Scholar, Pierre Elliott Trudeau Foundation
An accounting firm recently learned an important lesson in the value of diversity: After several gruelling weeks of preparation, John (not his real name) and his team had finally arrived at a major client’s 40th-floor suite, ready to pitch why his firm was the best choice for a major contract.
His team had crunched the numbers, scrutinized the competition, and perfected their presentation. But, unbeknownst to John, his team had already lost before they even entered the room: while they waited in the lobby, the prospective client walked over to John’s team to explain that her company valued diversity; for this reason, they would not be available to hear a presentation from John’s all-male, all-white team.
The case is indicative. More and more businesses are realizing that diversity is not just the right thing to do; it is also an important strategy for staying competitive in changing markets.
Last month, during a roundtable with leaders from various Toronto-based firms and initiatives as part of the Pluralism Project, business representatives sketched a compelling list of reasons why companies can no longer afford to ignore diversity. Here are the top five:
1. Clients demand diverse teams.
The anecdote above (as told by one of the more diverse accounting firms that had been bidding against John’s team) highlights a new reality facing many Canadian businesses. More and more prospective clients – particularly U.S.-based multinational corporations – explicitly require diversity as a term of service. Legal, accounting and other professional service firms now encounter calls for proposals and retaining letters with explicit diversity requirements; if a firm is unable to put together a qualified, competent, and diverse team, they are simply unable to attract or retain certain major clients.
2. Diversity drives productivity.
As one senior legal associate explained during the Toronto roundtable, the demographic pool of qualified candidates is rapidly changing: top graduates are more and more likely to be women, visible minorities, and/or LGBT, among other traditionally under-represented identities. If these qualified candidates don’t see people like themselves represented at senior levels, they are less likely to be mentored and less inclined to believe that they can make it to senior partner. In contrast, newer employees of diverse backgrounds are more likely to stay that extra hour or take on that extra project if they believe that their hard work can translate into a senior position down the road. Investing in diversity means investing in employees’ belief in workplace meritocracy.
3. Diverse teams perform better.
More and more evidence suggests that diverse teams are more effective: their outputs are stronger, their bottom line bigger, and their engagement deeper. Some participants at the recent roundtable pointed to external surveys that had underscored this point; others had internal research from their own firms to further bolster this finding.
4. Markets are becoming more diverse.
Some Canadian businesses have focused on penetrating markets outside of North America; others have focused on reaching out to under-served domestic populations within North America like Indigenous communities and newcomers to Canada. In all of these cases, businesses must learn to interact with increasingly diverse markets. And in order to serve a market, many businesses believe, your company must reflect that market. Without the in-depth cultural knowledge, insight, and connections that come with hiring and promoting diverse populations, it is unlikely that businesses will be successful in tapping into these markets.
5. It plays to our competitive advantage.
Canada is world-renowned for its pluralism, and nowhere is this diversity better seen than in Toronto. As firms strive to differentiate themselves from competitors, more and more of them are realizing how Toronto’s diversity provides a competitive edge that businesses would be well advised to leverage.
Clearly, promoting diversity in the private sector can yield dividends; however, this is not to say that truly addressing diversity is easy or cheap. Roundtable participants emphasized how promoting diversity effectively means fundamentally altering workplace cultures: the “add diverse people and stir” approach does not achieve a whole lot.
Instead, promoting diversity requires systems changes; it requires buy-in from the top, from middle management, from recruitment teams and from human resource departments. Effectively investing in diversity requires surfacing, questioning, and transforming any number of implicit biases that we all unknowingly carry towards different kinds of people. Seriously investing in diversity takes time, resources, trust, and tremendous leadership. And, according to roundtable participants, those efforts are well worth it.