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Diversifying leadership teams can increase both innovation and revenue

Diversifying leadership teams can increase both innovation and revenue
[Photo: istock]

If we needed another business case for diversity, here it is.

In a BCG survey of employees at more than 1,700 companies in eight countries, those who said there was above-average diversity on their management teams also reported innovation revenue was as much as 45% of total revenue versus just 26% at companies without diverse leadership. That’s nearly half of a company’s income generated by products and services launched in the past three years.

This translated to better financial performance overall.  EBIT margins at companies with diverse leadership were nine percentage points higher than those of companies with below-average diversity on their management teams.

The report found that even small changes to diversify the management can have an impact on the bottom line. For instance, hiring women to equal just 2.5% of the leadership team would result in a full percentage point increase in innovation revenue.

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