Buzz words surrounding the importance of diversity in hiring and company culture have been with us for some time. So much so in fact that it can often seem as if any new mentions of them are “jumping on the bandwagon” and subject to claims of inauthenticity of motive or “social justice-warrioring.” Hard data on the benefits of diversity has been sparse,more often driven by perception, gut feeling, and/or “feel good” motivators. While doing the right thing is in itself an important component to driving company culture, it helps when a company can point to quantitative data to support bold initiatives. If you’ve been weighing the decision to prioritize enhancing diversity at your company, Harvard Business Review (“HBR”) just made that decision much easier. As of the publishing of the July/August 2018 issue, HBR’s research allows us to decisively assert that increased diversity in a company leads directly to improved financial performance.
Studying the performance of venture capital teams, HBR research proved that the successes stemming from post-investment strategy and decision-making had a direct correlation to the amount of diversity in the teams. While the VC world has historically struggled to break free of natural inclinations to build teams with an ingrained bias toward homogeneity, HBR’s study proved that diverse collaborators were more prepared to tackle ever-present challenges with creative thinking and agile strategy. Diverse teams saw higher rates of success, greater overall fund returns, and significant increases in profitable exits.
Translating HBR’s Findings to Hiring Across Industries
While HBR’s study focused primarily on the VC world, its findings can be translated for use across most companies. With an end goal of improving everything from company culture to overall productivity and profitability, ensuring that diversity is present at all levels of the company should be a driving component of your talent strategy. This can take many forms but the first step is simply ensuring intention is in place.
Once you’ve confirmed intention to prioritize diversity, opportunities to establish processes and procedures to improve and protect your diversity initiatives are plentiful but require planning, attention, and experience. Hiring practices can include blind reviews, greater emphasis on side-by-side comparisons, and partnering with experts to identify opportunities. Diversity initiatives are part of an overall talent strategy that should ultimately be customized to every company’s unique talent strategy, talent acquisition, and talent optimization needs.
For more on the findings from HBR’s study, visit https://hbr.org/2018/07/the-other-diversity-dividend. For more from BSG on understanding diversity in the greater context of talent strategy, sign up for alerts as new information is published. For help improving your team through diversity initiatives, contact us today about your next executive placement.