Diversity and Resilience: What the Research Says

As you might know, DRJ recently began working on a new initiative to promote greater diversity and inclusion at the publication and our conferences. Our larger hope is that we might be able to contribute toward increasing diversity in business continuity overall.

As I explained in announcing the initiative, there are three main reasons why we think improving diversity, equity, and inclusion (DEI) in BC is important: it’s the right thing to do, it’s the prudent thing to do, and it leads to higher performance.

The first two reasons are almost self-evident.

Members of certain groups have traditionally been underrepresented in the wonderful field of BC, and it’s time they were included on a full and equal basis. In the current environment organizations that hold outdated attitudes on race, gender, and related issues run a high risk of creating serious problems for themselves.

However, the third reason isn’t necessarily as obvious.

The phrase “diversity makes companies stronger” has been repeated so often by DEI advocates it’s become a mantra. I have used it myself, in one form or another.

However, just insisting something is true, even something you wish to be true, does not make it true. Simply declaring diversity is beneficial to the organization is not likely to win over DEI skeptics. It it’s not even likely to convince open-minded people if, as sometimes happen, their first-hand experience of DEI has involved embarrassment, social friction, or the need to attend time-consuming training sessions.

Fortunately, we have more to go on than the assertions of believers like me that diversity in an organization is an advantage. A number of studies have found organizations with a more heterogenous work force tend to be more profitable and resilient than their less diverse peers.

One such study was carried out by McKinsey & Company and described in their report “Diversity Wins: How Inclusion Matters,” published in 2020. That study looked at data covering more than 1,000 companies in 15 different countries.

McKinsey’s survey found “companies in the top quartile of gender diversity on executive teams were 25% more likely to experience above-average profitability than peer companies in the fourth quartile.”

Positive benefits were also found in the case of ethnic and cultural diversity. Companies in the top fourth in that type of diversity outperformed those in the bottom fourth by 36% in terms of profitability in 2019.

The study concludes by saying, “greater diversity, in terms of both gender and ethnicity, is correlated with significantly greater likelihood of outperformance.”

The report, which highlights the diversity success stories of Citigroup, Target, and Lockheed Martin, describes diversity and inclusion as “an essential enabler of recovery, resilience, and reimagination.”

For anyone working in the field of business continuity, the presence of the word “resilience” in a list should have special resonance.

Another study which came to a similar conclusion as McKinsey’s report was done by Cloverpop in 2017.

That study is described in an article in Forbes called, “New Research: Diversity + Inclusion = Better Decision Making At Work,” by Erik Larson, Cloverpop’s CEO. (The white paper presenting the findings in detail in available here; registration required.)

Cloverpop looked at some 600 business decisions made by 200 different business teams at a variety of companies over two years. It found “a direct link between inclusive decision making and better business performance.”

Specifically, the study found diverse teams make better decisions up to 87% of the time and “decisions made and executed by diverse teams delivered 60% better results.”

“Cloverpop’s research bolsters the case that employers who build diverse and inclusive teams see the best outcomes,” concludes Laura Sherbin, CFO and Director of Research at the Center for Talent Innovation, according to Forbes.

Next there’s “How Diversity Makes Us Smarter,” by Katherine W. Phillips, in Scientific American, from 2014. She surveyed decades of research from organizational scientists, psychologists, sociologists, and economists to see what could be learned about the impact of diversity on organizations’ ability to function.

She concludes, while social diversity can cause “discomfort, rougher interactions, and less cohesion,” it also correlates strongly with innovation, greater preparation, and greater diligence.

She offers an analogy I found very interesting, comparing the discomfort associated with diversity to the pain we experience when we begin exercising. “You have to push yourself to grow your muscles,” said Phillips. “The pain, as the old saying goes, produces the gain. In just the same way, we need diversity—in teams, organizations, and society as a whole—if we are to change, grow, and innovate.”

Phillips concludes: “If you want to build teams or organizations capable of innovating, you need diversity. Diversity enhances creativity. It encourages the search for novel information and perspectives, leading to better decision-making and problem-solving. Diversity can improve the bottom line of companies and lead to unfettered discoveries and breakthrough innovations.”

Here’s one more study, the last one I’ll mention. It’s “The role of diversity in organizational resilience: a theoretical framework,” by Stephanie Duchek, Sebastian Raetze, and Ianina Scheuch, published in 2019 by science publishing website Springer. The authors stop short of making any sweeping claims about how diversity impacts resilience; they say more research needs to be done. However, they do offer the observation, “there are preliminary indications that diversity could play an important role in the development of resilience in organizations.”

Obviously, these studies won’t resolve anything. I don’t mention with the intention of ending the discussion, only of contributing to it. At any rate, they put some meat on the bones of the claim “diversity makes organizations better.” I encourage anyone interested to click on the links and explore the studies for themselves. One last thing (and here we swing from the big picture back toward bread and butter): Many of the surveys mentioned above note the importance of diversity in the broadest sense, including diversity of thought and experience. I share the belief this type of diversity is important. For that reason, I’m proud DRJ’s spring and fall conferences regularly feature more certified professionals, more 10-plus-year attendees, and more BC newcomers than any other BC event. If you want to attend a BC conference with that type of diversity, you won’t want to miss our 69th conference Sept. 10-13 in Phoenix.

ABOUT THE AUTHOR

Bob Arnold

Bob Arnold is the president of Disaster Recovery Journal.