Executive Director, St. Louis Business Diversity Initiative
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If you mention diversity, most corporate leaders will acknowledge either verbally or through a head nod and agree that itâ€™s a good thing. Still, in many cases, business diversity initiatives areÂ categorized in the same manner as corporate giving and office philanthropy – a nice thing to do which may or may not yield any bottom line benefits, but is essential to the businessâ€™ well-being.
I think this is not entirely true. Diversity is a competitive advantage for companies to survive and thrive in todayâ€™s business environment. The introduction of different voices, with different perspectives, backgrounds, priorities, and orientations helps companies identify opportunities and succeed in new markets. An example of this is PepsiCo, which developed ethnic advisory boards that have input into new product creation. The African American advisory board played an integral role in the launch of Mountain Dew Red; a product for which the target market was the young African American community. By seeking the input of this group, the launch of the product was one of the most successful in the companyâ€™s history. As the demographics of the St. Louis region and the United States change and global economic forces have a greater impact on the business environment, it is imperative that companies must respond with a workforce that can reach a changing customer base comprised of people who understand the changes that are taking place.
So, what is diversity? At its core, it means embracing differences. As it relates to the workplace, diversity is people â€” measurable human capital, specifically, groups who have not traditionally been part of the workplace majority and with limited access to opportunity (Business Case for Diversity, 2006). These groups include: Blacks, Latinos/Hispanics, Asian Americans, Native Americans, women in executive roles, individuals with disabilities, and those who identify as gay, lesbian, bisexual, transgender, and more (LGBTQIA+) people.
Our demographics are changing. People of color are expected to make up 49.9 percent of the United States population by 2050 (U.S. Census Bureau). This represents a significant shift in the countryâ€™s cultural, racial, and ethnic mix. This dramatic shift suggests there will be a different societal makeup. To understand the growth of the different population sectors, companies needs to be in a position to look closely at the drivingÂ factors that are influencing it. Companies that develop and execute effective diversity initiatives will begin to reap the benefits.
With the senior levels of management directly involved in diversity initiatives, it demonstrates that they understand the bottom-line benefits of being inclusive. They send a strong message to stakeholders that corporate leadership cares, enabling them to reach broaderÂ markets with the best talent. By valuing diversity, companies can cultivate their best employee base and to be able to attract and retain themÂ at much higher rates.
Companies must communicate their commitment to diversity to both their internal and external audiences. Inclusiveness is a benefit to both the employee and customer. It is important to reflect the commitment to diversity in target market campaigns, mission statements and by celebrating and valuing the richness of different cultures and ethnic groups. Diversity is a competitive advantage.