Most companies today accept that diversity – such as gender, age, cultural background and disabilities – benefits both employee and employer.
As people, we are inherently diverse and our different perspectives and experience can bring distinct and equally valuable viewpoints and insights to the workplace. A diverse workforce reflects society at large, and, as such, your employees can help you better understand your customers. Acquired diversity of skills, training and working in other markets or across different sectors is also a valuable asset in business for obvious reasons.
I’ve always been a big fan of diversity because it’s the right thing for society. But it’s also a business necessity.
New research by McKinsey & Company makes exactly this point. The report, “Diversity Matters”, analysed the performance of 366 public companies across a range of industries in Canada, Latin America, the UK and US and found that gender and racial diversity boost the bottom line.
Ethnically diverse companies were found to be 35% more likely to have financial returns above their respective national industry medians, while gender-diverse companies were 15% more likely to outperform on the same metric of financial returns.
The report states: “More diverse companies, we believe, are better able to win top talent and improve their customer orientation, employee satisfaction, and decision-making, and all that leads to a virtuous cycle of increasing returns.”
It’s good to see diversity within our industry gain more coverage lately, including a recent AdNews report by CommsCouncil CEO Tony Hale speaking in favour of diversity. Tony argued that advertising works best when as an industry we represent the diverse nature of the Australian community. I totally agree.
Over time, I’ve seen ample evidence that a diverse workforce fosters creativity and innovation, while contributing to staff morale and productivity. Show me a business that wouldn’t benefit from all of that.
As agencies, the diversity of our employees is incredibly valuable because it allows us to tackle clients’ problems from different angles and a position of inherent understanding of customers’ needs. The same goes for our clients and marketing departments, for the same reasons.
I was pleased to see that the McKinsey report made the case for diversity to be reflected in management. One result showed that greater gender diversity on the executive team of UK companies corresponded to highest performance uplift of the study – for every 10% increase in gender diversity, EBIT rose by 3.5%.
We’ve been promoting diversity for some time at GroupM, but we made a firmer commitment last month when we announced our goal for a 50:50 ratio of men and women in leadership roles mid 2016. I think we’re well ahead of other companies already, with 39% of GroupM leadership roles held by women, but, obviously, there’s room for improvement.
In fact, there’s room for improvement across the entire industry, not just within agencies but on the client side as well. We can all do better.
Just as valuable as the impact on the bottom line, companies that make diversity a priority enable their employees to learn from each other’s differences, which not only makes them better in the workplace, but also better people outside of the workplace.
John Steedman is the outgoing CEO and chairman of GroupM.
- This article was first published in the May 1, 2015 edition of AdNews.