The Business Case for Diversity

By Jonathan Long, Vice President of Diversity, Equity and Inclusion, Tulsa Regional Chamber

Increasingly, companies around the globe are realizing there is a strong business case to be made for creating and maintaining diverse, equitable and inclusive workplaces. In many cases, diversity of leadership drives profits. Research by the management consulting firm McKinsey & Co. finds gender and ethnic diversity gives executive leadership teams an edge over their competition. According to the firm’s 2017 study of 1,000 businesses in 12 countries, companies in the top 25% for gender and ethnic/ cultural diversity on executive teams are more likely to outperform their peers’ profitability by 21% and 33%, respectively. Inversely, companies in the bottom 25% for both categories of diversity were 29% less likely to achieve above-average profitability.

Diverse teams tend to be more innovative, which impacts the type of revenue a company generates. A 2018 survey by Boston Consulting Group found that companies with above-average diversity on their leadership teams derived 45% of their revenue from innovation, compared to 26% by companies with below-average diversity.

A company’s employee diversity can translate into improved customer service and a deeper understanding of consumer behavior. A 2013 study by the Center for Talent Innovation found that when a team has one or more members whose gender, ethnicity, culture, generation or sexual orientation matches that of their target customers, that team is as much as 158% more likely to understand their customers. The same study also found that publicly traded companies with rich diversity among their leadership teams were more likely to improve their market share and capture new markets than companies without similar diversity.

Last but not least, diversity generates respect. According to the Gender Forward Pioneer Index, Fortune magazine’s “Most Admired Companies” have on average twice as many women in senior leadership positions as men. Gender diversity in the workplace increasingly matters to U.S. employees; a 2017 Pew survey found 78% of American adults ranked the issue as important.

Mosaic And The Inclusive Workplace Index

As the Tulsa Regional Chamber’s coalition of companies and nonprofit partners committed to diversity, equity and inclusion, Mosaic helps educate, lead and influence businesses on creating diverse workforces and inclusive workplaces to enhance their competitive advantage.

Through collaborative partnerships, community engagement, promoting resources and sharing knowledge, Mosaic helps companies not only improve inclusivity at their own organizations, but support and create equitable opportunities that help all communities thrive.

Mosaic also seeks to leverage the region’s diversity to improve perceptions of our community and grow the economy. Ultimately, Mosaic wishes to catapult the Tulsa region into the forefront of diversity and inclusion through talent recruitment initiatives and business retention and expansion efforts.

Taken annually by dozens of Tulsa-area companies and organizations, the Mosaic Inclusive Workplace Index quantifies the region’s progress toward inclusivity and equity. The index results provide both macro-level insights and tailored feedback for participants to help them improve their own DEI efforts.

Several encouraging insights came from the 2022 index. For example, of those organizations participating in the index, 62% have programs in place to develop a pipeline of diverse leaders, and 90% sponsor training or offer access to programs that focus on embracing differences and overcoming bias.

A full 85% of participating organizations take employees’ religious beliefs into account when planning work or holiday-related events, and 90% offer floating time off for employees to observe events of personal or religious significance.

DEI efforts extend beyond their own organizations. Of those taking the 2022 index, 87% engage employees in community DEI work by encouraging volunteerism with diverse populations.

In conjunction with the Inclusive Workplace Index, Mosaic celebrates Chamber members successfully developing and implementing diversity, equity and inclusion strategies. During its annual State of Inclusion event, Mosaic honors individuals, companies and organizations demonstrating exemplary commitments to inclusive workplaces and equitable economic outcomes.

For all of these reasons, many companies find that — beyond simply being the right thing to do — developing diverse, equitable and inclusive workplaces benefits their bottom line. For organizations in search of additional resources, the Annie E. Casey Foundation’s “Race Equity and Inclusion Action Guide” may be helpful, especially since, in 2020, the pursuit of equity became increasingly urgent for many companies and communities.