The Promise Of Gender Diversity …. It Makes Business Sense So Lets Do It!
It is an idea whose time has come and it starts with us and our cultural mind sets. Why, because it also makes business sense!
Gender diversity can be a key to business success and growth and is often a source of competitive advantage for organizations. The jewel in the crown is that diversity can increase the market value of companies. Investors often value firms that imbibe the best practice of gender diversity and can penalise firms that don’t. Other benefits from gender diversity range from improved employee relationships which are more cordial, more collaborative decision-making, improved company image and access to innovative ideas and talented workforce.
The process of gains from diversity is rather simple. Businesses need innovative thinking, diverse ideas, understanding of its customers’ needs and finally need to be able to create value for its stakeholders. Now, if to deliver all this a firm has a team of 10 people who think similar to each other, they hardly bring any value to a team as the team is likely to perform only as well as a single member team since all member will have similar ideas. This is where diversity adds value. So, when management teams consists of a diverse range of members, the team is likely to bring forth a range of ideas, solutions, management practices, add to the innovation, creativity, better and faster decision making etc. With all these benefits accruing from gender diversity, teams perform better leading to the better performance of the firm. Increase in revenues and profits is a natural outcome from these. Thus, by adopting gender diversity firms acknowledge the differences among genders and leverages their strengths thereby achieving their objectives more easily. Investors can see this connect clearly and thus value firms that adopt diversity best practices. While critics have questioned the causal relationship of productivity gains from gender diversity, research has established this causality beyond doubt. Thus a gender diverse management team can serve as an elixir for firms and makes simple business sense.
The WEF Gender Gap report (2020) reports countries like Iceland, Norway, Finland and Sweden to score highest in the gender equality while countries like Yemen, Syria, Iraq and Pakistan score the lowest. So are all these countries able to enjoy the benefits of this easily available elixir? Research provides some insights into this. For gender diversity to work women must feel psychologically safe in expressing their views and ideas. Research shows that idea generation is possible easily when team members feel safe in presenting their views and innovative ideas even if they may be contrarian.
Such environments are easily available in cultures in which there is a widespread normative belief that gender diversity is important. When cultures value women equally, women in such management teams feel psychologically safe in expressing their views and ideas without hesitation. So, the belief in gender diversity creates a sort of self-fulfilling cycle. But, if gender diversity is viewed as an obligation, or is only mandated by law, without it being accepted culturally, its benefits remain elusive. So, only those who truly believe in it can reap its benefits! It then becomes very clear which countries are more likely to benefit from gender diversity.
In the context of India, gender inequality at the workplace is highly prevalent. The WEF gender gap report (2020) finds that economic participation and opportunities for women in India are extremely limited with a rank of 149 among a total of 153 countries. Equally gloomy is the finding that representation of women in corporate boards or senior leadership roles is as low as 13.8%. The findings are suggestive of an opportunity lost for a nation in whose rich cultural heritage women are worshiped. It is time to seize the opportunity to realise the benefits of gender diversification in management by viewing women as powers to reckon with not only in temples but also in boardrooms. It is an idea whose time has come and it starts with us and our cultural mind sets. Why, because it also makes business sense!
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house