How 'Diversity Fatigue' Undermines Business Growth

Recent research shows that companies with diverse leadership perform better, on both equity returns and earnings margins, than their nondiverse counterparts. Although the findings come from research on publicly traded companies, the same principle applies to private companies, says Shirley Engelmeier, chief executive of 11-employee consulting firm InclusionINC in Minneapolis and author of the new book, Inclusion: The New Competitive Business Advantage. She believes that intentionally building a diverse team is crucial for small ventures seeking to expand and sustain growth. I spoke to Engelmeier recently about how diversity initiatives have changed and what small employers can do to retool their hiring strategy. Edited excerpts of our conversation follow. A new McKinsey report shows that U.S. companies with the highest executive-board diversity had returns on equity 95 percent higher and earnings margins 58 percent higher, on average, than those with the least executive diversity. How does this kind of bottom-line analysis affect the push to increase workplace diversity? See full Article.