In February, DXagency was awarded its certifications as a minority- and woman-owned business. Sandy Rubinstein, the firm's CEO, said these certifications do more than check boxes for the company.
For DXagency, which is constantly reflecting on the diversity of its team, Rubinstein said the ability to fly that flag is invaluable.
“For new clients and potential new business, it’s a great avenue to showcase that, all things being equal, we’ve got a different sensibility and vantage,” she said. “Those ideas and those differences will make us stronger in the end.”
That idea isn’t just intuitive. There’s the hard data to back up Rubinstein’s ideas.
A 2015 study from Grant Thornton LLP showed that “companies with diverse executive teams outperform competitors run by men only.”
It’s a new line of research, but the study asserts that it’s because the data simply hasn’t been there previously.
“Until recently, it has been difficult to make a decent assessment,” the study said. “There were too few significantly sized companies with women on the board and on which financial performance information is readily available.”
The situation has since changed. The study found that “all but 16 of the (Standard & Poor’s) 500 have a woman on their board.”
It’s a marked step forward, but the study still found a gender gap within these numbers.
“This is progress, but for the most part, these women are employed as non-executive directors,” the study said.
When taking companies that have women on their boards down to the companies that employ at least one woman director in an executive capacity, the number drops from 484 to 35.
The study said there’s a missed opportunity within those numbers — a missed business opportunity.
“Our analysis suggests that the profit forgone — or opportunity cost — by the companies with male-only boards is a staggering $655 million across the three economies (U.S., U.K. and India),” the study said
For the United States, diversifying boards could increase the gross domestic product by 3.5 percent, the study said.
Managing the team
Sara Ellison, a Massachusetts Institute of Technology economist, co-authored a 2014 study on diversity in the workplace. It found that more diverse workplaces, specifically mixed-gendered offices, could increase profits by about 41 percent.
“The more homogeneous offices have higher levels of social capital,” Ellison said. “But the interesting twist is that … higher levels of social capital are not important enough to cause those offices to perform better.
“The employees might be happier, they might be more comfortable and these might be cooperative places, but they seem to perform less well.”
To explain that gap, Ellison considered a baseball team comprised entirely of catchers and said their shared experiences may help them relate through equipment or tips for handling knuckleballs.
But, she said, there’s a catch.
“A baseball team entirely composed of catchers could have high esprit de corps,” Ellison said. “But it would not perform very well on the field.”
And the study asserts that’s a conservative number.
“Further, unquantifiable, potential lies beyond in non-listed companies and midsized companies,” the study said.
It’s an issue Rubinstein says many companies have yet to address effectively.
“Many companies struggle with diversity and how to make themselves more diverse, whether it’s with their employee pool or vendors,” she said. “Part of that is showing that diversity is much needed.
“We have visible diversity at all levels and I think that’s the piece that excites me the most about our company.”
Many studies, including data collected by Grant Thornton that linked diversity and growth, have shown that team diversity produces better results.
“As we go meet people, they start to see the visible diversity and, as our ideas come through, they start to see the invisible diversity,” Rubinstein said.
Diversity for DXagency, Rubinstein said, goes beyond gender and ethnicity.
“When I’m filling positions here at DX, I look for diverse candidates,” she said. “And I don’t mean diversity of color or gender; I want age diversity; I want background diversity because it really does create such a better, more creative workplace and, ultimately, better offerings for our clients.
“Not only are we female- and minority-owned business, but our staff has that same makeup and our work is going to represent the same melting pot.”
Not doing so, Rubinstein said, doesn’t make sense.
“If you have the same type of people giving you the same type of ideas, it’s only going to represent that group,” she said.
The full-formed approach to workplace diversity is also supported by data collected by McKinsey & Co.
The 2015 study found that companies in the top quartile of gender diversity were 15 percent more likely to outperform companies from the bottom quartile.
Then there were the companies in the top quartile of ethnically diverse companies, which outperformed those companies that were in the bottom quartile by 35 percent.
And in Rubinstein’s experience, this can have an effect on the way companies convey their messages.
Currently, she said, a diverse approach to conveying a message isn’t something many businesses are looking toward unless they’re trying to target a single group.
“When you’re giving clients ideas and engagements, I don’t think that they’re as in tune with offering a diverse perspective, unless it’s a minority-targeted campaign,” she said. “My U.S. and Latin clients are using a Latin filter on the engagements because they’re in Spanish and it should be.
“But some U.S. clients would never assume to make different communications to different ethnic audiences in different ethnic markets.”
Is that something companies are going to have to start thinking more about?
“Yeah,” Rubinstein said bluntly. “Mass marketing doesn’t work anymore, especially in a digital world. You really have to microtarget it and, as part of microtargeting, diversity needs to be addressed.”
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