You don't expect startup-style growth from traditional businesses like movies and communications. When it does happen, you know something special is going on. Consider a South African disrupting global automotive--thanks, Elon Musk. Think about a woman changing the pace of the global communications--take a bow, Gwynne Shotwell, president of SpaceX.
Let's take an example from 100-year-old industry anyone can relate to--movies. Global box office revenues are shooting up from $38 billion in 2016 to $50 billion in 2020. So what's driving growth? It's not the audience--the audience is substantially the same. It's not the tech--tech is in every industry now. It's the connection between the product and people.
Diversity catalyzes revenue
A recent study conducted by the University of California, Los Angeles, took a hard look at the financial returns of the top 200 grossing films last year. Movies where more than 20% of the cast were minorities grossed a lot more. Movies like Suicide Squad, Beauty & the Beast, Wonder Woman, and Black Panther are setting records for not only diversity but also for returns for investors. Eric Kelsey reported in Reuters,
The median global box office for a film that consisted of 21 percent to 30 percent minority actors was $179.2 million. In contrast, films with less than a fifth of minority actors, a majority of the films studied, failed to gross a median of $40 million worldwide, the worst-performing segment, the authors found.
The future's lining isn't just silver. It's platinum for companies that understand diversity drives growth.
It's no surprise when you set your table for the world, the world responds. The diversity of the leadership team, the management team, and the staff are elements entirely under your control as a leader, just like any facet of culture. There are lots of studies, over decades, that show diversity increase profitability, shareholder value, and innovation, but it takes a leader to put the information into action to drive those results. Incorporating diversity is a rare business skill, but it's one anyone can learn.
It's one of the reasons I'm personally so excited about my industry, venture capital. It's a like a lot other industries invented in the last century. It's dominated by a 95% white male group of decision-makers in a country where 40% of our entrepreneurs are minorities. Diversity is the plot line in the biggest growth story of this age. Use this knowledge to your advantage by making sure diversity is core to your leadership style. No matter which industry you're in, the financial facts around diverse teams outperforming in the age of innovation are impossible to ignore.