Diversity and independence are important because the best collective decisions are the product of disagreement and contest, not consensus and compromise” – James Surowiecki in “The Wisdom of Crowds”.
Diversity is a recurring theme in many large corporate organisations. However, it remains largely unappreciated relative to other social concepts. This article highlights four perspectives of diversity.
Reality
Diversity is a reality of nature, business and life. When companies are seeking to employ people, they cannot successfully identify homogenous groups to bring on board. The reality of human nature guarantees that companies and institutions will be diverse. Unfolding developments across the globe are adding new realities such as gender and sexuality to the concept of diversity.
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Anthropological research consistently demonstrates that human classifications of the world hardly match environmental realities. Homogeneity factors such as genealogies and nationalities which people focus on bear overlaps and invisible cracks. Employers have to deal with these realities to various extents depending on where they are located. The realities have to be accepted and productively applied.
Humanity
Humanity and diversity operate with a neat hand in glove arrangement. People, nations, tribes, languages, personalities and abilities all guide the functioning of man on earth. Diversity is expressed in the uniqueness of each individual through DNA, genetics and biometrics all of which prove the diversity of humanity. Before DNA tests were invented, criminal investigations and paternity disputes were more difficult to resolve. The diversity of DNA put a stop to that.
There are more than 6,900 living languages all over the world – further evidence of human diversity. Nations like Nigeria and Russia have hundreds of tribes. Global population is estimated to reach 9 billion by 2040. Although birth rates are decreasing in some countries, others are exceeding expectations and do not apply deliberate birth control measures. Diversity is increasing as human numbers are growing.
Individuals and organisations should acknowledge diversity as a component of humanity.
Practicality
Diversity is not just a reality. It also has practical benefits for mankind. The diversity of skills, abilities, climates, vegetation and resources not only enables international trade and tourism, it fuels global competition and innovation.Companies can look for different types of skilled employees to fill their vacancies and perform functions. Education would be of less value without its diversity of subjects and teachers. Homogeneity has its advantages but teams are known to operate more successfully by bringing on diversity.
Insights from Simon Hartley’s “Stronger Together” suggest that in spite of distinct and diverse roles, strong teams possess total appreciation of each individual. They also draw strength from their differences. Within organisations, a basic rule of controls is separation of duties. This can only be achieved by having individuals with different skill sets and competencies.
As the opening quote of this article indicates the best collective decisions are sharpened by disagreement and contest. James Surowiecki avers that intelligent groups do not ask members to modify their positions to let the group reach a decision everyone can be happy with. Instead, they apply mechanisms to gather collective judgements representing what they all think. Bill Conaty and Ram Charan in “The Talent Masters” prescribe one of the principles of building talent as meritocracy through differentiation. In this regard, they provide a slogan: “Differentiation breeds meritocracy; sameness (the failure to differentiate people) breeds mediocrity.” The direct implication of this slogan is that diversity breeds meritocracy.
Diversity bears practical value which we should productively utilise.
Profit and Loss
Now we come to the leading question for every profit and even non-profit organisation. What is the bottom line outcome of diversity? Let us derive answers from research results. Research by McKinsey has shown that diverse workforces have higher rates of productivity, retention, collaboration and commitment. Deloitte identified an 80% improvement in business performance with high levels of diversity and inclusion. A global study by The Peterson Institute discovered that 30% female representation on boards can increase net profits by 6%.
We can also take a cue from modern business models with embedded diversity. Consider Uber, a taxi company with no taxis but many cars and drivers. Airbnb, an accommodation provider that owns no real estate but is not short of spaces. Facebook, a media business that creates no content but has billions of content developers. Netflix, the world’s largest movie house which does not own cinemas.
Business history especially in financial services directs us to the impact of weak diversity in decision making. The Barings Bank collapse was partly attributable to the absence of diversity in trading decisions as one man controlled everything. Bureaucratic silos within large banks contributed to the 2008 global financial crisis. BP lack of connective diversity prevented valuable messages from being passed across to prevent a massive oil spill. The CIA and other intelligence services did not apply collaborative diversity which could have foreseen the threat of al Qaeda in 2001. The list is longer but space will not permit the many failures in applying diversity that led to losses.
Diversity improves profitability and prevents losses. Get on board with it!
Weyinmi Jemide
