MLK Day: workplace diversity is good business

I’m a regular NPR listener during my commutes, and quite familiar with what NPR calls “Driveway Moments” (“You are stuck in your car—it’s not a flat tire or a traffic jam, it’s because you can’t tear yourself away from your radio—you are having a Driveway Moment.”)

A Morning Edition story this morning on workplace diversity and business success (loosely inspired by MLK Day, no doubt) wasn’t quite literally a driveway moment — it was over before I arrived at work — but otherwise it would have been.

The topic:

A growing body of research suggests that diversity in the workplace not only helps companies stay in tune with their customers, but also adds to the diversity of ideas and attitudes.

The NPR story is entitled “Studies: Diversity Spurs Workplace Creativity.” Click this link, then click “listen” to hear it.

It refers to a Washington Post article: “In Boardrooms and in Courtrooms, Diversity Makes a Difference.”

This article, in turn, refers to original research by sociologist Cedric Herring:

Cedric Herring recently decided to take things one step further [than whether diversity is morally desirable]. Given that discussions about morality are often divisive, the sociologist decided to take a more scientific approach. In other words, beyond the question of whether diversity is a good thing, is there evidence that it makes a difference?

Herring has just completed his study. He found that companies that are more diverse have more customers, a larger share of their markets and greater profitability. In fact, when Herring puts his numbers on a graph, he finds a linear relationship between diversity and business success, meaning that as diversity increases, those business indicators increase in step.

“Those companies that have very low levels of racial and ethnic minorities have the lowest profits and the lowest market share and the lowest number of customers,” he said. “Those that have medium levels do better, and those that have the highest levels do the best.” . . .

Like a good social scientist, Herring notes the limitations of his work:

While Herring’s study points to the benefits of diversity, it does not directly address the contentious question of how it should be achieved.

As a good scientist, he is cautious about the result and says it does not prove that companies do better because they are diverse. What the study shows is a correlation between diversity and business success. While diversity could be the cause of better business outcomes, it is also possible, for example, that companies that are successful to begin with do a better job of attracting and retaining minorities.

The Herring study itself:

Cedric Herring: “Does Diversity Pay?:
Racial Composition of Firms and the Business Case for Diversity” [PDF]

Finally, some good tips and suggestions about diversity:

HR Daily Advisor (BLR): “Diversity: What Every Employee Needs to Know”

6 key points. My favorite:

The opportunities of diversity. Employees should understand that diversity vastly widens the chance to find workers who excel, and makes for better decision-making by taking into account a wider range of viewpoints. Also, that diverse workplaces tend to have higher morale, and with it, higher productivity.

Read them all.

Photo credit: reverseZeR0 via flickr