The Importance of Diversity for Small Businesses
2020 was a chaotic year rife with unprecedented challenges for businesses. Companies that wanted to survive, let alone thrive, had to adapt to the rapidly changing circumstances and regulations. As we enter 2021 a focus on diversity, equity, and inclusion (DEI) is essential to remaining competitive.
In this article, we will focus on how a DEI-focused mindset will enrich your small business, connect you to your customers, and benefit your community. We’ll also focus on practical ways businesses can embrace diversity and the potential challenges along the way.
1) It Provides Your Company With a Different Perspective
As humans, we all have a perspective that is limited to our life experiences. When you have a homogenous group, like the European fintech industry, they often approach the problem with a similar approach. Individuals from diverse backgrounds have different ways of achieving the same results. And in many cases, this may provide a better way of solving the problem. When your company has a diverse team, you better understand your customer demographics. Using this demographic information and understanding, you can better serve your customers, enhance the customer experience, and expand your client base.
You can enhance your company’s ability to innovate and respond to challenges with a diverse team that brings different viewpoints, ideas, and ways of solving problems and looking at new opportunities.
2) It Enhances Your Talent Pool
Training your employees, especially those from diverse backgrounds, allows you to identify which team members have the potential to grow within the organization, especially when given support. Individuals from marginalized populations may not have had the opportunity to get the education and training they need to take their careers to the next level.
Alternatively, this worker may not have ever imagined it was possible, because they never saw anyone who looked like them in their dream position. Investing in the education of an employee not only adds value to your company but can strengthen their loyalty to your organization.
3) It Can Create Better Vendor Relationships
Last year, pharmaceutical giant Biogen announced that they were moving $10 million in funds to OneUnited Bank, one of the nation’s largest Black-owned financial institutions. This was part of Biogen’s commitment to DEI.
Connecting with your vendors on a level that goes beyond business accomplishments builds long-lasting, mutually beneficial relationships that can help close the racial wealth gap.
4) It Strengthens Your Company’s Culture of Teamwork
By opening your mind and giving voices to the people within your company you’re signaling that you value teamwork. Listening to all people, especially those who have been historically silenced, creates an environment of respect, communication, and the free exchange of ideas.
Of course, having diverse voices within your company’s structure does not come without challenges. Trying different ideas, or hiring and promoting people from outside the traditional pool of candidates, can lead to approaches with varying degrees of success.
Thankfully, as the achievements of companies from Silicon Valley have taught us, the concept of “failing fast” can push your company to the next level. Get rid of your fear of hearing diverse voices and trying different approaches! Understand that while some may not work others may prove to be a big success. You won’t know until you try.
Having a diverse team that is not afraid to innovate and shift strategies is superior to having a group of homogeneous individuals and seeing your company stagnate.
5) It Connects You to the Community You Serve
A company’s commitment to DEI should include involvement in its community. When your customers see that you are investing in their community’s success -- not just looking to sell them something -- you can open up a conversation to help meet their needs.
For example, last year the U.S. Bank pledged $116 million in investments in their area to help battle economic and racial inequalities. By empowering the people they serve, they strengthen their business relationships within their community.
A focus on DEI isn’t just a moral principle. It’s a practical step that can greatly enhance your company’s success and ability to compete.
Hiring diverse people and allowing them to have a voice within your company can bring new perspectives and viewpoints. This is an invaluable asset to have in the modern world and one that should be integrated into your company’s everyday core values.
Copyright © 2023 SCORE Association, SCORE.org
Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.