Lack of Diversity: Here’s What’s at Stake

It is the everyday task of the business owner to be consistently weighing the costs of their company. Though typical costs are easily accounted for, some costs may be easy to forget. In 2020, companies cannot afford to not place an emphasis on Diversity, Equity, & Inclusion. Do not discount these as unnecessary, or assume that your company is exempt, or even that your company does not need to look into it further because your employees aren’t outwardly expressing concern or not generally problematic.

Issues with the lack of diversity, equity, and inclusion show themselves in a variety of ways. It may show up as an employee making what they believe to be innocuous comments to another employee or a customer. It may look like an advertisement or a product that offends your customer base and lands your company on the news and an international boycott list.

The time to address the lack of diversity in the workplace is now- before it leads to massive losses and bad representation in the public eye. Still not convinced that this is necessary? Take a look at a few companies who have recently learned this lesson the hard way.

Examples of Lack of Diversity Leading to Major Losses

H&M recently learned the importance of having a diverse team to look at products before allowing them to be advertised and put on their shelves. Unfortunately, this is a lesson they learned the hard way- at the cost of tens of thousands of customers, millions of dollars in losses, and the image of their brand.

After using a black child as the model for a T-shirt with the phrase “coolest monkey in the jungle” on the front, celebrities such as LeBron James and Diddy have spoken out against the clothing company. Even following their formal apology, they lost collaborators and a number of customers. This was a particularly bad time for the brand to be hit with another loss, as it had reported its largest decrease in quarterly sales in more than a decade the previous December.

After initiating a mandatory racial-bias training across 8000 stores and its corporate office that will close the doors for a four-hour period, Starbucks suffered an approximate loss of $12 million dollars. The need for such a drastic, company-wide measure came following incidents inciting outrage amongst its customers. One of these incidents involved two black men waiting for a third member of their party to join them and were harassed by the Starbucks manager. The company hoped that the loss would pay off in the long run, by informing their team of employees across America to do better.

This issue is still developing, being one of the most recent examples. The Richards Group may not be a name you’re immediately familiar with- but it’s America’s largest independent advertising agency that has worked over the years with nearly all of our country’s biggest brands. This is the marketing group responsible for Motel 6’s catchphrase, “We’ll leave the light on for you”, the group who has created multi-national, widely successful campaigns for industry giants such as Home Depot, Dr. Pepper, and the Salvation Army.

However, early this month, the founder of the group, Stan Richards, was quoted as calling an ad pitch “too black” for Motel 6’s “white supremacist constituents” in a Zoom meeting. Following this, the motel chain ended its relationship with the marketing group that same day. Since then, clients Home Depot, Dr. Pepper, and Keurig have followed suit. Stan Richards has decided to leave the agency he founded due to the fallout, which is still continuing.

The Benefits of Having Diverse Teams

The numbers are here to prove that having diverse teams can positively impact your bottom line. Decisions made and executed by teams that are diverse have been found to deliver 60% better results. A 2017 study found diversity in the workplace to be a major driver of innovation, producing 19% more revenue than non-diverse teams.

A Variety of Perspectives 

Diversifying your team brings a variety of world views into your workplace, generating newer ideas, an innovative approach, and new ways to tackle issues. These perspectives can allow your company to cater to a larger customer base. Without employing people of different nationalities and backgrounds, how can you know what products and services they may be looking for? 

A Boosted Reputation

The world is smaller than it has ever been thanks to the internet, the ease of travel, and lightning-fast communication. No longer are customer bases or local communities entirely made up of just one group or another. Create a workforce that reflects your community. It will not only engender goodwill but will also give you a reputation for inclusion. 

More Eyes on Products

This benefit is key to avoiding the embarrassing fallout experienced by the groups in the examples above. For H&M, it would have taken just one employee in the room where those decisions were being made to stop that situation from happening. Your team needs a diverse set of eyes so that if something is occurring that’s going to offend a group of people somewhere, they are able to speak up and put a stop to it.

A lack of diversity and inclusion can cost your company an untold amount of financial and reputational losses. Get ahead of this issue by making your focus on creating an atmosphere of diversity, equity, and inclusion. This is the way our world is headed- be a leader and take charge now.