Building a diverse team to run your business is an important driver of success. For years now, the question has not been whether diversity affects team performance, but how.
A recent report by McKinsey & Company, Diversity wins: How inclusion matters, addresses the business case for diversity and inclusion. Here are the key findings:
In 2019, companies in the top quartile for gender diversity were 25% more likely to have above-average profits than those in the bottom quartile. This was 36% for companies in the top quartile for ethnic minority representation versus the bottom quartile.
The results build upon and corroborate earlier findings. In 2014, those percentages were 15% and 35%, respectively. Not only are more diverse businesses succeeding above and beyond their competitors, this success is increasing year on year.
The evidence also shows that success increases in parallel with diversity. An executive board that is more than 30% female was more likely to outperform a board that is10-30% female. Similarly, those in the 10-30% bracket were more likely to outperform a board comprising less than 10% females. The statistics are similarly positive for ethnic minority representation.
Alongside the positives, however, remain some negatives: progress in increasing diversity has been slow. Female representation on executive boards in the UK and the United States rose by just 5% from 2014 to 2019. The representation of ethnic minorities in UK and United States executive boards rose by only 6% in that time period.
Globally, the progress has been even slower. Gender representation increased by just 1% between 2017 and 2019. Ethnic minority representation increased by 2% in the same time period.
Companies that had made the most impressive improvements to diversity and inclusion have flourished. However the majority of the companies studied (roughly two thirds) had made very little or no progress – some had regressed.
In the same way that the financial returns on diversity have increased since the study began, the likelihood of financial penalties in low performing companies increased too. Being in the bottom quartile for gender representation constituted a 19% increased likelihood of underperforming financially in 2019. This had increased from 15% in 2017 and 9% in 2014.
If you’re looking to improve diversity and inclusion in your business, McKinsey offers some advice.
Focus on the talent: your people are your greatest asset. Keep diversity and inclusion in mind when hiring and developing talent. In addition, set data-driven targets to achieve diversity at all levels. Leadership roles are particularly important in this regard.
Keep leaders accountable. Your senior leadership team must be held to account in upholding your values. This means also equipping your leaders with the capability to fulfil your diversity and inclusion commitments.
Be transparent and fair. Transparency around promotions, salaries, and the criteria behind them is critical. This should be presented using analytics tools that do not hold bias.
Implement and uphold a zero tolerance policy. This will ideally include guidelines on discriminatory behaviour, and should advise staff how to recognise and respond to micro-aggressions. Each member of staff should exemplify this policy in their behaviour daily. Open conversation about inclusion and feelings of belonging must be actively encouraged.
Visibly support multivariate diversity unequivocally. Managers should work together to build a culture in which all employees feel welcomed and supported. Use internal surveys to assess employees’ feelings of belonging.
Over the past 6 years, our equality and diversity strategy has guided us in building a more diverse team.
We believe that becoming more diverse and being more representative of the population of Birmingham and the UK has benefited us and has influenced the kind of projects we choose, and the value we add to those productions. Notable examples include:
This video was commissioned to showcase the work of USE-IT!, a funded project taking place in deprived areas of Birmingham, which included initiatives such as skills matching and language training to allow people that have recently come to the UK from other countries to continue their careers in healthcare. This project involved to local people about sensitive and emotional issues which were often related to their ethnicity and background.
This was a promotional video for the pioneering Black Studies course at Birmingham City University. We were privileged to help to script, film and produce a video for such a socially valuable course.
Our work introduces us to people of many different backgrounds, but in our work in higher education in particular, we make a lot of videos including, and aimed at, international students. Having a diverse team means that we can relate easily to people who might be in an unfamiliar environment.
With this welcome series for international students, we appreciated that the videos needed to be clear, steady paced, and with helpful visuals, because these were aimed at an audience who were not assumed to speak English as a first language.
We feel that because our company includes people with a range of backgrounds and experiences, this allows us to better respond to the diverse needs of our clients and their audiences.