Project teams that lack diversity may be hindering not only project outcomes, but overall return on investment (ROI). According to the Project Management Institute (PMI)’s 2020 Pulse of the Profession research, 27% of surveyed companies plan to put diversity and inclusion (D&I) initiatives on hold — a mistake, PMI suggests, because 88% of project professionals believe having culturally and gender diverse project teams increases value.
This disconnect between project professionals and organizational strategies comes as Millennials and Generation X have become the two largest generations in the workforce, both of which predominantly believe workplace diversity is important to them. And if diversity matters to employees, it should matter to employers, as it can significantly impact team performance and ultimately project success.
A lack of diversity among project teams often leads to group-think, whereby decisions are made in a way that doesn’t allow much room for creativity or individual responsibility. To succeed in today’s disruptive digital environment, organizations also need a broader range of perspectives and skills on their project teams, in addition to diversity of thought, nationality, and culture. Doing so creates innovative, collaborative, and future-ready project teams that can fuel successful outcomes for an increasingly diverse client and customer base.
Here’s how creating greater diversity on your project teams can lead to increased profitability and value creation.
Having more diverse project sponsors and executive members is no longer a ‘nice-to-have; it’s vital for stakeholder value and ROI. Meeting the changing needs of global customers requires diverse views. Companies that have above-average leadership diversity generate 19% higher innovation revenues than those with below-average diversity.
Stakeholders now recognize the value of shifting to more diverse leadership and board members to meet an increasingly diverse customer base’s ever-changing needs. A McKinsey study, “Why Diversity Matters,” found that companies in the top quartile for gender-diverse executives are 15% more likely to generate above-average profitability. Further, companies with racially diverse executive teams provided 35% higher Earnings Before Interest and Tax (EBIT) and 33% more long-term value over the least racially diverse companies.
Removing group-think increases team performance
Millennials are having a significant influence on the radical transformation of diversity and inclusion in both the workplace and society at large. This generation of workers is redefining diversity to distinguish its meaning from that understood by previous generations, focusing on respect for identities, unique experiences, and other elements:
- 32% of millennials focus on respecting identities
- 35% on unique experiences
- 29% on ideas, opinions, and thoughts
- 25% are more likely to focus on equality
This emphasis on respect impacts the sense of belonging for employees, motivating team members to work harder together and encouraging more harmonious team collaboration. By embracing diverse viewpoints and unique experiences, project teams can avoid the pitfalls of group-think, instead opening their minds to new possibilities for executing projects and new opportunities for improving project outcomes. Environments in which everyone feels comfortable sharing ideas and differing opinions helps increase opportunities and provides room for unanticipated growth.
By placing value on equality, project team members can collaborate on a level field, increasing employee satisfaction and engagement. Combined, this renewed focus can lead to improved productivity at all levels, thereby enhancing project performance.
D&I provides new opportunities for team growth
Project planning, execution, and final deliverables are vastly improved when project and portfolio teams are more diverse. The ultimate win is a high ROI for project stakeholders. PMI’s findings also showed 83% of surveyed respondents believe having internationally diverse teams increases ROI. Diverse teams bring the following benefits:
- Broader experience and awareness
- Increased trust and a sense of belonging
- Increased tolerance and understanding
- Expanded views and interest in learning new things
- The ability to move beyond barriers created by unconscious bias
- Increased team cohesion
- Increased interest in sharing and collaborating
- Increased interest in winning as a team
- A willingness to share the workload and help one another
- Reduced conflict
- Higher levels of productivity
- Less wasted time
- Increased professional growth
Project diversity has a similar impact on ROI as functional diversity: The more diversity, the more varied the experience, ideas, and innovation. Diversity doesn’t just mean race or gender, it also refers to diverse points of view. Ultimately, removing the concept of group-think ensures everyone puts forth their best and contributes toward better outcomes, generating a higher ROI.