Is Diversity Good for Business? A Reflection

Mark’s dilemma

At a conference this week I met Mark, a management consultant who, many years ago, had been a junior manager in a nationalised industry. When he realised what I do, he was keen to tell me his tale of woe from nearly forty years ago: “I had a team of twelve people, of eight different nationalities – Irish, African, Afro-Caribbean, Asian, Polish I think, British… They included different Indian castes. We were a nationalised company, so recruitment was reasonably ‘equal opportunities’ – no problem there. Trouble was the Asians hated the Africans, the Africans hated the Afro-Caribbeans … and a lower caste Indian was in a senior position to a higher caste Indian, who did not accept her authority. It was a nightmare! When two new vacancies came up in my team:

“I have to be honest, I said to personnel “No more diversity please!…”

This line management challenge had clearly left a deep and disturbing enough impression upon Mark for his mind to flash back to it in an instant, triggered simply by the presence of an equality and diversity consultant. I am grateful to Mark for his openness, because it has given me another piece of the puzzle to help resolve the burning question that lies at the heart of the diversity debate: “Is diversity good for business?” Increasingly, I must report – as with so many of the big questions in life, the answer is neither “Yes” nor “No” but “Well, it depends…”

A dense and fiendishly complex, but very thorough, recent report published by the Government Equality Office The Business Case for Diversity, supports this view. I will return to their findings later, once we have looked a little closer at Mark’s predicament when he was a young line manager. In order to understand under what conditions diversity may be good or bad for business, we need to unpack what we mean by “equality”, “diversity” and “inclusion” – and Mark’s story can help us do this. At twenty-something, in the decade that produced the Equal Pay and Race and Sex Discrimination Acts, Mark found himself, thanks to equal opportunities recruitment, heading a team of suitably skilled, but very diverse people. Diversity had managed to get in the door.

Equal Opportunities and Equal Access

In today’s world this statement might seem unremarkable. But I remember my parents (Indians who arrived in Britain in the 1950s) recounting how my father was discouraged by his superior from applying for a more senior job because, he was told, “Our boys will never accept an Indian above them”. Mark’s story show that, in response to the women’s and anti-racist movements of the late sixties and seventies, ‘equal opportunities’ thinking was
“I have to be honest, I said to personnel “No more diversity please!”…” beginning to have an effect in the workplace – an effect underpinned by legislation. This thinking relied upon the idea of ‘levelling the playing field’ for groups of people who had historically experienced unfair and unfavourable treatment in attempting to enter the labour market, or during employment: women, relative to men, and minority ethnic groups relative to the ethnic majority.

“My dad… was told “Our boys will never accept an Indian above them”

We could say that this shift in thinking and practice has been a qualified success – yes, there is still a lot of poor and unfair practice in recruitment and people management, and the picture varies widely from sector to sector and business to business. But there has been a sea change in awareness and practice over the decades, which has established equality of opportunity as an important moral imperative and a building block of good business. With the growth in the influence of the disability equality movement, equality of opportunity has developed into an idea of equality of access – by removing barriers and hurdles which tend to exclude whole swathes of people, businesses can at a stroke improve equality of opportunity by increasing access – whether to employment or to goods facilities and services. This of course was the point of the introduction in the Disability Discrimination Act 1995 of a requirement for businesses to make “reasonable adjustments”. But the idea of equality of access goes far beyond disability, as it helpfully points us to the general question “What are the barriers to access for a particular group of employees or customers and how can we reduce them?”

Equality of access… does not tell you how to positively manage… diverse individuals

Though more sophisticated than equal opportunities, equality of access is still relatively impersonal – it looks at measure designed to tackle barriers, often at a group or collective level. It does not tell us how to positively manage, and bring the best out of, diverse individuals in order to form well-performing teams.

