This “think piece” is designed to stimulate your thinking about diversity
Why Your Firm Needs to Target Diversity in Sales, Service, & Product Development
Research studies have shown that diversity can result in as much as a double-digit increase in sales. However, corporate executives need to realize that if you want to maximize your business impacts from employee diversity even further, you need to know three things. They are:
This high-business-impact approach outlined here is what I call “customer reflection diversity.” The name is appropriate because the goal is to specifically target the type of diversity that an organization needs in order for its workforce to reflect its diverse customer base. A workforce that has diversity in key positions that reflects its customer base can significantly increase customer satisfaction and sales.
Let me warn you that if diversity is a highly emotional issue with you, you might want to stop reading because this article challenges conventional thinking. I acknowledge that many firms primarily champion diversity for legal reasons, in order to right social injustices, or because “it’s the right thing to do.” But in addition to those completely valid reasons, a firm can also strive to increase diversity so that it reflects its customers because that approach will result in much higher business impacts.
Let’s start with an illustrative example highlighting just one of the three targeting factors; i.e., where in your organization do you need to have diversity. Having diverse salespeople will have much greater business impacts than having, say, a diverse maintenance staff. When you have diverse employees in jobs, like sales, that frequently interact with your diverse customer base, your customers will be more comfortable and trusting. Having diversity in other job families, like maintenance, makes less of a difference because there is no direct customer interaction or impact.
Let’s next take customer service as an example. If you have diverse workers in customer service, their empathy, ability to communicate, and the fact that your customers feel comfortable interacting with them will increase your overall customer service scores. And in one final area, having diverse workers in product development will increase the likelihood that your products will meet the needs of your diverse customer population. So, if you are the least bit intrigued about the possibility of adding a “targeted diversity” effort that reflects your customer population, the next three sections will cover in detail more about the why, where, and who.
Several studies have shown a positive correlation between overall workforce diversity and improved business results. However, if you want to increase your business results, even more, executives should ask themselves: “Why does having a diverse workforce improve business results?” Well, the foundation answer is that when your employees reflect or match the diversity categories of your current and desired customer base, there are many positive impacts that occur when they interact.
The customer impacts resulting from customer reflection diversity
And as a result of these customer impacts, when your diverse employee base is interacting with your matching diverse customer base, your firm gets increased customer satisfaction and more sales. When the diversity of your product and service process development teams also reflect the diversity of your targeted customers, your products and service processes are more likely to align and fit the needs of your customers. If your managers don’t listen to, learn from, and act on the ideas of their diverse employees, many of the business impacts will be reduced.
Interactions spread an understanding of diversity
In addition to the above-listed customer benefits, there are fortunately some additional impacts. One added impact is that when your employees work with and continually interact with employees from other diversity categories, these employees learn from and are influenced by them. Having a diverse manager can also assure that everyone on the team works to develop more empathy and understanding for the unique needs of every category of your diverse customers. Taken together, over time having most segments of the customer population represented by employees will result in the unique needs of each segment being better met. Once you fully understand “why” diversity works, the next question is where (in which job families) diversity has its highest impact.
It’s never a bad idea to have diversity everywhere. However, at least initially, it makes business sense to target the jobs that have the highest business impact when they are filled with diverse employees. The two common criteria for identifying these jobs are the importance and frequency of the customer’s interactions with your employees and the extent to which the position impacts the design of products and services. At most firms, the job families that I have found to have the highest impact when they are filled with customer-reflection-diversity employees include:
Once you identify the job families that have the most customer interactions and the highest impact on product development, as much as possible you need to target your diversity hiring into those positions.
At least in the U.S., most diversity efforts have been focused on recruiting and retaining people of color, people of various national origins, and women. Obviously, to meet legal obligations in the U.S. you must continue to target those groups. However, in addition, make sure that the categories of diverse employees that you attract and retain also reflect your customer base. In order to ensure that your employees reflect your targeted customers, identify the different demographic groups that make up your current and desired customer base. This expanded definition of your target diversity group will cause some political problems, but it is still necessary if you want to maximize your impact. Some of the expanded diversity categories that you might need to seek out in order for your employees to reflect the demographic and other characteristics of your customer base include:
If your goal is to maximize the business impacts from diversity, make sure that the employees in your high-diversity-impact jobs reflect or match each of the major demographic groups that occur in your current and targeted customer base. Obviously, managing a wider array of diverse employees will be more difficult, so you may need to upgrade those that manage the targeted job families.
The primary goals of any “customer reflection diversity effort” are threefold: to ensure that every executive, manager, and employee fully understands why diversity impacts results, what positions diversity has its highest impact, and what categories of your diverse customers need to be proportionately represented.
Nothing in this piece suggests that you need to abandon your current diversity efforts. Supplement those efforts with a targeted diversity effort that ensures that your employees in key jobs “reflect your customer base.” The result will be improved sales, customer service, and products that better reflect the needs of all of your customers. If you’re not convinced of the potential business impacts, take a team of salespeople and change the employee mix of the team so that it more accurately reflects your customer base. And then don’t be surprised when your sales results improve in a few short months.
And one final warning; you can’t attract diverse groups of employees without great recruiting. And unfortunately, in my experience, I have found that 99 percent of corporate HR processes are not up to the task because they are not data-driven. Without data, you will not be able to attract, hire, and retain the needed diverse employees. So at the very least, you need to completely revamp your diversity recruiting and retention efforts, and then begin to measure and reward managers who are responsible for the targeted jobs when they reach their customer reflection diversity goals. Thanks for reading, and I hope that I’ve stimulated your thinking to the point where you will at least consider supplementing your current diversity approach. If you have follow-up “how to questions” I can be reached at JohnS@sfsu.edu or comment below.
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