Walking the tightrope of a global economy is a difficult yet increasingly essential feat businesses must perform to thrive. Those that only cater to one audience have a greater chance of falling behind their competitors and losing market share.
Implementing sound leadership development is an important strategy to help businesses crack into diverse and emerging markets. Having leaders who understand how a diverse workforce fosters a larger consumer base might seem like common sense, but company executives often overlook the connections between diversity and leadership development, and the business suffers because of it.
A 2015 study, “Next Practices in Organizational Design and Leadership Development for D&I,” from the Institute for Corporate Productivity, or i4cp, details four key findings that advocate integrating diversity and inclusion efforts into a company’s leadership development:
Weaving D&I content into leadership curriculum.
Tapping internal resources for content, development, vetting and delivery.
Incorporating employee resources groups into the development experience.
- Tracking the impact of D&I-related training on leadership behaviors.
“If done well, you get people putting in their best efforts at work, you’re keeping everyone in the organization focused on the right goals and will make organizations work more effectively with global partners,” said Eric Davis, author of the study as well as creative director and senior editor at i4cp.
Improving diversity efforts within the company as well as in its target markets will increase business performance and revenue because employees will be more familiar with the demographic they are serving — targeted development options can help to facilitate this customized client engagement. “You have to have people who know your target market,” he said. “You have to have parity between your workforce and the markets that you want penetration in.”
But one of the underlying discoveries of the study is the importance of communication, Davis said. Executives should regularly interact with the customer-facing functions of a business, so they know the consumer preferences of their target market. From there, companies can make talent and business decisions that better reflect customer needs. More communication between employees who manage day-to-day operations and senior executives also will develop cooperation within the company and customer satisfaction without, he said.
The definition of diversity changes in different cultures, so global companies also must adapt their approach to leadership development depending on the workforce they are collaborating with. It is imperative for executives to communicate with these branches — instead of implementing one policy for the whole company — Davis said, because different workforces respond to policies uniquely.
To motivate business leaders to sustain diversity-centric training, executives should think of diversity goals in terms of business goals, such as market penetration or talent benchmarks to achieve. “Leaders respond well to that,” he said. “They will reach out to diversity programs to help them to achieve this business goal.”
High-performance organizations — classified in the study using a market index — are 2.5 times “more effective at leveraging diversity for business outcomes” and more likely to engage in behaviors that implement the study’s four key findings.
“It’s just something you have to do,” Davis said. “Most companies have learned to accept that, and it’s really only the laggards that don’t already follow that.”