According to some Fortune 500 diversity executives, the answer is a resounding YES! In a 2012 Forbes article, the author Glenn Llopis interviewed executives from Walgreens, EMC, Abercrombie & Fitch, and McKesson seeking answers to the question. He asked questions seeking insight into how the companies assure that their diversity and inclusion efforts are directly tied to driving bottom line business results. The article followed a 2011 Forbes Insight survey of 300 multi-national executives in which 41% identified the ‘failure to perceive the connection between diversity and business drivers’ as a barrier to developing and implementing an effective diversity strategy.
Abercrombie & Fitch and EMC
In the article, Abercrombie & Fitch described driving what the executive called “diversity champion behavior” by in-store employees to drive ROI. EMC shares details about their diversity best practices with their clients to help develop relationships that support their business goals. They also use diversity talent retention metrics and their employer brand’s ability to attract diverse talent to measure D&I Return on Investment. Walgreens and McKesson also agreed that Diversity and Inclusion is treated as a profit center for their enterprise to flourish.
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This point of view report from Deloitte Consulting shares survey results of 506 U.S. organizations that showed that companies with greater racial and gender diversity performed better in terms of sales revenues, number of customers and market share. For example, a one unit increase in racial diversity increased the number of customers by more than 400 and 200 for gender diversity; and a one unit increase in racial diversity increased sales revenue by 9% and 3% for gender diversity.
McKinsey conducted a survey of 180 publicly traded companies in France, Germany, The United Kingdom and The United States, focusing objectively on two diversity categories (women and foreign nationals) on senior teams. The results of this study released in 2012 showed a consistent link between diversity and financial performance. For companies in the top quartile of executive-board diversity, returns on equity (ROE) were on average 53% higher, and the earnings before interest and taxes (EBIT) were an average of 14% higher.
Looking to introduce, troubleshoot, or optimize a diversity and inclusion program? This information can get you started in the right direction.