4 Reasons to Create a Truly Diverse Organization
The all-boy’s club is a thing of the past. Diversity is a major priority now for companies large and small.
While putting a diversity and inclusion (D&I) strategy into practice can prove difficult, there is clear incentive for organizations to build the forms of leadership and management to support it.
In many industries, despite organizations’ best intentions to create a D&I workforce, the numbers suggest that efforts are still not producing the desired results. Take the U.S. tech industry as an example. A recent report on diversity at leading Silicon Valley tech firms found that among employees of these companies, 60 percent identify as white, 23 percent Asian, 8 percent Latino and 7 percent black. Meanwhile, in terms of gender, on average 71 percent of employees are men and 29 percent are women.
That’s a problem.
Robert Wessman, chairman and CEO of global pharma firm Alvogen, is an advocate of diversity. He claims that women are responsible for markets generating 90 percent of Alvogen’s profits worldwide.
“I am exceptionally proud of how talented and diverse our team is,” he says. But D&I is not just something to be proud about–it is becoming a business imperative for global competitiveness.
Wessman explains exactly how businesses seek to gain from building a diverse organization:
1. More productive employees.
Research suggests that people in inclusive workplaces perform with higher levels of productivity and efficiency, and are more likely to attract new business.
That might explain why a McKinsey & Company report from 2015 indicates that more diverse workforces perform better financially. It revealed that companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians. Those in the top quartile for ethnic diversity are 35 percent more likely to outperform their respective national industry medians.
Wessman believes that Alvogen is profiting from employing diverse teams of people. “We have seen first-hand how teams work better together when they comprise a vast range of cultures and personalities,” he says. “Alvogen operates worldwide with dynamic teams of more than 100 nationalities. Our company culture seeks to represent every single one of our employees, helping build a united organization.”
2. Happier employees.
Increasingly, organizations are understanding why they need to prioritize their employees’ happiness. Not only does this help with productivity, it makes them less likely to leave for a competitor, decreasing the costly search for and investment in replacements.
People working in inclusive workplaces tend to have better physical and mental health, reporting less stress and anxiety. That might be because inclusive workplaces are better at developing their employees’ human capital, helping them grow their skillsets and develop their careers.
It may also be the consequence of people getting along better. People working in inclusive workplaces typically have higher quality relationships, with greater levels of trust and better day-to-day interactions, according to a report entitled "Unleashing the Power of Diversity" by the City of London Corporation.
3. Greater innovation.
Innovation is reliant on having a range of different perspectives to draw from–it’s not possible when everybody is bringing the same outlook and experiences into the building.
“Diversity enhances creativity and innovation–without doubt,” Wessman stresses. “In an industry such as pharma, identifying ways to improve and reinvent existing products and services is crucial to being able to build a successful business. At Alvogen, we consider ourselves a ‘next generation pharma company,’ therefore we live and die on being innovative–our diverse teams, bringing their diverse perspectives, are a huge part of that.”
In its global D&I survey, Forbes Insights found that “survey respondents overwhelmingly agreed that a diverse and inclusive workforce brings the different perspectives that a company needs to power its innovation strategy.”
4. Global growth opportunity.
For organizations that have aspirations to grow into global companies, diversity can play a big part in achieving those objectives. On a surface level, building a multilingual business will help when reaching out to global markets and ensure that the company is able to communicate effectively. More than that, it will bring about an understanding of the cultural nuances that exist in foreign countries–essential for engaging global markets.
Wessman has successfully taken Alvogen into 35 countries worldwide, with plans to expand its scope even further. He says that “diversity provides the X-factor needed to outperform the competition.”
“Our unique fusion of amazing culture, carefully selected teams and respect for gender and each other has made us one of the fastest growing companies in the world,” he adds.