DEI Improves Performance
Diversity, Equity, and Inclusion (DEI) Day is on the 17th of September. While the current political regime has made DEI departments political, research shows that firms with diversified leadership perform better than those that don’t.
A report from McKinsey shows that executive teams with more gender diversity outperform their peers by almost 40%, and the teams in the top quartile for ethnic diversity also outperform those in the bottom quartile by 39%.
DEI is smart business policy
As business owners, we can find it tempting to hire people like us. That’s how the good ol’boy network functions. (I originally write “functioned”, as in the past, but I don’t think it’s quite gone yet.)
It wasn’t that non-white and/or non-male applicants were being turned away. They weren’t showing up. The leaders leaned on their friends, who were generally white men just like them, to fill leadership and board of directors spots. Which is probably why they didn't think of it as discrimination, even though the end result sure looks like discrimination.
The problem with hiring friends and people just like you is that everyone tends to come from the same backgrounds, attended the same schools (more or less), and their business ideas tend to be pretty similar. You end up with groupthink, where everyone agrees on what to do without really considering other options or potential consequences.
Groupthink can be very dangerous. The postmortem on the Challenger (I watched the explosion in real time in my 8th grade science class) put a lot of the blame on groupthink. In your company it probably wouldn’t be so catastrophic! But if you’re trying to put together a high-performance team, you’re better off with diverse executives.
Not to mention that if you have a global business, it’s a good idea to have leaders who understand the markets you’re active in.
I’m a solopreneur myself, but I do try to find diversity with my collabs and vendors as well as my clients.
What happens when you think DEI isn’t necessary
This is going to be a short article (for once!) Because I really don’t have to say that much as my example is pretty clear.
Our Secretary of Defense (no, the department is not named “War") decided that DEI was bad so he fired top women and BIPOC leaders of our armed forces.
And look at the results he got.
We’re not winning anywhere in anything.
You might want to have friends that are a lot like you & have a similar background, and that’s fine. However, for your business’s sake, look elsewhere when you’re putting together your team.
Recap (tl;dr):
Hire people who don’t look or think like you – it’s better for your business.
My expertise is not in putting together leadership teams, but I can point you to a couple of people who do this work. Message me if you’re interested.
Photo by Kamil Kalkan on Unsplash.