Gender Economic Governance is a Strategic Business Issue
Talent and Productivity
Whatever your own background, if you’re running a marketing department, you know the most qualified candidate for your next job opening could come in any ethnicity, any size or shape. (Just like the people you market to.)
A January 2013 UK meta-analysis, The Business Case for Equality and Diversity, reviews the literature and highlights trends:
“This range of potential business advantages for diversity has been supported by several authors (e.g. Subeliani & Tsogas, 2005) who suggest that increased diversity can lead to a better understanding of local markets and customers, increased ability to attract and retain the best people, greater creativity, better problem solving and greater flexibility for organizations.”
A 2007 Tatli & Ozbilgin survey of 285 diversity and equality officers suggested that the top ranking business benefits for diversity were perceived to be:
Ability to recruit and retain the best talent (63.9%)
Because it makes business sense (60%)
To improve business performance (48.1%)
To address recruitment problems (47.3%)
A desire to improve customer relations (43.2%)
To improve products and services (42.6%)
Having Women on Boards Increases Profits
To zero in on just one component of diversity – employment and advancement opportunities for women: The European Commission published a study of the effect of having women in management and on boards. The fact sheet from this study marshals the research, including:
The 2009 McKinsey “Women Matter 3” study reported that companies scoring in the top quartile of organizational performance – which were the companies with more women in top management – tended to have an operating margin at least twice as high as those in the bottom quartile.
In McKinsey’s 2010 study, “Women at the top of corporations: Making it happen”, they report a 41% higher return on equity for companies with the highest share of women on their boards compared to companies with no women on their boards.
An August 2012 Credit Suisse study compiled a database on the number of women – since 2005 – sitting on the boards of the 2,360 companies constituting the MSCI AC World index. The outcome shows that, over the past six years, companies with at least one female board member outperformed those with no women on the board (by 26%!) in terms of share price performance. Interestingly, this performance pattern is particularly noticeable since the onset of the global financial crises in the second half of 2008.
Innovation and Global Business
Ernst & Young’s Insight report “Driving innovation through diversity” warns: “If an organization does not leverage the potent weapon of diversity, it risks limiting its creative potential and ultimately losing its competitive edge.”
E&Y’s viewpoint is that diversity is not defined by race or gender, but encompasses the whole human experience — age, culture, education, personality, skills and life experiences. E&Y believes this cultural diversity offers the flexibility and creativity we need to recover from the economic crisis and confront the many forces challenging us, and lists four imperatives for success:
Stir the pot. Research shows that diverse viewpoints generate the lively debate that can create new ideas.
Anticipate the Next Big Thing — or better yet, drive the Next Big Thing! Diversity powers innovation, helping your business generate new products and services.
Nurture a spectrum of talent. Expect to find talent in unexpected places.
Get the mindset. Focus on transformational leadership.
As an example, Frito-Lay asked its own Hispanic employee affinity group to provide input for a new guacamole-flavored chip, and as a result, it was able to produce a new product worth $100 million.
And according to Forbes, diversity helps overcome “the disadvantage of sameness”: “People from the same background and experiences tend to also have shared perspectives, which can make it difficult for them as a group to produce fresh ideas and solutions. The broader the range of people, the greater their innovation power.”
What’s It Mean for Marketing?
To circle back to our own patch of turf, diversity is quite important for marketing. We look outward to understand our customers so we can speak to them in ways they recognize. More and more often, they will be different from us – particularly if you’re moving into global markets. As Deloitte notes, “a diverse employee base will drive affinity with and understanding of the customer.” This can affect messaging, product names, media buys, distribution channels, and much more. And as Frito-Lay’s experience shows, product marketers can discover new, profitable products.
So, as your build your plans and your teams, keep diversity in mind. Think beyond race and gender; look for diversity in backgrounds, outlooks, and cultural training. You always need someone who can make the trains run on time – and somebody who can figure out how to build a better train. Look for different skill sets, which together become a collection of strengths balanced against weaknesses, so your marketing department can be strong in every area.
As Dr. King famously said, “…life at its best is a creative synthesis of opposites in fruitful harmony.”
Read more at https://www.business2community.com/strategy/diversity-strategic-business-issue-0749376