first to experience the benefits, with increased innovation being one of the most well-known advantages. A BCG study revealed that the diversity of a company’s workforce correlates closely with revenue generated from innovation. Among sampled firms, those with the most diverse workforces attributed 45% of their revenue to innovation, as opposed to 26% of revenue from the least diverse firms.
A study from Harvard Business Review lends further support to the business case for diversity, producing two key findings: that employees tend to self-segregate themselves into groups that share the same racial and demographic traits when collaborating with coworkers, and that at companies where teams were intentionally composed of diverse workers, investments were 11% more likely to be successful as a result of better decision making.
Diversity in leadership is also crucial to success. A series of studies conducted by McKinsey & Company showed that businesses with diverse executives were 36% more likely to report above-average profits, with the chance of outperforming increasing as businesses employed more women and minorities in leadership roles.
Despite the hue and cry raised by commentators and politicians with a vested interest in creating and exploiting new political controversies, making DEI a business focus and committing the resources needed to ensure that diverse workers are recruited, retained, and supported throughout their careers pays off in numerous ways. In an ideal world, ensuring a diverse workforce would receive attention and investment from business leaders because it is the right thing to do. However, the numbers also clearly favor diverse businesses, which provides a compelling financial incentive to continue DEI efforts as well.