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The Impact of Diversity and Inclusion on Decision Making

We’ve long touted the benefits of diversity and inclusion in the workplace. Inclusion isn't simply something that's "nice to do," or even "the right thing to do." Inclusion, we've been saying for years, is a business imperative. That’s why we’re always excited to see data that backs up what we’ve been telling our clients for the past two decades. And new research by Cloverpop, a cloud app aimed at improving business decision making, does just that. Erik Larson, founder of Cloverpop, discusses the methodology and findings in an article for Forbes.

Without going into the specifics of the study (the details are available in the links above for those interest in how concepts like “better” business decisions and “better” results were measured), we thought we’d highlight a few of the findings:

  • “Inclusive teams make better business decisions up to 87 percent of the time.”

  • “Teams that follow an inclusive process make decisions two times faster with half the meetings.”

  • “Decisions made and executed by diverse teams delivered 60 percent better results.”

These results are intuitive for a number of reasons. In a diverse economy and nation, it makes sense that having a group that more closely represents a target market, for example, will make better decisions with respect to that market. They will have access to and input from a greater variety of experiences and viewpoints. They are less likely to overlook risks or opportunities that might be missed by homogeneous groups.

Similarly, a group composed of all white men, for example, might spend more time coming to a decision about how to best engage with a female Latina audience precisely because they are conscious of what they don’t know and agonize over how to deal with that acknowledged blind spot. By contrast, a diverse group is more likely to have someone able to offer perspective or experience to help address the identified gap. Having ready access to critical market intelligence is obviously good for business.

We refer to this intelligence as "Key Employee Demographics Required for Growth." In short, your employee demographics should mirror your current, or desired, market demographics. You're not likely to meet the market needs of a female Latina population if your leaders are all white men. Conversely, you're not likely to meet the market needs of a white male population if your leaders are all Latina women.

There is a strong business rationale for inclusion. It's gratifying to see more research being done to support what we've known for a long, long time. The more business leaders can be presented with hard data proving diversity and inclusion have real impacts on the bottom line, the more they can take steps to improve their companies and the economy as a whole.

Be inclusive!

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