| This week, we focus on how diversity in an organization pushes fresh thinking and innovation. Plus, the use of wartime analogies to describe the pandemic, and Vivek Murthy, a former US surgeon general, on avoiding a “social recession.” |
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| The current outcry in the US over racial injustice is long overdue. Yet while many companies are pledging to commit to diversity and inclusion goals, others may decide they should focus elsewhere to ensure their survival as the fallout from the pandemic continues. That would be a mistake: our research shows that businesses with a strong culture of diversity and inclusion are actually better positioned than their less diverse peers. |
| Our newest report, Diversity wins: How inclusion matters, is the third in a series and reveals a compelling business case for diversity. Our analysis of more than 1,000 companies in 15 countries shows that companies that include more women and people of color in leadership roles consistently outearn companies that do not. In fact, businesses with the highest number of female executives were 25 percent more likely to have above-average profits than those with fewer or no female leaders. This connection is even stronger for companies with culturally diverse top teams: 36 percent of these firms are more profitable than their less diverse peers. |
| More viewpoints. One of the benefits to having a diverse workforce is improved decision making. McKinsey research shows that teams with diverse colleagues tend to be more creative when it comes to problem solving, since they often approach issues with fresh perspectives. This can help counter the echo-chamber effect that happens when too-similar groups of people are in the same room. |
| Innovative thinking. Research also indicates that diverse teams are meticulous decision makers and are more innovative and more likely to develop new products and propose fresh ideas. In this pandemic environment—one awash in questions that have never come up before—an innovative mindset is essential. |
| There’s work to do. But even though there’s a straightforward business case to be made for diversity, companies continue to lag behind in representation. In the US and UK, one-fifth of executive teams include women, while globally, only 15 percent of executive teams do. For cultural and ethnic diversity, this figure is even lower: 13 percent of executive teams in the US and UK are culturally diverse. |
| Promote people. To profit from the competitive advantage that a diverse workforce offers, business leaders should ensure that diverse talent has the opportunity to advance into management and other leadership roles. Representation matters and is an important part of having an inclusive workplace. |
| Forward thinking. Companies should also ensure that promotions, raises, and evaluations are fair and transparent, and train employees to recognize the cognitive biases that too often prevent women and people of color from advancing up the corporate ladder. By moving the ball forward on diversity, companies will be better positioned to recover from this crisis—and the next one, too. |
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| OFF THE CHARTS |
| Stimulus on steroids |
| Governments allocated $10 trillion for economic stimulus in just two months—and for some countries, the response as a percentage of GDP was nearly ten times what it was in the financial crisis of 2008–09. |
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| NTERVIEW |
| How to avoid a ‘social recession’ |
| As US surgeon general from 2014 to 2017, Vivek H. Murthy, MD, created initiatives to tackle the country’s most urgent public-health issues, including the Ebola and Zika viruses, obesity, mental health, and the opioid crisis. In a conversation with McKinsey, Murthy discusses his concerns about a “social recession” stemming from the COVID-19 crisis. He issues a call to action for high-quality healthcare in flexible settings and warns against losing the improvements the pandemic has spurred. |
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| MORE ON MCKINSEY.COM |
| Is the pandemic response a ‘war’? | The use of wartime analogies has its detractors, but it can be useful to understand the potential economic consequences of this crisis. In some key ways, this period resembles the fully immersed experience of a mass-mobilization, wartime economy. |
| Construction disruption | The pandemic will accelerate an overdue transformation of the construction industry, which tends to be particularly vulnerable to economic cycles. We delve into nine shifts that will radically change the construction value chain. |
| No longer on autopilot: Lessons for CFOs | Chief financial officers and their teams must ensure that the financial-management approaches and tools being used to guide their companies through the pandemic stick in the next normal. |
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| WHAT WE’RE READING
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| Kimberly Henderson |
| Kimberly Henderson, a partner in McKinsey’s Washington, DC, office, serves investors, large energy and industrial incumbents, technology start-ups, and policy makers with her expertise in sustainability and climate-related challenges.
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| Last year, I made a New Year’s resolution to read a book a week on average. My goal felt reachable, given reading is my weekend downtime that helps me recharge after busy weeks. I honestly lost count, but I’m pretty sure I ended the year at around 50 books—certainly more than 40. If I fell a bit short on my 2019 resolution, I am currently overdelivering on 2020’s: to fly much less. Mission accomplished. |
| Most of my list relates to global challenges and solutions. Here are a few of my top picks on gender discrimination, the climate crisis, and biodiversity: |
| Invisible Women: Data Bias in a World Designed for Men by Caroline Criado Perez. I devoured this book in two days. In a fact-based way, the author takes the reader through, chapter by chapter, how women are harmed by the fact that “men are the norm” when it comes to data, whether used for automotive safety or medical needs. |
| The Future We Choose: Surviving the Climate Crisis by Christiana Figueres and Tom Rivett-Carnac. The authors lay out two starkly different futures for the planet: “the world we are creating”—a future ravaged by climate change, with devastating socioeconomic knock-on effects, and “the world we must create”—a future with sustainable infrastructure, a circular economy, and green cities, where we manage climate change and continue to thrive. While this is of course a binary simplification, it is helpful for people to understand the devastation wrought by continuing on our current course, and the opportunity if we course-correct. The book advocates for optimism and action. |
| Half-Earth: Our Planet’s Fight for Life by Edward O. Wilson. Year 2020 was meant to be the “Super Year for Nature,” with a number of major biodiversity conferences lined up. Those have unfortunately been postponed. Wilson argues for protecting planet Earth, for the benefit of not only plants and animals but also for our own self-preservation. He reminds the reader, “The biosphere does not belong to us; we belong to it.” This is a wonderful primer for anyone interested in understanding the human impact on the planet. He takes the reader through the issues—at both the macro and micro level—with fascinating examples of various species around the world, ranging from rhinos to frogs to mollusks to gut bacteria. He also describes the wonders of the “best places in the biosphere,” including the California Redwoods, the Brazilian Cerrado, the Serengeti grasslands, the Congo Basin, Borneo, and Bhutan. |
| Given what’s happening in the US right now, next up on my reading list are Stamped: Racism, Antiracism, and You by Jason Reynolds and Ibram X. Kendi, and White Fragility: Why It’s So Hard for White People to Talk About Racism by Robin DiAngelo. I also recently watched 13th, a documentary named for the 13th Amendment, which abolished slavery. It summarizes the history that has led to mass incarceration of Black people in the US. |
| My goal is to become more educated about this topic, but we also need action. I’m proud that McKinsey has committed to ten actions to support racial justice and equity. If every organization does its part, we can make enormous strides. |
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Share Kimberly Henderson’s reading picks
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| BACKTALK |
| Have feedback or other ideas? We’d love to hear from you. |
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