Racial and ethnic diversity has always been America’s greatest asset! Diversity is a necessary precondition to our democracy and has provided the impetus for engagement in the full kaleidoscope of “American culture”. This educational blog is a third in the series: Is Diversity Really Needed?
Diversity in business and commerce: In today’s globalizing, fast-changing, highly-competitive and networked world, the capacity to turn diversity to one’s advantage is critical and necessary. It is not just a nice thing to do for racial and ethnic minorities; it is a must. As the world evolves dramatically, cultural, ethnic and racial immersion has become a widespread organizational imperative – from Google to IBM.
Research shows that diversity usually trumps familiarity, insularity and ability. Diverse teams are much better at problem-seeking and problem-solving. They bring different cognitive, intellectual and experiential tool kits and ways of approaching a problem to the table. Diverse teams see customers, products, and market opportunities in creative, new and unforeseen ways.
A recent report entitled, “Innovation, Diversity, and Market Growth” found that when teams have one or more members who represent the gender, ethnicity, culture, generation, or sexual orientation of the team’s target end user, the team is as much as 158 percent more likely to clearly understand that target subject. This difference significantly increases the team’s likelihood of creating successful programs or products for their target subject.
The American Sociological Association has demonstrated that in organizations with diverse teams there is a 9% rise in sales revenue and significant increase in business performance. In contrast, monolithic and homogeneous thought within a group makes a cohesive team, but one that will happily and repeatedly agree on the same mistake as the rest of world evolves.
A McKinsey & Company research report revealed that of 366 public companies analyzed, those in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above national industry medians. In the United States, there is a linear relationship between racial and ethnic diversity and better financial performance: for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8 percent.
Racial and ethnic diversity increasing the bottom line? It’s not just a good idea, its good for business.
Dr. Paul Reginald Lowe, founder and managing director of Pinnacle Educational Center Admissions Advisors Group, provides comprehensive counseling advice, exclusively for admissions to top private schools; Ivy League and highly-selective colleges/universities; BS/MD programs; graduate and medical schools and top visual and performing arts programs. He also specializes in helping students who have been wait-listed, deferred or rejected gain admission into their top-choice schools.