For the St. Louis American
If you mention diversity, most corporate leaders will acknowledge either verbally or through a head nod and agree that it’s a good thing. Still, in many cases, business diversity initiatives have been 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 business’ well-being.
I think this is not entirely true. Diversity is a competitive advantage for companies to survive and thrive in today’s business environment. The introduction of different voices, with different perspectives, backgrounds, priorities and orientations, helps companies identify opportunities and succeed in new markets.
For example, PepsiCo has developed ethnic advisory boards which have input into new product creation. The African-American advisory board played an integral role in the launch of the Mountain Dew Red product, whose target market was the young black community. By seeking the input of this group, the product launch was one of the most successful in the company’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 for companies to respond with a work force that can reach a changing customer base and with people who understand the changes that are taking place.
So, what is diversity? Diversity has many definitions. At its core, it means embracing differences. As it relates to the workplace, diversity is people, measurable human capital – specifically, groups who have not traditionally been part of the workplace majority and with limited access to opportunity. These groups include: blacks, Latinos, Asian Americans, Native Americans, women in executive roles, individuals with disabilities, and gay, lesbian, bisexual and transgendered people.
Our demographics are changing! People of color are expected to make up 52.3 percent of the United States population by 2050 (U.S. Census, 2000). This represents a significant shift in the country’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, your company needs to be in a position to look closely at the facts and factors which are driving the growth. Companies who develop and execute effective diversity initiatives will begin to reap the benefits of growth.
With the senior levels of management involved in diversity initiatives, it demonstrates they understand the bottom-line benefits of being inclusive. The direct involvement of senior management sends a strong message to the stakeholders that the corporate leadership cares, which enables them to reach the broadest possible markets with the best talent. A strong diversity initiative is the hallmark of an organization that recognizes customers and employees as valued contributors. By valuing diversity, companies have the ability to cultivate the best possible employee base, because the pool being developed by the organization will allow for the attraction and retention of employees at much higher rates.
It is important for companies to communicate their commitment to diversity, to both their internal and external audiences. Their commitment to inclusiveness is both a benefit to 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. Those companies who take inclusiveness seriously and tell their stories will attract both employees and customers, who will develop a loyal base because they will begin to feel appreciated and valued.
Successful companies rely on a network of suppliers to allow them to operate smoothly and deliver products and services to the marketplace in effective and efficient manner. A well-managed company will seek out the best possible diverse supplier as options to traditional alternatives. Companies who diversify their supplier pool are able to better serve their customer base. Relationships with diverse suppliers bring a different perspective to the company along with the creation of deep, lasting inroads into emerging markets.
As we move forward, diversity will affect every area of business. Companies who track and measure how they spend their dollars on inclusive practices such as talent recruitment, marketing, employee retention and supplier development will see how the bottom line is influenced. Diversity is a competitive advantage!
Valerie E. Patton is executive director of the Saint Louis Business Diversity Initiative.