Last August, Business Roundtable issued a new Statement on the Purpose of a Corporation. That landmark statement, signed by the CEOs of 181 of America’s largest corporations, represents a major change in the way organizations perceive their essential functions.
In short, according to Business Roundtable, a corporation should exist to benefit its stakeholders, not simply its shareholders. The CEOs defined “stakeholders” to include an organization’s customers, employees, suppliers, and communities, as well as its investors.
Many factors play into how an enterprise can meet such a lofty standard. From an HR perspective, one of the best ways to connect a company with the people it serves as a business is to attract and sustain a workforce comprising a wide range of ages, educational backgrounds, and social/cultural identities.
The Concrete Benefits of Diversity
Diversity, in all its forms, can drive the humanity of a company’s brands as well as the organization itself. When teams are more heterogeneous, they’re also smarter — and that intelligence can lead to better performance and increased profitability. In fact, a McKinsey report on 366 public companies found that those in the top quartile for ethnic and racial diversity in management were 35 percent more likely to have financial returns above their industry means.
At my company, Confirm BioSciences, there’s a 40-year age range across our departmental teams, which are nearly evenly split between male and female. Ethnicities and career backgrounds vary as well. Beginning with our founders, who came to the US from Turkey, we’ve always made an effort to encourage the widest possible range of perspectives and life experiences.
It’s our belief that a more diverse employee base not only ensures greater social and market awareness, but also helps identify business opportunities and refine those opportunities much faster. Diversity can connect an organization with its internal and external stakeholders in multiple ways:
1. It Fosters Better Awareness of Customer Needs
The wider the range of voices in a company, the more effectively the organization can respond to the many different people it serves. That leads to solutions and messages that better reflect customer needs.
The best way to fuel a team’s energy is to staff it with members who can connect personally with the feedback they receive from all types of customers. It’s a benefit that works both ways: Not only does a more diverse team help a company achieve a more sensitive understanding of customer input, but it also helps ensure customers are not misheard or mass-messaged with out-of-touch information.
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2. Employees Feel Heard — and That Makes Them More Likely to Share Their Innovative Ideas
Almost automatically, inclusivity fosters a more collaborative and creative environment where team members feel their opinions count. As a result, diversity unleashes an organization’s potential to step outside of well-worn paths, which in turn drives new intellectual property, fresh approaches to business problems, and greater competitiveness.
One of our company’s latest solutions is a health and wellness product line built around hormone assessment. Despite our core competency in drug-testing products, we were able to pick up on the trend because our product team includes a wide spectrum of people, such as employees at various life stages (like menopause) and individuals who understand the health problems associated with chronic stress. Their valuable input, received and acted upon, resulted in a new and validated product opportunity for the company. More importantly, our colleagues felt truly valued.
More Than a Corporate Checkbox
A more diverse corporate workforce is highly desirable — but HR and organizational leaders must be intentional about its creation. Senior executives and managers need both awareness and emotional intelligence. They must foster an environment that is inclusive of new voices and makes space for those voices in the company’s day-to-day operations. Employees need to be heard, and their viewpoints need to be amplified. The idea is to clear the barriers that keep individuals from making a direct impact. Doing so creates a sense of belonging and opens the floor to new influences.
For its part, HR must establish a baseline with new hires about the opportunity — and obligation — to work within an inclusive environment. Career paths must be established so that employees of all backgrounds have room for professional growth.
It’s also important to monitor opinions: HR should survey the workforce periodically to gauge progress and identify roadblocks in the company culture. If there is any sense that individuals are not being heard, it’s time to initiate dialogue on the topic and make space for people to speak up without fear of repercussion.
Diversity and inclusion should never be used simply to fill a corporate checkbox for political correctness. It is a worthy and practical goal simply because it helps an organization fulfill its reason for being. Society increasingly influences the function of enterprise, and this new reality can best be met by building a workforce that reflects and affirms the communities around it.
The perspective of organizational purpose is broadening — which means our workforces must as well.
Sara Holtmeyer is director of business development for Confirm BioSciences.