EMBRACING GLOBAL DIVERSITY:
OPPORTUNITIES AND CHALLENGES FOR LEADERS
Published in John Ben Shepperd Journal of Practical Leadership, Spring 2007, pg 127-133.
Today global diversity is on the minds of almost every CEO and other senior executives. For many multinational corporations, global diversity is one of their top strategic priorities. Presidents and CEOs speak passionately about the importance of global diversity to their companies and the compelling need for employees at all levels in the organization to understand and embrace it. Senior executives advocate that global diversity is not a “warm and fuzzy” pitch, but one that will influence the strategic positioning and financial future of the company, along their ability to attract global talent. A recent study at the University of Illinois shows a strong positive correlation between a racially diverse workforce and key performance indicators such as profits, sales revenues, customer base, and market share . The study showed that average sales revenue for companies with a diverse workforce was approximately $5.7 million, whereas the revenue of less diverse companies was approximately $3.1 million, while controlling other factors. In other words, simply being globally diverse provides companies with a significant competitive advantage. Diverse teams are also known to be more creative and prone to make bold decisions, which can further enhance the financial well-being and long-term growth of a company .
Global diversity is no longer just an American value; today it is a global mantra. World leaders and business executives from a cross-section of industries are strong advocates of global diversity. Leaders of nations and governments are taking to the podium to educate the masses about global diversity and its economic potential for business and industry, including global investments, tourism, education, manufacturing, and technology. Global diversity has therefore moved from a “feel good – do right” concept to one that is a strategic priority, almost in the same league with the holiest of all priorities, namely creating wealth for stockholders.
For example, General Mills capitalized on its diverse workforce to increase sales of one of its once lack luster products, Betty Crocker corn-muffin mix. It sought advice from its African-American employees who recommended repositioning the product and in particular, to showcase B. Smith, “the African American Martha Stewart,” according to the Wall Street Journal. Result? Sales increased by nearly 22% in under a year . PepsiCo is another multinational company that understands the financial prowess of global diversity, particularly diversity of products that are designed to meet a globally diverse customer base. It is estimated that in 2004 nearly one percent of the company’s 8% growth in global revenue came from products targeted at ethnic groups. For example, sales of guacamole-flavored Doritos chips took off with Hispanics while Mountain Dew Code Red appealed to African-Americans .
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