Over the last few years, the stock market's plunge confirmed an important truth -- for financial security, you need diversity.
Last year, in Australia, I saw isolated colonies of koalas in peril due to inbreeding, proving once again, for a species to survive, you need diversity.
Diversity is necessary for health and survival in all aspects of life -- including business. But when you run a small business -- especially a very small business -- how can you be diverse?
When you lack diversity, the biggest problem is that you don't know what you don't know. Our understanding of the world is limited by our own personal demographics.
As a female, I don't necessarily view the world the same way as men. From my male employees, I've learned that men respond differently to certain colors, words, phrases. We keep those differences in mind when we design our book covers or Web site.
Here's another example. A few years ago. I asked my then-22-year-old assistant to look up a phone number. She immediately turned to the Internet. A lot of people her age never use a phone book. If I were running a business that relied on the Yellow Pages, that would have been a wake-up call.
A diverse staff provides different perspectives and can help avoid costly mistakes, such as when General Motors introduced the Nova to Latin America. If they'd had one Spanish-speaking person on their marketing team, they would have learned that "nova" means "doesn't go." The MGM Grand in Las Vegas had to completely redesign its main entrance -- which had customers walking through the mouth of a gargantuan lion -- when they learned that the reason Asians weren't coming to their hotel was that going through a lion's mouth was considered very bad luck.
If you've got a small business, and your business is stagnating, look around, there are tons of great opportunities by reaching out to new markets, especially neglected markets.
For instance, my friend Matthew grew up in a farming community with a large migrant Hispanic farm worker population. Matthew's father owned a used-car lot, and when he realized that these farm workers couldn't get car loans from local banks, he made the loans himself.
Matthew's father was being a good businessman -- seizing an opportunity. His customers were good credit risks, but the banks didn't know how to deal with them. He took the time and effort to learn to speak Spanish, and his business flourished for decades.
Recognizing the value of a multicultural, multigenerational workforce, big corporations have instituted diversity programs. They have the budget and staff to handle that. But small businesses have far more limited resources. Our first priority is to survive and to thrive. We don?t have the time or money -- or attention span -- to spend on anything that doesn?t immediately affect our bottom line.
Yet, in these times of economic uncertainty, embracing diversity may be a smart strategy for improving the bottom line, not just a "do good" thing to think about during the Martin Luther King holiday. For instance, my business publishes books for entrepreneurs, and there's a big market of entrepreneurs who are Hispanic, African-American, Asian, seniors, disabled, and so on. How do I capture more of these markets?
If I just create a great, quality product or service isn't that enough? Well, it certainly helps. But remember, we're all limited by our own background and world-view. Increasing my interaction with -- and understanding -- of a more diverse population means I may be able to identify great opportunities -- possibly easy opportunities -- to increase sales.
So, what can a small company do?
- Don't discriminate: in hiring, buying, serving customers. It's not just the law, it's a very good law.
- Take a hard look at yourself: Most of us -- myself included -- are more isolated in our interactions and world-view than is good for business.
- Reach out: Seek a broader range of job applicants, suppliers, customers, marketing vehicles. Join organizations serving different target markets.
Because of size, small businesses are limited in how much we can embrace diversity. But if we fail to look at what we're missing, we may be as vulnerable as someone who put their entire savings in Enron stock.
Copyright Rhonda Abrams, 2003
Rhonda Abrams writes the nation?s most widely-read small business column and is the author of The Successful Business Plan and The Successful Business Organizer . To receive her free business tips newsletter, register at www.RhondaOnline.com.