Most diverse Companies

New research reinforces the business case for diversity. How can organizations implement diversity initiatives that make a long-term impact?

If companies want to prosper and retain their business advantage, they would benefit from having a diverse workforce, new McKinsey research finds. Of 366 public companies analyzed, those in the top quartile for

Companies in the top quartile for gender diversity are 15% more likely to have financial returns above their national industry peers.

While correlation does not equal causation – greater diversity doesn’t automatically mean more profit – the link indicates that companies committed to diverse leadership are more successful.

“More diverse companies, we believe, are better able to win top talent and improve their customer orientation, employee satisfaction, and decision making, and all that leads to a virtuous cycle of increasing return, ” states the report.

The research also suggests that other types of diversity such as age, sexual orientation and global mindsets, are also likely to bring some level of competitive advantage for companies that are able to attract and retain diverse talent.

How Do You Diversify Your Teams?
Diversity is a catchphrase that is, sometimes, more trendy than it is helpful. I’ve attended countless meetings, seminars, networking events all waxing lyrical about the importance of it. The world’s most innovative companies – Google, Facebook and Apple, spend corporate dollars and branding towards promoting gender and racial diversity at their organizations. Yet, when it comes down to actual numbers, very few companies have a workforce that reflect our nation’s demographics. In fact, tech companies are notorious for the lack of ethnic and gender diversity.

But fostering a culture of inclusiveness starts at the top, says Shellye Archambeau, CEO of MetricStream. The Silicon Valley-based governance, risk and compliance firm raised $60 million from investors last fall, and a total of $125 million since its inception in 1999.

Archambeau, who sits on Verizon’s Board of Directors, is also the first African American female CEO of a Kleiner Perkins venture-backed company.

MetricStream’s chairman Gunjan Sinha is of Indian descent, and the company’s U.S. workforce is now over 56% non-white. But diversity at the company has been a long and focused effort. Archambeau advises companies against investing in blanket diversity initiatives that end up being more like bandaids than fostering a cultural change. Here are three that impacted representation at MetricStream.

Set Targets not Quotas

For diversity to make a business impact, representation must show at the top, says Archambeau.

Archambeau says more companies should be aware of the types of candidates they hire at every level, but especially for leadership roles. “It’s worth asking ‘are we looking at women candidates when screening for the top positions. Are we looking at racially diverse candidates?’”