4 Why we want more diversity

When thinking about what a company can do in order to increase productivity, the first thought is likely to be that they should hire the best and brightest available talent. This translates into hiring people who have excellent qualifications and can show that they have succeeded in the way society typically recognises education and intelligence. This may not be the case though and a large number of surveys and studies have shown repeatedly that true innovation in an organisation thrives in a culture that is inclusive and values diversity of ideas, encourages unique perspectives and challenges stereotypical thinking.

In the words of David McKay (2016):

In 2015, the McKinsey report into 366 public companies showed that those who were in the top quartile for ethnic and racial diversity in their management teams were 35% more likely to have better financial returns than the average for their industry (Hunt et al., 2015) . Similarly, those in the top quartile for gender diversity were 15% more likely to have better than average returns.

This information is also displayed in Figure 3.

Figure 3 The diversity dividend

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Diversity’s dividend. What’s the likelihood that companies in the top quartile for diversity financially outperform those in the bottom quartile? Gender-diverse companies are 15% more likely to outperform. Ethnically diverse companies are 35% more likely to outperform. Results show likelihood of financial performance about the national industry median. Analysus is based on composite data for all countries in the data set. Results vary by individual country. Source: McKinsey analysis.

Figure 3 The diversity dividend

Next you will look at the three categories of diversity.