Diversity as a Tool in Enhancing Profitability, Efficiency, and Quality of Decision-Making

Introduction

Until recently, workplace diversity was primarily perceived as a tool for enhancing corporate profitability. It was understood that private corporations that excelled in enhancing diversity based on race, ethnicity, and gender generally had more significant financial outcomes, particularly in terms of net income growth and return on economic equity. Yet, recent research has explored the topic further and found that diversity not only improves an institution’s financial performance but also enhances innovation and decision-making within employee groups. 

Methods and Findings

The authors indicate groups that are inclusive of individuals with diverse backgrounds generally have improved accuracy in their decision-making process. This finding builds on previous studies, which found diverse groups focus more closely on facts and are less likely to make errors when discussing them. Furthermore, diverse groups are unique in that they are more likely than homogenous groups to remain objective and challenge each other’s approaches to problem-solving. These benefits of diversity ultimately lead to improved decisions. Such groups are more likely to process information closely and arrive at conclusions that are generally more effective than homogenous peer groups. 

Beyond these benefits, diverse groups are also more effective in promoting innovation in their respective organizations. Most private companies rely on their capacity to continuously evolve their products and processes in ways that meet the needs and demands of society. Competing in an increasingly globalized economy requires organizations to maintain a culturally diverse workplace that discourages conformity. In doing so, companies and other organizations can create diverse groups that introduce innovative products and services at a rate that often surpasses homogenous entities. 

Conclusions

Enhancing the performance of organizations requires intentional efforts to promote greater diversity in their workforce. Inclusive groups are vital in improving the organization’s capacity to challenge existing norms and reject conformity. Thus, inclusivity must serve as a priority for all organizations that intend to remain competitive in an increasingly globalized economy. Failing to do so will only serve to their detriment.

These findings are provided by David Rock, the co-founder of the NeuroLeadership Institute, and Heidi Grant, the Chief Science Officer at the NeuroLeadership Institute. 

Traditional corporate diversity programs are largely ineffective. Are there more successful tools to enhance workplace diversity?

Introduction

Corporations around the world have recognized the importance of diversity and inclusion in the workforce. A diverse workforce not only strengthens productivity, creativity, employee engagement, and profits, but also helps maintain company reputation. In this article, Frank Dobbin and Alexandra Kalev examine why traditional diversity programs are not successful in increasing equality and diversity in the workplace. Most organizations use archaic strategies to enhance diversity that instead increase bias and stifle diversity. Diversity training, though usually mandatory, rarely leads to longstanding improvements in workplace culture, and is instead met with resistance from employees. Hiring tests and performance ratings, other popular tools, often contrarily escalate bias in hiring and assessment practices. Similarly, grievance-reporting systems not only are rarely used by employees to report discrimination, but underreporting is not an indicator of an inclusive work environment. 

Frank Dobbin and Alexandra Kalev are professors of sociology at Harvard University and Tel Aviv University, respectively. Dobbin studies topics including organizations, inequality, economic behavior, and public policy. Kalev’s work focuses on gender, racial and ethnic diversity in the workplace, as well as organizational restructuring. Dobbin and Kalev collaborated on developing an evidence-based approach to diversity management that has been published in The New York Times, CNN, and National Public Radio, among other platforms.

Methods and Findings

The authors investigated data across three decades from over 800 organizations in the United States and conducted interviews with line managers and executives. Dobbin and Kalev found that control-and-command policies (e.g., regulations) to prevent lawsuits and enhance diversity are largely ineffective and activate bias. Instead of policing employee and manager behavior, institutions should empower employees and managers to participate in building company culture through increasing contact among diverse groups (e.g., targeted college recruitment, mentoring programs), positive messaging around inclusiveness (e.g., seeking employees help in identifying promising employees), and encouraging social accountability in making the workplace more diverse and inclusive (e.g., corporate diversity task forces).

Conclusions

Tactics that aim to control behavior rarely, if ever, enhance diversity.  Institutions should instead focus on efforts that engage employees and managers through participation in college recruitment programs or mentoring programs. Involvement in these types of initiatives allow managers to see themselves as diversity champions and participate in being accountable to define workplace culture. Interaction and collaboration with individuals from different groups through cross-training or self-managed teams also yields positive results in reducing stereotypes or microaggressions. Finally, social accountability strategies such as participation on diversity task forces and hiring diversity managers ensure employees are committed to building an inclusive environment, while appealing to people who otherwise would not be interested in diversity projects. 

The authors report that traditional diversity practices have failed to ameliorate inequities in the workplace. Implementation of outdated strategies have made little to no progress for Black men and white women in leadership, despite both groups making gains in educational attainment. An emphasis on building workplace diversity is pivotal to modify the larger society. Building a workplace that allows different groups to interact and collaborate normalizes diversity in the workplace, and enables institutions to move beyond equality and focus on building equity.