This article was first published on the International Festival of Business website.
At the turn of the year, a McKinsey report suggested that companies in the top quartile for ethnic diversity were 33% more likely to see higher-than-average profits than those with the least diverse workforce.
It’s the sort of statistic that makes headlines once in a while but can feel far removed from the day-to-day business of running a company.
Media consultant Aaqil Ahmed will set out why diversity matters at the International Festival of Business on June 21. As a taster, he gave us five reasons why encouraging diversity makes business sense.
While recruitment professionals ensure companies stay on the right side of legislation, Ahmed argues that managers shouldn’t leave it to HR to worry about diversity.
‘You can’t just think of it as box ticking,’ says Ahmed, who is a former head of religion and ethics at both the BBC and Channel 4. ‘It’s not important because it’s a nice thing to do but because you need to do it.’
He cites projections that by 2050, 40% of the population will come from a black, Asian or minority ethnic (BAME) background.
‘It’s only going one way,’ he says. ‘In terms of understanding your customers, there’s no one size-fits-all. In the long term, you’ve got to figure out from a business point of view whether you want them to be your clients, your workforce, your board members…’
Broaden your horizons
‘We might set targets to have 8% of staff from a migrant background, which is great – better than nothing – but from a business point of view, it should be about what’s the point of diversity,’ says Ahmed.
‘It’s not just hiring people who are brown but who think differently. You want a diverse staff, not just for the colour of their skin. On one level you want them to relate to customers. But in boardrooms or offices you want them because they will think differently.
‘You want diversity of thinking, not a monocultural groupthink.’
Widen your appeal
If you were wondering what someone who makes a living out of commissioning documentaries knows about all this, Ahmed says his own industry is a case in point.
‘The series Heroes had Japanese and American-Asians; Lost had Arabs and Koreans, and it wasn’t by accident,’ he argues. ‘They wanted to deliver a global success. Look at kids’ entertainment - Disney are the kings of reflecting an audience. These things help make successful shows.’
Sure, not every business needs global appeal but Ahmed says companies operating well away from the glare of studio lights still need to follow the same principles.
Identify business opportunities
Ahmed says businesses can learn a lot about customer behaviour from food; many Italian or Chinese-Americans can’t speak their grandparents’ mother-tongue but retain their ethnic roots in the meals they love.
‘I was born in the UK and my kids were brought up here. But none of us can do without chapattis. If you’re a carton manufacturer, food is a big thing because that’s how people get their pudding.’
When addressing a conference of packaging manufacturers, Ahmed pointed to the sizeable – and expanding – Turkish communities in many European cities.
‘They are going to get food from Turkey and someone needs to make the packaging it’ll be transported in. I asked them, from a business point of view, do you want that business or do you want a Turkish company to have it?’
Ignore diversity at your peril
‘The future is not going to be the same as today,’ warns Ahmed.
‘In our big multicultural cities like Leicester and London, we are getting towards 50% white and 50% migrant background,’ he says.
‘If you start narrowing it down even further, parts of Birmingham will be monocultural Asian but not just that, they’ll be Pakistani, and even from one part of Pakistan.’
Someone will profit from serving those communities, he says. But only those understand them will be in a position to do so.
Making the right appointments to help you achieve that might involve going out of your comfort zone, says Ahmed. But he adds: ‘If you choose to think "I don’t really understand it, I’ll leave it to HR", you’re missing a trick.’
The International Business Festival takes place in Liverpool from 12 to 28 June.
Image credit: creativetan/Shutterstock