Why diversity is good for business and business schools
05 April 2023
Anant Upadhyay shares a personal perspective on the importance of diversity in the workplace and the business school.
There’s no doubt that diversity, equity and inclusion (DEI) are top of many business school students minds. The latest Tomorrow’s MBA study, published by CarringtonCrisp and EFMD, found 75% of respondents though it was very or extremely important that content on DEI was included in their MBA. The question for business schools is what does this mean?
If you aren't engaging with various demographics in the areas you serve, you're losing out on talent. According to a report published by McKinsey in 2020, the overall sentiment on diversity was 52% positive while on inclusion it was 61% negative. The data suggests that hiring diverse talent is not enough, it is the workplace experience that shapes whether people remain and thrive. Setting mindsets in business education and creating leaders who embrace DEI to accelerate their organisation is key to workplace success.
A company's success so often depends on its capacity for innovation. DEI initiatives can create an environment where all employees can flourish, giving their best ideas and abilities to help a company meet its goals. Businesses need a creative workforce with a wide range of skill sets which diversity offers.
Is it just about knowing these terms or is it really about accepting, respecting, and celebrating multiculturism?
Millennials are expected to make up 75% of the workforce by 2025, which will continue to be a driving factor for action on DEI. Given how highly valued diversity is among this group of workers, diversity should be a top priority for businesses hoping to draw in the best and the brightest candidates and for business schools in their faculty and the content in their programmes.
Business schools often struggle to attract and retain a diverse faculty, especially in terms of race and ethnicity. This can limit the perspectives and experiences students are exposed to in the classroom. According to a 2020 report by the University of Pennsylvania’s Wharton School, only 7% of full-time business school faculty members in the United States are underrepresented minorities (URMs).
In a world that is more concerned with social issues and levelling the playing field for marginalized groups, diverse teams are frequently more inventive and creative, leading to new ideas and solutions. Companies that value diversity often have better success expanding their customer base. A Boston Consulting Group study found that companies with more diverse management teams have 19% higher revenues due to innovation.
A report published by McKinsey in 2015 states, “In the United States, there is a linear relationship between racial and ethnic diversity and better financial performance: for every 10% increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8 percent.”
In the United Kingdom, greater gender diversity on the senior-executive team corresponded to the highest performance uplift in McKinsey’s data set, “…for every 10% increase in gender diversity, EBIT rose by 3.5 percent.”
As a young enthusiastic graduate, I strongly believe in respecting, treating equally, and celebrating all cultures. We all should at least try to understand different cultures and celebrate equality, diversity, and inclusion.