The following My View, My Voice column was authored by Patricia Brown, ASUG Editorial Director.

For leaders and professionals who care about the future of their business, and those focused on ensuring their profitability, discussions about diversity should be front and center in our increasingly competitive, labor-constrained economy. Examined strictly through the lens of practical business outcomes, it’s difficult to miss the conclusion that diversity driven by a rich mix of gender, racial, and cultural perspectives is good for business.

Each year, Women’s History Month gives us a valuable opportunity to step back and examine these issues more closely. While this is an excellent time to recognize and celebrate the contributions and achievements of women throughout history, the month of March also provides a platform for advocacy and activism related to gender equality and inclusivity. This year’s theme, “Women who advocate for equity, diversity, and inclusion,” is particularly important, as it recognizes the need to be proactive in our efforts to eliminate bias and discrimination from our lives, institutions, and corporate organizations.

It turns out that having professionals from all types of backgrounds represented across corporate organizational charts isn't just about meeting quotas and being politically correct: it's about leveraging the workforce’s full potential to drive innovation, growth, and success. It’s also about benefiting the bottom line.

Indeed, a 2020 McKinsey & Company analysis, outlined in the report Diversity Wins: How inclusion matters, underscored previous findings (published in 2015 and 2018) illustrating the hard-nosed benefits of diversity in the workplace. Specifically, analysts found that companies in the top quartile for gender diversity in executive teams were 25% more likely to have above-average profitability than companies in the fourth quartile, up from 21% in 2017 and 15% in 2014.

For those participating in the innovation economy, by developing–or for that matter, implementing–the hardware, software, and infrastructure technologies transforming every vertical industry, the benefits of diverse perspectives in the workplace are even more compelling.

According to a Boston Consulting Group (BCG) study of innovation in the tech industry, "How Diverse Leadership Teams Boost Innovation,” companies with more diverse leadership teams reported higher innovation revenue (that is, the proportion of revenue derived from innovative products and services).

Evidence of diversity’s game-changing value within the innovation economy has been building for well over a decade, prompting institutional investors to begin paying attention. Credit Suisse’s 2021 Gender 3000 report examined the relationship between gender diversity in leadership and financial performance across various industries, including the technology sector.

The report finds a positive correlation between increased gender diversity in leadership positions and increased returns on capital, Environmental, Social and Governance (ESG), and stock performance. The report reveals that diversity continues to improve globally with an approximate average of 24% of women sitting in corporate boardrooms, of the over 3,000 companies analyzed across 46 countries.

Ignoring diversity has an equally clear downside. The Tech Leavers Study, conducted by the Kapor Center for Social Impact, illustrated a series of negative consequences associated with homogeneous cultures in tech companies, including:

  • High turnover rates resulting in increased recruitment and training costs for companies, disrupting continuity in projects and teams.
  • Loss of talent and expertise hindering innovation and problem-solving, and diminishing competitiveness.
  • Recruitment challenges for tech companies that develop a reputation for lacking diversity.
  • Innovation stagnation, because of a limited range of perspectives and experiences represented in the company, prompting tech companies to miss out on opportunities for breakthrough innovations.

It’s important to point out that many of the studies cited in this article were conducted before the pandemic and the ensuing “Great Resignation.” The benefits of promoting diversity, and the consequences of overlooking its importance, have only become more acute as the shock to conventional workplace practices results in permanent changes to the way we work.

Add to this the fact that, despite Herculean efforts to put a dent in demand for labor, unemployment remains below the 4% mark. Given the data, it becomes difficult to see how any organization can take for granted any member of the workforce.

Patricia Brown is ASUG Editorial Director.

ASUG will continue the conversation on equity, diversity, and inclusion throughout the month and beyond through our Women Connect program. ASUG Women Connect is dedicated to promoting equity and providing resources for all members of ASUG, with the goal of fostering diversity inclusivity, facilitating professional growth, empowering the development of leadership skills, and modeling effective allyship among SAP technology professionals. Through in-person networking sessions, virtual community conversations, and additional ASUG insights, all ASUG members are invited to get involved.

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