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Leveraging diversity has many strategic benefits

MORE than 15 years into democracy, discourse on diversity in the workplace continues to be fuelled by political and social agendas. For many, transformation is still an issue of compliance, but evidence is mounting that inclusivity and diversity make strategic business sense and can increase competitiveness.

The question must be asked: has enough been done in S A to convince local companies of the strategic advantages of building integrated and inclusive workplaces? 

Researchers Stephen Knouse and Alvin and Patricia Smith at the University of Louisiana have recently put forward a convincing argument. In a paper — titled The Business Case for Diversity: Is Diversity Cost Effective? — they demonstrate that diverse workforces offer advantages in several areas.
They posit that they can deliver a competitive edge in nine possible ways, but hard evidence that diverse companies make more money is understandably more difficult to come by and most studies to date have been inconclusive. Researchers admit it’s difficult to measure, given the many variables that influence company performance. 
Thomas Kochan and fellow researchers at the MIT Sloan School of Management conducted a comprehensive study into the matter a few years ago and, while they didn’t find decisive evidence in favour of the bottom-line argument, they concluded that harnessing diversity does increase overall competitiveness.

“Organisations that invest their resources in taking advantage of the opportunities that diversity offers should outperform those that fail to make such investments,” they concluded. 
In fact, they believe the bottom-line argument is outdated and places too narrow a lens on the benefits of diversity. Managers would instead do better “to focus on building organisational culture, human resource practices and the managerial and group process skills needed to translate diversity into positive organisational, group and individual results,” they say.

Bottom-line evidence aside, the areas that have shown to be positively influenced by diversity, as outlined by Knouse and his colleagues, are widely recognised as factors that can create happier, more innovative and motivated workforces. 

In SA — where the business case for diversity hasn’t been pushed as hard — it has real merit when used alongside the more common moral and legal arguments for transformation. 
Some companies here continue to bemoan the transformation agenda and its supposed negative effects. Enough evidence now exists to rubbish these claims and businesses need to be aware that it is not diversity that is the problem, it is their attitude towards it. 
To talk of “diversity management’” is still to see each group in a separate corner. Instead of simply asking: “How can we all get along better?”, we need to be asking: “How can we leverage our diverse workforce to become a better business?” 

Leveraging diversity in practice is about building strong, integrated organisations in which the corporate culture is truly inclusive and not dominated by one world view. Inclusive corporate cultures will help with staff retention. When work feels like a place for all, it is easier to attract the right people and keep them happy. 
The way companies harness their diversity will also influence how they see and access markets. Product and service offerings that are more inclusive will open the door to new emergent markets. 
In the decade ahead, organisations that understand the strategic benefits of diversity will be more competitive, flexible and inclusive. 
n Arendse is MD of the Mediation and Transformation Practice SA.

Craig Arendse