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Why diversity in companies could lead to higher returns

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Businesses with staff from different backgrounds, age, gender, ethnicity, culture and race are more successful than those without. PHOTO | FILE

Diversity matters in any institution; those who think it doesn’t or who aren’t paying attention to it are choosing to bury their head like the proverbial ostrich in the sand.

Recent research conducted by Mckinsey on this subject shows that companies that are the most diverse in terms of gender and race are more likely to have better financial returns than their industry counterparts.

Conversely, companies that are least diverse are statistically less likely to achieve above average returns.

When we talk about diversity, we are looking at age, gender, ethnicity, cultural experience, and mental and physical ability. Put simply, diversity is about difference and inclusion. It is about creating a culture and practices that recognise, respect and values difference.

All too often in Kenya, we see large businesses being run entirely by family members, even novices at times. This limits the business from experiencing the richness of different perspectives, not to mention the opportunity cost of missing out on experienced and qualified ‘outsiders’.

For example, how does an all-Asian, middle-aged, all-male board of directors — a common scene in the business world — truly understand the complexities of their consumer base in Kenya, given that two-thirds of the Kenyan population is under 30, just over 50 per cent are women, and the country boasts at least 42 different communities, each with varying perceptions, needs and expectations.

When senior leadership teams reflect, and gather information, on the demographics of the consumer market, they are more likely to succeed. Whether it is socially, with a business hat on, or from a bottom-line perspective, it is the right thing to do.

Having a diverse workforce, however, does not happen with a wave of a wand. It takes a conscious effort, and at times, entails changing old behaviours and mindsets.

When recruiting, it is very likely that we ‘pick the crop’ that is most similar to us, as this makes us feel comfortable and provides a sense of trust.

Recruiting someone different can throw us out of our comfort zone, making us feel strange and uncomfortable.

We have all heard comments like, “We can’t recruit him, he is a Kikuyu or Indian, and all they are after is money!’ or “We can’t recruit her! I am sure she will go off and have a baby, she just got married you know.”

Too often, comments like this are made and shrugged or laughed off, but this really is no laughing matter.

Nearly all of the top performing companies in the world — such as Google, JP Morgan and Apple — have a diversity and inclusion strategy. Apple firmly believes that the most innovative company must also be the most diverse.

“Diversity is more than any one gender, race, or ethnicity. It’s richly representative of all people, all backgrounds and all perspectives. It is the entire human experience,” says Denise Young Smith, vice president of worldwide human resources, Apple.

Many Kenyan firms want to be innovative and compete in a global market, which makes the issue of diversity even more important.

“A diverse mix of voices leads to better discussions, decisions and outcomes for everyone,” says Sundar Pichai, CEO, Google.

In a country like Kenya where the class, gender and racial divide are accentuated, businesses need to make a decision to set aside their biases, being open to differences, and becoming more inclusive.

Keeping an open mind, appreciating and capitalising on the strengths of people from different walks of life, can steer your business towards profits.

The writer is the founder and owner of Redstone Consulting, a consultancy that focuses on leadership development, change management, performance management, team development and executive coaching.