Why Diversity Can Help Your Small Business

By Sean Ross

2 min read

Startups and growing companies may need to place a premium on those with different backgrounds and experiences, according to a 2015 study by McKinsey & Company, which found that gender-diverse and ethnically diverse companies were more likely to achieve above-average returns.

Those sentiments echoed earlier research from the Harvard Business Review, whose December 2013 issue discussed how diversity can drive innovation. HBR argued that “new research provides compelling evidence that diversity unlocks innovation and drives market growth.”

The Benefits of Diversity

If you have played sports or been in the business world for a while, you might intuitively understand that competition makes things better. To take an obvious example, competition between Apple and Samsung helps drive better smartphone technology. When a diverse group of people can bring a diverse array of talents and ideas into the fold, the competition among those ideas helps promote dynamic growth. This is why Jeffrey Baumgartner, author of “The Way of the Innovation Master,” refers to diversity as the mother of creativity.

Diversity, when managed appropriately, can help open the hearts and minds of everyone. This includes ownership and leadership, who can do a lot to promote diversity by listening to their team. If you have employees from different backgrounds, invite them to share stories about their upbringing and show appreciation for their unique experiences.

Diversity help better ideas win out over time, and it sends a signal to potential customers and employees that you welcome everyone.

Promoting Diversity in the Workplace

People learn from one another when they communicate effectively and responsibly. If you want to promote diversity, make it clear that you want your team to interact with each other and get to know one another on a personal, friendly level. You do not have to call it “diversity training,” but that’s the effect.

When members of a team intuitively like each other and want to like the ideas of others, diversity has room to flourish. It is much more difficult to drag people into changing their ways of thinking when they aren’t ready.

Other tactics include:

  • Hiring from diverse backgrounds
  • Expanding leadership meetings to include new perspectives
  • Recognizing different holidays

Managing Diversity in the Workplace

Diversity and multiculturalism have a lot of benefits, such as creativity and dynamism, but they can also produce major drawbacks if they aren’t managed appropriately.

While diversity can drive growth and innovation, emphasize the common goals of the organization and its employees. When emphasis is placed on what makes people different, people tend to trust others less.

As a manager, you need to create a sense of the greater good that the entire community can strive toward. Perhaps that means creating shared experiences or using team-building exercises – even simple things like stretching together in the morning. Most importantly, you must not lose the perception that promotion and approval are merit-based.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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