Diversity is a complicated subject and means a lot of different things to different people. But what is clear is that it's a key driver of business success, and I'm not just talking about hiring.
To tap diversity's full benefits, you have to look beyond your company's walls. If you make the effort to reach a more diverse base of customers, you'll likely reach a broader community of potential clients.
If you work with vendors who value diversity in hiring the same benefits as above will apply. If you value different backgrounds and perspectives in your own organization and have seen these benefits, the natural step is to work with vendors who have the same hiring philosophy. Not only are your values aligned, but you'll also get better results from vital partners.
Here are some key benefits you can reap when your customers and vendors are as diverse as your own internal organization:
1. Strengthen your supply chain.
Many leaders don't re-evaluate their supply chain as carefully as they should. It's important to set aside time each year to review your vendor roster. There's an obvious temptation to work with the largest vendors in each space to pursue the lowest prices. But your procurement strategy shouldn't be all about price. Which is more important: saving a few bucks on each order or forging relationships with vendors who bring new and better ideas to the table?
A strategy to consider is to transition from giant vendors to suppliers that are smaller, more diverse, and driven to set themselves apart for their customer service and innovation. These companies often are looking to establish themselves in the marketplace and do so with innovative thinking and top tier customer support.
If you're currently working with massive vendors, it may be worth exploring a different option that is similarly committed and adaptable to a rapidly changing business landscape.
2. Broaden your customer base.
When a recession hits, the companies that thrive won't be those with the largest number of customers; they'll be the ones with the widest base of customers. The reason is that recessions have an uneven effect--certain geographic regions and demographic groups inevitably get hit harder than others. Because those regions and groups aren't predictable in advance, a company's best bet is to diversify its customer population as much as possible.
Having a broad, diverse customer base is easier said than done, but a good way to start is by decreasing your account size. Jason Fried, the co-founder of project management platform Basecamp, admits he says "no" to many large enterprise accounts in order to ensure that no one client is crucial to company solvency.
A few large accounts drives plenty of revenue, but it also leaves a business especially vulnerable to economic downturns and management changes. By servicing a diverse pool of hundreds, or thousands, of smaller clients instead, you provide yourself with more economic safety if adversity strikes.
3. Maximize the value of mentorship.
There's a reason startup accelerators like Techstars, a Colorado based firm, insist on diverse mentor relationships: a person who is exactly like you will not be the mentor you need. That type of identical mentor will not challenge your ideas or give you the push you need to be better--you need an advisor who has a different perspective and experience to broaden your mindset.
When finding new mentors, focus on a single point of similarity: the experience or area of business that the mentor can teach you about. Aside from that, look for differences. If you grew up in a rural area, find a mentor with an urban background. If you're a male entrepreneur, seek out women's insights on various topics. If you're from another country, ask someone born in the United States to give you a gut check on marketing messaging, or vice versa.
I've talked about the lack of diversity in hiring and believe that asking pointed questions that reveal people's differing perspectives is invaluable to building a team with different views and perspectives. Taking this approach can highlight biases, whether the person realizes they have them or not.
If we want to make strides in diversity, both leaders and companies will need to look beyond their own four walls. Until then, vendors will serve up the same ideas, mentorships will be less mutually beneficial, and businesses will be worse off as a result.