Inclusive Decision Making Increases Performance Of Diverse Global Companies

Cloverpop today published research that reveals how inclusive decision making allows companies, especially tech companies, to use diversity to improve business performance. The study — lauded by experts and executives — was based on 566 business decisions made by 184 different business teams in a wide variety of companies over two years. The research found that gender diverse business teams make 25 percent better decisions than all male teams, with this advantage increasing by up to 50 percent when a wide range of ages and geographic diversity are added to team compositions. A free white paper describing the study and resulting recommendations can be downloaded today. A free webinar will be held on Tuesday, September 26, at 11 a.m. PT / 2 p.m. ET.

“The conclusion is clear — inclusive decision making activates diversity to increase business performance,” said Erik Larson, Cloverpop founder and CEO. “Previous research shows that decision making is the most important management activity, driving 95 percent of business performance and 50 percent of employee engagement. Now our research draws a pragmatic link between diversity and improved business decision making. By transparently tracking inclusive decision making as a key management measure, companies can fight groupthink, improve business performance and create a long-term competitive advantage.”

Because decision making is a critical and universal business process, inclusive decision making is also a practical way to address diversity gaps in the workplace. For example, Ian Martin Group, an engineering recruiting and staffing firm with a 50 percent female employee ratio, found they were able to include women in 95 percent of their decision-making teams. “Diversity has been a core value of our company since our founding 60 years ago, and a key business advantage in a competitive market,” said Tim Masson, CEO of Ian Martin Group and study participant. “We made a major investment in inclusive decision making, and this study proves the value of our approach.”

Research Shows Value Of Measuring Decision Making Diversity And Inclusion

While the study discovered that diverse teams make better decisions 25 to 50 percent of the time, a lack of decision-making transparency and measurement keeps most companies from realizing this potential. Indeed, only 62 percent of business decision making includes direct participation by a mix of both men and women in an average company, highlighting a huge opportunity to improve both decision making and business performance. An apparent gender bias hides this resulting performance gap from traditional management measures, since the study also found that male decision makers inflated their results versus expectations by 7 percent compared to females. Without transparent policies, systems and metrics that directly measure, manage and improve decision diversity and inclusion, companies allow a significant yet solvable drag on business performance to persist.

“What gets measured gets managed. As for my company, I was shocked to find that with almost 40 percent female employees, only 56 percent of our decisions included women, even though we have many strong female managers and execs,” Larson added. “Not surprisingly, engineering was a trouble spot, so this data guided our hiring choices. Within two months, we hired two female engineers to add diversity coverage for technical decisions. And because inclusive decision making leverages a company’s existing diversity, improvements can happen fast. We showed that by transparently tracking and managing the who, what, why and how of the decision-making process, executives can increase inclusive decision making above 90 percent in six months. Now our goal is 100 percent.”

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