The Importance of Diversity and Inclusion in the Workplace

By: Peter Gandolfo

My first exposure to the business case for diversity and inclusion came in 2002. I was a fresh-faced MBA intern at Ford Motor Company, and I had been invited to meet with CFO Allan Gilmour. At that time, he was one of the highest-ranking gay executives in corporate America. We talked one-on-one in his office, and peering out from the window of his top floor workspace in Ford’s global headquarters, he shared his motivation for inclusion—he’s in the business of selling vehicles, and there’s no reason to narrow down the pool of people who could develop or buy them.

Emboldened by our conversation, I returned to my second year at UCLA Anderson feeling responsible to lead the group for LGBTQ and allied students. I was inspired to support not just my classmates who, like me, wanted to be honest about their sexuality, but also the straight classmates who would go on to lead and build organizations, whom we needed as allies. This is a thread that has continued in every role I’ve taken since. It’s meant living by example, advocating for equitable policies, and breaking down barriers between groups that aren’t so different when given the opportunity to make a more personal connection.

How businesses gain insight from diversity

Businesses want to sell to a diverse audience; a diverse employee base provides the scaffolding for that goal. Companies have learned that diversity brings innovation and crucial—and often much-needed—attention to details that a homogenous group might have overlooked. When United Airlines was launching a new nonstop flight to India, their South Asian employee resource group advised that arrival times in the middle of the night were surprisingly desirable because the made it easier to navigate the daunting traffic.

Companies like Mattel know that diversity of both product and opinion is crucial. In 2009, they launched a new line of Barbie dolls intended to represent greater diversity within the African American community, and they consulted members of their African American employee resource group. Employees contributing to the project suggested that particular attention be paid to areas like variation in skin tone and hair based on their own experiences. This added credibility when Mattel received the inevitable criticism about missing the mark.

Making use of diverse input isn’t a strategy restricted to the most established companies. For any business, it’s never too early to think about diversity and inclusion. At a recent gathering of Evolution coaches, one partner shared the observation that in startups, if the first 20 hires don’t represent diversity, it becomes an uphill battle to increase diverse representation.

Overcoming the bias of more of the same

Paul Gompers studied the decisions and results of venture capital firms, an industry dominated by white men. According to a review dating back to 1990, only 8% of investors are women. Representation of Hispanic and black investors is even lower. And moving the needle isn’t easy because investors are significantly more likely to partner with people like themselves: same education, same race, same previous employers. The biggest driver in a male leader bringing on a female new hire? Having a daughter. My interpretation of this: men with daughters become invested in seeing opportunities for women, which helps them access their empathy.

There’s a business case for tapping into empathy, or at least the desire to strengthen your team by assembling divergent perspectives. Diverse investment teams created quantifiably better returns, in part, because they are more effective in their input on strategy, hiring, and more. They are more likely to present new perspectives and innovative ways of disrupting what’s been done before. More perspectives at the table means a more informed decision.

This is why encouraging inclusion is such a critical area for businesses to consider. “Companies in the top quartile for racial and ethnic diversity are 35 percent more likely to see financial returns above their respective national industry medians,” according to a McKinsey report, titled “Diversity Matters.”

What you can do to diversify

In coaching clients as they build out their teams, I start by asking what skills and leadership styles are most important to them. The phrase “birds of a feather flock together” almost always comes to mind when I hear their answers. Most of us carry a predisposition to surround ourselves with people of a similar education, age, gender and ethnicity (to name just a few of the many features we subconsciously—and maybe sometimes consciously—consider). This tendency to choose “same,” called homophily, is weakening our businesses.

What proves more effective is challenging clients to think about their own strengths and the strengths of the rest of their team. Then, hire to fill in the gaps. Even in my own work, when I removed myself—and my biases—from the hiring process and instead filled the gaps in my team and myself, I ended up with a workforce that was much more well-rounded and effective.

Diversity doesn’t just look good on paper; it has real, tangible effects on a business. Next time you’re stuck on a problem, consider whether a new perspective from someone not quite like you might just be the solution you need.