Dealing with Diversity

Once diversity gets in the door, equal opportunities and access policies – like equality legislation – provide a helpful and supportive context, and can be an important reference point and safety net when things go wrong. But they don’t really help in the ongoing management of diverse teams, or in cultivating a culture of inclusion. You might actually ask “Wouldn’t it be better not to allow diversity in the door in the first place?” This is a valid question – although to answer it we must leave aside the obvious morel objection (namely, do we really want to go back to a society that accepts that people’s life chances should be determined by their sex, colour or impairment, rather than their merit?).

In short: “Diversity Trumps Ability”

Here is where research can help us: Professor Scott E Page, at the University of Michigan, Ann Arbour,, has famously shown that, under reasonable conditions, diverse teams of non-expert people outperform homogenous teams of expert people in solving complex problems. In short: “Diversity Trumps Ability”.
What is interesting about Mark’s story is that, in his experience, these reasonable conditions do not seem to have been met: the team was a pressure cooker of conflicting world views, and Mark’s solution? “I used to ignore it – not give it any credibility”, he said, “and just tell them to get on with their jobs”. What else was a manager, unfamiliar with the complexities of inter-ethnic tensions into which he had been thrust, and lacking in support or training from his employer, to do? And here’s the rub: diverse teams can only out-perform homogenous teams if they are a team, rather than a group of warring individuals, who practice an uneasy truce for the 8 hours a day they are in work together. And this is where the practice of skilfully managing diversity really comes into its own.

…diverse teams can only out-perform homogenous teams if they are a team,rather than a group

of warring individuals, who practice an uneasy truce for the 8 hours a day they are in work together

In order to unlock the phenomenal potential for innovation, creativity, problem-solving and productivity inherent in a diverse team it is important to meet the fundamental conditions of managing diversity well. This means ensuring that: individual talents are recognised, fostered and put to work; the team listens to and includes every individual’s perspective, including perspectives of those in a minority; and, crucially, that everyone is clear about, and signed up to, the common task and the common values of the team and organisation.

These conditions set the scene to free potential for productive, new, ways of thinking, and for unforeseen synergies, leading to performance which cannot be matched by a team of, even expert, people of homogenous backgrounds and characteristics. The management skill set implied by this set of conditions is supported by equal opportunities and access thinking and practice – but is also quite distinct from it.

An intelligent focus on diversity, in the context of successful equal opportunities and access practices, allows businesses to tap into the unlimited power of motivated individuals working together – and putting their combined diverse talents at the service of the common goal of company success (however that is defined). If Mark had been supported to develop this skill-set, through coaching and training or – better still – by observing, or being mentored by, more experienced managers around him, he could have unlocked the potential of his team – rather than investing so much energy in suppressing their differences so they could perform adequately.


It is this consideration which leads us, finally, to turn our attention to the question of inclusion. In order for a business to mine fully the rich seam of diversity, it needs to treat diversity as a core resource – and to plan proactively to put it to work. Businesses need to anticipate and expect diversity – both among the workforce and customers – and think ahead about how to both attract it (widen markets, widen the pool of talent from which employees are drawn); and to manage and keep it once it ‘gets in the door’. This is where inclusion comes into its own. Inclusion can be seen as a set of practices which enable a business to engage with, attract, involve and reap the benefits of diversity for the good of all: customers or service users, business owners (shareholders or the public), the wider community and of course employees, including beleaguered managers like Mark.

If Mark had been supported to develop this skill-set, he could have unlocked the potential of his team – rather

than investing so much energy in suppressing their differences so they could perform adequately.

This all sounds very involved, you may think, so why bother? Apart from the obvious moral and ethical benefits, there is a strong business case, supported by growing evidence from all sectors. It goes like this: because if you do diversity well, you will help achieve your true potential as a business, and you will outperform competitors who do not recognise the value of diversity.

The GEO report corroborates our observations over many years of working with very different businesses:


At the Equality Academy, we help businesses devise and implement their business case for equality, diversity and inclusion. Our new Power of Deep Equality residential courses help equip leaders with the skill-set to make the most of diversity for business success.