Involving people of different ethnicities in your business cannot be simply performative—not if you want to succeed.
In 2018, footwear giant Nike released an ad campaign to celebrate their 30th anniversary. One of the faces of their campaign was Colin Kaepernick—the former quarterback for the San Francisco 49ers who, before a match, kneeled in solidarity with African-American people who were being wrongly targeted by the American police force. Kaepernick had faced backlash for his public protest against racism; Nike faced backlash for supporting him. Nevertheless, Nike won more hearts than it lost.
The campaign made people realize that Nike stood for something; it supported justice for African-Americans. People were pleased by this. So much so that, following the campaign, the brand made US$6 billion and its stock price increased by five percent. This incident showed that consumers will value and support companies that stand for ethnic diversity; they will happily help them profit, too.
How does ethnicity impact entrepreneurship?
Inclusivity has been the buzzword across industries for a while now. Companies that were overwhelmingly “white” have had to reimagine their models to be more inclusive and encourage ethnic diversity. While they might have initially done it to appease the public, they would soon realize its advantages. As per a McKinsey study, 43% of companies with diverse boards witness significantly higher increased profits. They also see more innovation and collaboration in the workplace. When ethnic diversity merges with entrepreneurship, profitability and progress are guaranteed. So, here’s a look at the top five ways in which ethnic diversity can boost your business:
- Specialized skill-sets
According to a study by William R. Kerr and Martin Mandorff, smaller ethnic groups had higher rates of entrepreneurial concentration. It is because they specialize in certain skills, and are often better at them. Their niche skill-set can put your company above the rest.
- Greater financial growth
When you bring in people from different ethnicities, you pave the path for financial growth. A Harvard Business Review report noted a CEO saying, “The case for establishing a truly diverse workforce, at all organizational levels, grows more compelling each year…The financial impact—as proven by multiple studies—makes this a no-brainer.” Furthermore, a Boston Consulting Group report revealed that in companies with above-average diversity in leadership teams, the revenue was 19% higher due to greater innovation.
- Improved company culture
In organizations where there’s more diversity, there’s more engagement. According to a Deloitte survey, 83% of millennials reported feeling more engaged in an inclusive work environment. What’s more? They also make better decisions. Teams that comprised people of different genders, nationalities and ages made better business decisions almost 90% of the time. All-male teams, on the other hand, made better decisions only 58% of the time.
- Attract better talent
It is evident that people of different ethnicities bring skill and knowledge to the table. However, most of them will only come to the table if your company prioritizes diversity and inclusion. A 2020 Glassdoor survey showed that 76% of job-seekers value diversity and inclusivity initiatives at a company. It even plays a critical role in helping them decide whether they should take up a job or not.
- Be more effective
As an entrepreneur, your goal is to usher in results, increase profits and beat your competitors. An ethnically diverse workforce helps you achieve that goal. They are able to reimagine tasks and business processes in a way that no one else can. Plus, research shows that diverse employees are 70% more likely to capture new market opportunities for your business.
Ethnic diversity in the workplace cannot be solely a numbers game. Former PepsiCo CEO, Indra Nooyi, shared in an interview, “Diversity, getting the numbers in, is only one part of the story. Creating an environment that makes them feel included is another very important part of the story.” For that, she suggests going beyond just talking about diversity. She encourages companies to train employees and allow them to learn inclusive behavior. That’s the only way to establish lasting change.
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