McKinsey Study Finds “Diversity Matters” for Organizational Success
by: Avril Langevine
A recent McKinsey & Company report titled “Diversity Matters” confirmed what we know to be true based on our experience and what many other studies have shown: there is a strong relationship between companies that have diverse leadership and those with better bottom-line results. As the report says: “More diverse companies—those with a greater share of women and a mixed ethnic/racial composition in their leadership—are better able to win top talent and improve their customer orientation, employee satisfaction, and decision making.”
The study examined financial data and leadership demographics for hundreds of organizations in the US and abroad and found that companies in the top 25% of racial and ethnic diversity were “30 percent more likely to have financial returns above their national industry median. Companies in the bottom quartile for both gender and ethnicity/race were statistically less likely to achieve above-average financial returns… They were not just not leading, they were lagging.”
Many people closely watched MLT partner Intel pledge earlier this month to spend $300 million over 5 years to increase their diversity. Intel’s CEO, Brian Krzanich, said that “A fully diverse and inclusive workplace is fundamental to our ability to innovate and deliver business results.” In other words, it’s a business imperative.
At MLT, we are working with top companies every day to help them recruit, retain, and promote minority talent to take full advantage of all the benefits that a diverse organization can provide. Over 100 leading corporations, non-profits, academic institutions and foundations are current MLT partners, gaining access to the best minority talent nationwide at each stage of the career cycle.
As McKinsey concludes, “[G]iven the increasing returns that diversity is expected to bring, it is better to invest now, as winners will pull further ahead and laggards will fall further behind.”