Why Diversity: Profits

McKinsey's January 2018 report "Delivering Through Diversity", Re-examined the business case for inclusion and diversity, and found:

  • ƒ The relationship between diversity and business performance persists.
    The statistically significant correlation between a more diverse leadership team and financial outperformance demonstrated three years ago continues to hold true on an updated, enlarged and global dataset.

  • ƒ Leadership roles matter. Companies in the top quartile for gender diversity on executive teams were 21% more likely to outperform on profitability and 27% more likely to have superior value creation. The highest performing companies on both profitability and diversity had more women in line roles (i.e., typically revenue-generating) than
    in staff roles on their executive teams.

  • ƒ It’s not just gender. Companies in the top quartile for ethnic/cultural diversity on executive teams were 33% more likely to have industry-leading profitability. That this relationship continues to be strong suggests that inclusion of highly diverse individuals – and the myriad ways in which diversity exists beyond gender (e.g., LGBTQ+, age/generation, international experience) – can be a key differentiator among companies.

  • ƒ There is a penalty for opting out. The penalty for bottom quartile performance on diversity persists. Overall, companies in the bottom quartile for both gender and ethnic/ cultural diversity were 29% less likely to achieve above-average profitability than were all other companies in our data set. In short, not only were they not leading, they were lagging.

Click here to read the full report.