How Can Diversity Give a Company a Competitive Edge?
In today's global competitive arena, successful companies capitalize on diversity and inclusion as a source of competitive advantage. The target market of the company is far from homogeneous. Likewise, the workforce comes from different backgrounds, skills and aptitudes. Far from being a challenge, diversity can create competitive advantage by increasing innovation, acceptance and problem-solving capacity.
Companies, large or small, increasingly are operating at an international level. Even domestically, companies face a shifting demography along the lines of language, nationality, religion and race. As a result, customer expectations about the way the company should work are diverse, and the best way to gain acceptance of customers is to reflect the diversity of the customer base. For example, providing multilingual service and support improves customer satisfaction and opens up opportunities in different sectors of the market.
Diversity is not simply about having a heterogeneous workforce. Companies employ the concept in developing new products, services and business concepts. Managers increasingly realize that diversity of experience, opinion and background help conceive new ideas. Additionally, a diverse workforce ensures that product and service concepts do not conflict with different cultural values. Successful commercialization of innovative products and services is a vital route to competitive advantage.
Groupthink is an approach in which people in a small, cohesive team stick to their group's values and mentality to the extent that they do not consider realistic alternative views from outside. Groupthink leads decision makers to unanimity rather than to the best decision, something particularly disastrous in the face of multifaceted challenges and problems of today's competitive markets. Diversity and inclusion can fend off the dangers of groupthink by offering fresh blood and alternative solutions.
To build a competitive advantage based on diversity, the concept should pervade all operations and processes of the company. Diversity does not apply just to hiring processes; it is also relevant to promotions, decision making, product development and other organizational processes. Managers can develop diversity goals and conduct a gap analysis to compare company's current situation with the desired state.