Businesses both large and small are competing for new customers on a global scale, and, in doing so, they soon recognize the value of diversity in organizational groups and teams to the bottom line. When creating a group or team in the workplace, smart managers realize that with increased diversity come new ideas, products and services.
Diversity translates into differences across many dimensions, including culture, sex, physical abilities, age, race, sexual orientation and even into political beliefs, religious practices and socio-economic status. In short, it’s recognition that people are all unique with their own frames of reference molded by both internal and external factors. In addition to DNA – an internal factor that can’t be controlled – each person’s particular frame of reference is also shaped by many external factors, including where a person lives, how he is raised, what educational opportunities are available, etc.
Some Groups or Teams are More Diverse Then Others
But, while people are all individual, they often share many internal and external traits. For example, people raised in the midwestern United States have a shared culture and beliefs that may differ widely from people raised Europe or the Far East. For businesses, the impact of these shared traits within groups and teams can be both a plus and minus.
On the plus side, people from similar regions with similar backgrounds and similar physical traits are often most comfortable interacting with people like themselves. But, on the negative side, those shared traits often share another factor in the form of thought processes that are too similar in nature. When a group or team is composed of people with backgrounds that are too much alike, diversity – and new ways of thinking – can suffer in the process.
Why Should Businesses Strive for Diverse Groups and Teams?
When a group or team comprises people who differ in age, sex, race, cultural background and other factors, the hoped-for result is a collaboration of wildly diverse thinking. Working with people who differ from each other challenges people’s preconceived notions about how the world works and it forces people to step outside their comfort zones and consider new thought processes. By opening people up to new ways of thinking, the hoped-for result is often new ideas, new processes, new services and new products.
Making Diversity Work
When establishing new groups or teams, smart managers strive for diversity by balancing the individuals they select based upon differing internal factors, such as age, race and gender, and external factors, including differing backgrounds, educational experiences and political ideologies. Additionally, when working with diverse groups and teams, smart managers seek open discussion, encourage feedback among group and team members, actively listen, and practice flexible decision making. After all, having diverse groups and teams in the workplace provides little value if their new ways of thinking are ignored.
As workforce demographics shift and global markets emerge, workplace diversity inches closer to becoming a business necessity instead of a banner that companies wave to show their commitment to embracing differences and change. Employees reap tangible and intangible benefits from workplace benefits, not the least of which include respect from co-workers and business gains.
Workplace diversity fosters mutual respect among employees. Whether employees work in groups or teams comprised of co-workers with varied work styles, or colleagues who represent different cultures or generations, a synergistic work environment become the norm. Although an idyllic atmosphere may be difficult to achieve, employees nevertheless recognize the many strengths and talents that diversity brings to the workplace and they gain respect for their colleagues’ performance.
Conflict inevitably occurs in the work environment. However, employees who acknowledge others’ differences often also find similarities, particularly when there are common goals – production and quality. Respect for co-workers either reduces the likelihood of conflict or facilitates an easier road to conflict resolution. The ability to resolve workplace conflict minimizes potential liability for employee complaints that would otherwise escalate to formal matters, such as litigation. Workplace diversity preserves the quality of employees’ relationships with their co-workers and their supervisors.
Diversity in the workplace is important for employees because it manifests itself in building a great reputation for the company, leading to increased profitability and opportunities for workers. Workplace diversity is important within the organization as well as outside. Business reputations flourish when companies demonstrate their commitment to diversity through aggressive outreach and recruiting efforts. An organization known for its ethics, fair employment practices and appreciation for diverse talent is better able to attract a wider pool of qualified applicants. Other advantages include loyalty from customers who choose to do business only with companies whose business practices are socially responsible.
The importance of workplace diversity cannot be overstated when it comes to an organization’s ability to reach markets in foreign countries. The appeal of global markets creates two kinds of opportunities for employees: opportunities for promotion and employee development. A global marketplace opens doors for employees with diverse language skills and multicultural understanding to build global profit centers. Employees interested in learning multinational business strategy and who are available for possible expatriate assignments may also find new and challenging career opportunities.
A diverse workplace offers more than exposure to employees from different cultures and backgrounds. Employees learn from co-workers whose work styles vary and whose attitudes about work varies from their own. This is particularly true for employees within multigenerational work environments. Traditional-generation workers learn new technology and processes from workers who belong to the tech-savvy Millennial generation. Likewise, Generation X employees learn from exposure to the assertive, go-getter work ethic typical of many Baby Boomers.
More than 25 million people working in the U.S. are foreign-born, and data suggest that in less than three decades, the country will be a truly pluralistic society with no single group holding a majority. If you expect your company to compete and succeed in this new world order, you need to take a close look at the advantages and disadvantages of diversity in the workplace.
Advantage: Better Financial Results
Numerous studies have found that companies with diverse teams are more profitable than homogenous businesses. A 2015 McKinsey report on public companies noted that those with the most ethnic and racial diversity in their management were 35 percent more likely to be financially successful.
Advantage: Global-Level Competition
Millions of Americans are employed by foreign-owned companies. We live in a global economy, and the companies that consistently top the Fortune 500 list are global in nature. Companies need to employ people who represent diverse populations and points of view to compete on this world stage. What sells in small-town America may not fly in the cities of the United Arab Emirates. On the other hand, if you understand the culture and the economies of each, maybe it will.
Advantage: Fact-Based Decision-Making
Studies have found that diverse groups tend to focus on facts when making decisions. They look beyond old-school ways of thinking and examine and re-examine facts to remain objective, thus making better decisions for their company. Nonhomogeneous groups are more able than homogenous groups to identify their biases and work to keep them at bay when making important business decisions.
Advantage: Creative and Innovative Thinking
If everyone acts and thinks alike, you’re likely to see the same-old, same-old when it comes to approaches to products, distribution, marketing, management and sales. However, when several people approach problems and challenges from varied perspectives, you’ll discover more creative solutions. Research suggests that diversity increases innovation and improves market growth.
Advantage: Cross-Cultural Understanding
While homogenous groups may naturally get along better, in an increasingly diverse world, cross-cultural understanding creates a better working environment and a better world. Rather than relying on a crutch of old world prejudices and misconceptions, diverse work groups improve internal climates and external results for businesses.
Disadvantage: Difficulty in Transitioning
If your company is just beginning to recognize the potential of diversification, there will likely be challenges to creating a more diverse work environment. Old ways of thinking and entrenched prejudices may hinder your efforts and create tension and conflict. Additionally, as cultures collide, there may be misinterpretations of meanings. What’s funny to one culture may be considered disrespectful to another. Management needs to buy in and educate employees across the board if workplace diversity is to have its first measure of success.
Disadvantage: Short-Term Cost Outlay
Depending on how long you’ve been in business, you may have already learned a great deal about accommodations in the workplace. Just as the Americans with Disabilities Act brought significant changes to some businesses at a financial cost, so will diversity require some flexibility. For example, if you have employees who are practicing Muslims, you’ll need to give them time and space for daily prayer. Transgender employees may need their own bathrooms. As your employees become more diverse, you may face associated costs that you hadn’t considered.