As an African American financial advisor, depending on your firm’s setup, you might be asking, “Do we need cultural diversity in the workplace?”
If you work for a broker-dealer, there’s no question. True inclusion is necessary to improve the work environment for advisors of color across the board.
But what if you own an RIA? Is ensuring diversity within your team something you truly need, or would want, to consider?
According to the data, the answer is definitely still… yes.
As you’ll see below, diverse teams help us earn more revenue, get more clients, offer better solutions to our market, and outperform our competition.
We’re waiting for the rest of America to catch up. We know that diverse and inclusive work environments are more reflective of the REAL world.
Even though it’s typically more comfortable to hire team members that “look like us,” the best results and highest performance come when companies diversify. And of course, not diversifying to take advantage of the best skills of diverse team members, but to appreciate and learn from the different banks of talent, skill, and perspective each culture brings to the table.
Diversifying Affords Our Companies More Useful “Tools”
Consider Abraham Maslow’s Law of the Instrument, which he basically describes as “a cognitive bias that involves an over-reliance on a familiar tool.”
Applying that to the area of business, think of each of your team members as an expert at using a particular tool. Diversity makes us better because different tools (“perspectives”) allow us to fix — and create — more stuff.
Conversely, an over-reliance on the same tired “tools” creates a one-trackmindedness that excludes many valuable perspectives.
If you’re a hammer, everything looks like a nail.
But if your team includes a hammer, a screwdriver, a drill, AND a wrench… won’t you be able to solve a wider variety of problems?
But don’t take our word for it. Here’s the data showing how, generally speaking, intentionally creating an inclusive organization is the literal best way to serve our clients better, and earn more from our existing efforts.
23 Startling Benefits of Cultural Diversity in the Workplace: Backed by Science
- Groups of diverse problem solvers can outperform groups of high-ability problem solvers. [Nat’l Academy of Sciences]
- Diverse organizations consistently report more customers, on average, than non-diverse. [American Sociological Association]
- While homogenous teams are often more confident of their skills, diverse teams actually complete tasks more successfully. [Deloitte Insights]
- Though they think they work together less effectively, diverse teams actually provide better solutions to problems. [Assoc. Prof. Katherine Phillips, Northwestern U. ‘09]
- Diverse teams can stimulate creativity, spur insight, and increase efficiency. [Deloitte Insights]
- Diverse groups bring a greater variety of experience and views to decision-making processes… and then, they make better decisions [American Accounting Assoc.]
- Report: Racially and ethnically diverse companies outperform industry norms by 35%. [Forbes]
- Companies with the highest levels of ethnic diversity drive nearly 15 TIMES more sales revenue. [American Assoc. For the Advancement of Science]
- Report: Firms in the top quartile for ethnic diversity are 35% more likely to have financial returns above national industry medians [Diversity Matters, McKinsey]
- Report: Companies in the bottom quartile for ethnic diversity are less likely to achieve above-average returns. [Diversity Matters, McKinsey]
- Report: Racial and ethnic diversity has a stronger impact on financial performance in the U.S. than gender diversity. [Diversity Matters, McKinsey]
- Companies with more women in leadership get blockbuster results [Credit Suisse]
- Study: Teams containing more women had higher collective intelligence than both all-male teams AND teams with higher average IQs. [Harvard Business Review]
- Study: High-performance organizations are 2Xs as likely as low-performance orgs to emphasize diversity & inclusion at their highest levels, and more than 2Xs as likely to intentionally include people with IDD (intellectual & developmental disabilities). [Institute for Corporate Productivity]
- Study: As a company’s racial and gender DIVERSITY increases, its PROFIT relative to its competitors increases. [American Sociological Association]
- Study: Companies with a more diverse workforce consistently reported higher customer numbers than those organizations with less diversity among staff. [American Sociological Association]
- Study: For every ONE percentage increase in the rate of racial diversity up to the rate represented in the relevant population, there was an increase in sales revenues of approximately NINE percent. [American Sociological Association]
- Study: For every ONE percentage increase in the rate of gender diversity up to the rate represented in the relevant population, there was an increase in sales revenues of approximately THREE percent. [American Sociological Association]
- Study: Racial diversity was found to be a better determinant of sales revenue and customer numbers than company size, the company’s age, OR the number of employees at any given work location. [American Sociological Association]
- Study: Racial diversity was among the most important predictors of a company’s competitive positioning relative to other firms in its industry. [American Sociological Association]
- Study: Mixed gender teams are more generous and egalitarian, and teams with a larger percentage of women perform better by building meaningful relationships and creating successful work processes. [Harvard]
- Study: Teams with lower percentages of women have lower sales and lower profits than teams with a balanced gender mix. [Harvard]
- Study: Business teams with an equal gender mix perform better than male-dominated teams in terms of sales and profits. [Harvard]
The writing is on the wall:
Statistically speaking, and all else compared equally, diverse teams (and ethnically diverse teams in particular) will consistently earn more customers and more revenue than a gaggle of old white men–or brown ones.
So it’s something to be seriously considered.
As a people who are THE most negatively affected by the wealth gap, doesn’t it make the most sense to hire as many of us as we can who are well-qualified for the job?
We’re not saying it doesn’t. But building a team is a complex process that can’t be fairly addressed with a single homogenous perspective. (See what I did there…?)
We merely present the data to raise your awareness, and allow your firm to come to its own conclusion that works best for its own mission and goals.
If you already have a diverse team or are considering building one, like any other group, don’t allow yourself to forget that “diversity” isn’t about the numbers. It’s about the numbers AND our authentic intention. As a start, you can check our giant list of inclusive holidays for ideas on how to celebrate diversity in the workplace to make YOUR firm inclusive each day of the year.