| McKinsey Classics | February 2020 |
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| McKinsey issued Diversity Matters, our first major report on the subject, back in 2014. The moral case for workforce diversity was clear, but we found that it makes business sense too: top-quartile companies for racial and ethnic diversity were 35 percent more likely to have financial returns above their national industry medians; companies in the top quartile for gender diversity, 15 percent. Bottom-quartile companies were less likely than average ones to achieve high financial returns.
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| Certain industries do better on ethnic and racial diversity and others on gender diversity, but no industry or company is in the top quartile on both dimensions. The unequal performance of companies in the same industry and country suggests that gender, racial, and ethnic diversity are competitive differentiators: more diverse companies lure better talent and improve their decision making, customer orientation, and employee satisfaction. Diversity in background, age, sexual orientation, and work experience also probably confer some level of competitive advantage. To learn how a wider range of employees can help companies succeed, read Diversity Matters. And remember that we continue to extend our research on the business case for diversity. Look for our next report later this quarter.
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| Did You Miss Our Previous McKinsey Classics? |
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| To learn how the mounting importance of both soft management skills and high technology makes the senior executive’s work more interesting and complex, read the 2014 classic “Manager and machine: The new leadership equation.” |
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