by Ray Hayes
There has been a constant saying for years now; the more diverse your company is the more revenue you generate. The latest study to support this claim comes from the Boston Consulting Group (BCG) which has confirmed that diversity increases a company’s bottom line. According to BCG, “Companies that have more diverse management teams have 19% higher revenue due to innovation.”
Why does diversity increase a company’s bottom line? Well for starters, diversity is not just about race. For example, when you look at your family and friends, have you ever noticed that everyone has a different preference of food, ideas, and hobbies? Our entire world and life has been shaped around the idea of diversity. Therefore, diversity means diverse minds, ideas, and methods. These diversity of perspectives allow employees to formulate and solve issues in a variety of ways.
The BCG study concluded the following:
- Increasing the diversity of leadership teams leads to more and better innovation and improved financial performance
- Instead of focusing on a specific area of diversity, focusing on creating teams that have multiple areas of diversity has more value
- Nearly half the revenue of companies with more diverse leadership comes from products and services launched in the past three years
- Earnings Before Interest & Taxes (EBIT) margins that were 9 percentage points higher than those of companies with below average diversity on their management teams
- Companies that place a greater emphasis on digital technology show an even stronger correlation between diversity and innovation
