Beyond Buzzwords: Diversity Is Good for Organizations and Their Shareholders

Editor's note: Posts published on From the Workplace are written by outside contributors and do not necessarily reflect the view or opinion of SHRM.

While I might be unique as a chief revenue officer with a Ph.D. in communication, the connection is clear. Sales thrive on persuasion, relationship building, and group decision-making — skills my academic background has consistently informed over the past 25 years, from crafting pitches to motivating teams.

Long before inclusion and diversity became a corporate talking point, I intentionally built sales teams with diverse backgrounds, mirroring the cultural, experiential, and economic diversity of our operating communities.

Fueling Superior Results

This wasn't about politics; it was about science. Decades of research show that heterogeneous work groups — diverse in age, gender, culture, and more — outperform homogeneous ones. They are more effective decision-makers who make more accurate judgments, demonstrate higher levels of creativity, and operate better in uncertain environments.

My experience confirms this. At a company where I inherited a sales team largely built on internal networks, I found a homogeneous group in terms of geography, economics, education, age, and appearance. While effective within a narrow market segment, they struggled to connect with a significant portion of potential customers. Product review feedback highlighted a critical issue: prospects perceived the team as arrogant and aggressive, deterring them from considering the product due to concerns about the vendor relationship.

The following year, I consciously broadened our candidate pool. While heterogeneity wasn't the sole hiring criterion, the resulting team was significantly more diverse. Their performance spoke volumes: a 32% increase in revenue compared to the previous year.

Today, discussions around this kind of team building often get bogged down in labels — diversity programs, inclusion initiatives, "woke DEI." Stripping away the rhetoric reveals a simple truth: it's good business. This team's performance ranked among the best our investors had ever seen. While not the only factor, our diversified talent pool undeniably contributed to this exceptional outcome.

Overcoming Initial Friction

These results might not be immediate.

Research indicates that when we change the makeup of a group to introduce variety in attributes like age, sex, race, personality, knowledge, or values of its members, they may struggle to find common ground with one another. They may find themselves in conflict or disagreement that slows down their decision-making processes and require special facilitation and management to ensure all viewpoints are brought to the table in group work.

In my experience, diversifying the workforce surfaced sensitive personal issues requiring careful navigation. Seemingly innocuous language could be misconstrued, and building trust among diverse colleagues took time and deliberate effort.

Like any new skill, integrating diverse perspectives involves a learning curve and potential setbacks – and this initial discomfort might tempt us to abandon the effort prematurely. However, both evidence and my own experience underscore the importance of perseverance. With time and intention, these initial hurdles can be overcome, leading to higher performance levels.

Practical Considerations for Implementation

Because there can be early friction in changing groups, it’s important that company leadership speaks very clearly about what their intentions are — and are not. Absent this clear communication, employees can be quick to make assumptions that get repeated in the echo chamber of a heated political environment.

For example, a seemingly minor comment I made regarding adjustments to our team’s social events quickly morphed into a highly charged rumor that I had put a hiring freeze on straight, white fraternity men. It wasn’t true — but it was a story that circulated for far too long.

Regarding outright hiring bans based on any diversity characteristic, my guidance is clear: such attributes should never serve as a primary hiring criterion, nor even as a deciding factor between equally qualified candidates.

However, I have found significant value in strategically using diversity considerations to build the candidate pool. For example, in the tech sales sector, where women represent only about 25% of sellers and people of color less than 3%, I keep the candidate pool open until it includes a representative proportion of women (e.g., around 25%). Ultimately, I’ve wound up with a better hire — regardless of their demographics.

The bottom line: Building diverse teams isn't about ideology; it's about a fundamental principle of effective organizations: diverse perspectives drive better outcomes. My experience — and the research — shows that to be true, no matter what we call it.

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JD Miller is the the author of “The CRO’s Guide to Winning in Private Equity" and an operating advisor for PE-backed firms who leverages his expertise at the intersection of business, technology, and humanity to strengthen the companies he works with.