In this video, Dr. Stefanie Johnson lays out the business case for diversity and inclusion in the global enterprise. Learn how prioritizing diversity and inclusion can give your business a boost.
- [Blonde Woman] Many of the best companies in the world struggle with diversity and inclusion. It is the grand challenge for businesses today. But if we approach diversity and inclusion just like any other organizational initiative, it can be accomplished. And not only can it be accomplished, there is little doubt at this point that it should be done. Diversity is a business imperative. According to McKinsey, in 2025, 57% of households earning more than 20,000 dollars a year will live in the developing world.
Seven emerging economies, China, India, Brazil, Mexico, Russia, Turkey and Indonesia, are expected to contribute nearly half of the global GDP growth in the next 10 years. This means that successful companies of the future will be global companies. And if you hope to expand your business into any of these emerging economies, you're going to have to make diversity and inclusion a top priority. And if you're still on the fence, let's explore more of the business case for diversity.
First, diversity increases companies ability to capture new markets. Having people on your staff who understand the target market will make you 70% more likely to appeal to those customers. For example, women are the largest untapped pool of investors in the US. Major investing firms can not attract women's business. But Ellevest, a woman's run and operated company, somehow is able to attract female investors. Their tagline "Invest Like A Woman" says it all. Second, increasing diversity increases sales.
When you have a better understanding of your customer base, you're better able to reach your customers. What does this mean on a global scale? The McKinsey Global Institute estimates that a scenario in which women achieved complete gender parity could increase global output by more than 25%. That is 12 trillion dollars by 2025. This means that if women fully participated in the economy the economy would grow by a quarter. And third, diversity enhances innovation. Having diversity of thought not only helps you reach new markets and increase sales, but it helps you improve your business by being more innovative.
Diverse perspectives bring new ways of thinking. One study showed that female representation in top management of the S&P 1500 over 14 years lead to an increase in financial performance that equated to 42 million dollars in firm value. And companies who prioritized innovation saw the the greatest financial gains when there were woman in top management. More diverse companies just perform better. The results are even more powerful when we look at diversity at the top of organizations.
Probably because that's where there is the greatest imbalance. So yes, it's a challenge. But we can do this. Every journey starts with a single step. And this is our journey; yours and mine.
- How prioritizing diversity and inclusion is good for business
- Establishing accountability
- Creating a global diversity strategy
- Creating a localized strategy
- Using benchmarks to track the progress of your efforts
- Measuring diversity program success
- Diversity and inclusion in Brazil, Russia, India, and China