Innovation, Range, and Profit: Three Reasons Why You Can't Afford To Not Have Diverse Teams

Updated: Apr 21

When KFC first expanded into China in the 1980s, they directly translated their slogan “Finger-Lickin’ Good” to all signage, packaging, and uniforms. But what they didn’t realize is when directly translated, Finger-Lickin’ Good turned into “Eat Your Fingers Off”. Although this blunder was an embarrassment, KFC is now the #1 fast-food brand in China (even bigger than McDonalds), thanks to being more culturally aware. They have even blended some of the national culture with the KFC signature dishes, thanks to consulting with Chinese consumers.

A diverse PR team could have prevented resources wasted on a scary, albeit hilarious, slogan. A bilingual team, in addition to avoiding bad translations, can also help a firm effectively reach an entirely new demographic. In addition to these benefits, diverse teams can also produce a wider variety of ideas, allow for more risk-tolerance, and create more profit. Practically speaking, diversity has immediate benefits.

Consider the Silk Road. The Silk Road was a network of trade routes that connected much of Europe, Asia, and Africa in ancient times, and was central to the economic, cultural, political, and religious interactions between these regions. The interactions between people on the Silk Road gave us many of the things we use today including advances in astronomy, language, and philosophy. Diverse teams needed to work together to trade and because of this, there was a free flow of information between cultures.

Diverse teams cause people to question preexisting assumptions. With homogeneous teams, there tends to be more Groupthink, meaning people are more inclined to agree with the group, reducing their risk of standing out. With diverse groups, there is already a “stand-out” factor, meaning people are more willing to risk disagreement with the group. This leads to a more diverse and creative set of ideas presented. As long as the team is well managed and has the same set of values, the team will succeed. Joan Williams, professor and the founding director of the Center for Work-Life Thought at the University of California’s Hastings College of the Law speaks with Harvard Business Review Ideacast Host on this topic:

“It’s now been well-documented that well-managed diverse groups simply perform better. They have a broader range of ideas. They’re not an echo chamber.” It has also been documented that diverse teams lead to better bottom lines. Diversity, whether in gender, race, experience or cultural background, has been proven for decades to increase profitability in firms according to this HBR article. Firms with more racial and gender diversity had more sales revenue, customers, and profits according to a 2009 analysis by Cedric Herring. Another analysis of more than 20,000 firms in 91 countries found that companies with more female executives were also more profitable.

Remember the KFC in China example? That could have been avoided if people with more diverse backgrounds had been hired. Advertising across different cultures can be incredibly difficult, especially when symbolism is so important in other cultures. Although diversity can make it feel as though the communication processed is slowed down by the reviewing of ideas, the refinement of the final idea can give firms a greater edge. Diversity does not just refer to race, either. A diverse team can

include people from different socio-economic backgrounds, different parts of

Infographic courtesy of SCORE the country, or different parts of the

world. Since mid-2020, more firms have been actively hiring outside their normal hiring hubs in order to attract a better variety of candidates. If you want your team to produce a wider variety of ideas, allow for more risk-tolerance, and create more profit, get a more diverse team.

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