Diversity and Cultural Awareness Make Good Business Sense
Those who perceive diversity as exclusively a moral imperative or societal goal are missing the larger point. Workforce diversity needs to be viewed as a competitive advantage and a business opportunity. That’s why many organizations have made diversity a business priority and are striving to achieve a fully inclusive, diverse environment.
Diversity is about recognizing, respecting and valuing differences based on ethnicity, gender, color, age, race, religion, disability, national origin and sexual orientation. It also includes an infinite range of individual unique characteristics and experiences, such as communication style, career path, life experience, educational background, geographic location, income level, marital status, military experience, parental status and other variables that influence personal perspectives.
These life experiences and personal perspectives prompt organizations to react and think differently, approach challenges and solve problems differently, make suggestions and decisions differently and see different opportunities. Diversity, then, is also about diversity of thought. Superior business performance requires tapping into these unique perspectives.
As organizations’ customer bases become steadily more diverse, significant portions of their future growth must come from tapping into these diverse markets. If we are to form lasting business relationships with our customers and become a true global leader in the industry, we must understand our customers’ diverse cultures and decision-making processes, not merely their languages.
Once largely homogeneous groups, the faces of customers, claimants, producers, employees and suppliers have been transformed into a dynamic mix of people composed of various races, cultures and backgrounds. Clearly, the U.S. population—and the world’s—is changing dramatically. Forward-looking companies that recognize and understand the implications of these demographic shifts accordingly alter their customer focus, employee base and business practices to better manage the needs of current and future customers and employees.
If we disregard the data on changing demographics, we also disregard the substantial growth in buying power of diverse markets. Not only are these diverse minority groups increasing as a percentage of the U.S. population, but so too is the buying power they wield. From 1990 to 2014, minority group purchasing power grew from $661 billion to $3.4 trillion. This is more than double the growth of total U.S. buying power.
This economic clout is not limited to ethnic minorities. According to a press release from Witeck Communications from June 2015, “The combined buying power of the U.S. lesbian, gay, bisexual and transgender (LGBT) adult population for 2014 was estimated at $884 billion …” That is a significant number, considering that it is estimated that in 2014, only 6 – 7 percent of the adult U.S. population identified as members of the LGBT community.2
Women should not be forgotten either. In a Forbes.com article by Bridget Brennan, it is stated that “Women drive 70-80% of all consumer purchasing, through a combination of their buying power and influence. Influence means that even when a woman isn’t paying for something herself, she is often the influence or veto vote behind someone else’s purchase.”3 The bottom line is that present and future monetary power of diverse markets is growing more apparent each year.
In order for companies to remain competitive for talent and for customers, it is imperative that they attract and value diverse talent and enable that talent to attract and value diverse customers.