leadership equates with less fi nancial success. T is squares with what Brian S. Moskal discussed in
“Women Make Better Managers” in Industry Week in 1997. Looking at over 900 managers at top U.S. corporations, “women’s eff ectiveness as managers, leaders, and teammates outstripped the abilities of their male counterparts in 28 of 31 managerial skill areas.” Forward-thinking companies like T e Coca-Cola
Company are paying attention. Catalyst reports in “T e Coca-Cola Company—Global Women’s Initiative: Women as the Real Drivers of the 21st Century” (2013): “Externally, 5by20 is Coca-Cola’s global commitment
to enable the economic empowerment of 5 million women entrepreneurs across the company’s value chain by 2020 [thus the name, 5by20 for 5 million women entrepreneurs
According to research cited in a 2009 article, “Does Diversity Pay?: Race, Gender, and the Business Case for Diversity” by Cedric Herring in the American Sociological Review, on average, the most racially diverse companies bring in nearly 15 times more revenues than the least racially diverse. In fact, for every percentage increase in racial or gender diversity up to that represented in the relevant population, sales revenues increase approximately 9 and 3 percent, respectively. Racial diversity, Herring found, is a better determinant
of sales revenue and customer numbers than company size, age, or number of employees at a worksite. Companies with the highest rates of racial diversity reported having on average 35,000 customers, whereas companies with the least racial diversity reported having only 22,700. According to
THE COMPANIES WITH THE MOST WOMEN ON THEIR BOARDS OUTPERFORMED THOSE WITH THE LEAST
BY 66% IN RETURN ON INVESTMENT CAPITAL, 42% IN RETURN ON SALES, AND 53% IN RETURN ON EQUITY.
by 2020]. T rough this eff ort, Coca-Cola helps women overcome barriers that they face in the marketplace and grow their businesses sustainably. Coca-Cola’s initiative has signifi cantly increased women’s
representation around the world. Between 2008 and 2012, the proportion of women leaders increased from 23 percent to 29 percent among senior-level women and the proportion of immediate pipeline women increased from 28 percent to 34 percent, with consistent increases across regions. Globally, Coca-Cola’s external recruitment of women lead- ers rose from 13 percent in 2007 to 41 percent in 2011. T e representation of women in Coca-Cola’s key assessment and development programs rose from 21 percent in 2007 to 49 percent in 2011. T e reach of 5by20 has recently expanded to include 12 countries; by 2011, it had impacted 130,000 women, and was on track to reach 300,000 women by the end of 2012.”
RACIAL DIVERSITY AT THE TOP PAYS, TOO Companies with greater racial diversity at the top leave their more homogeneous counterparts in the dust, too.
MCCA.COM
Herring, companies that even only marginally increase their racial diversity gain an average of over 400 customers.
IBM: AN EXAMPLE OF DIVERSITY AND REVENUE GROWTH
Diversity represents a competitive advantage, and you can measure it fi nancially just as IBM did. As a result of implementing a diversity task force initiative, IBM grew its female executives ranks by 370 percent, its ethnic minority executives ranks by 233 percent, and the number of self- identifi ed gay, lesbian, bisexual, and transgender executives by 733 percent. T e result, as David A. T omas wrote in “Diversity as Strategy” in the Harvard Business Review in 2004, was stunning: “[T]he work of the women’s task force and other
constituencies led IBM to establish its Market Development organization, a group focused on growing the market of multicultural and women-owned businesses in the United States. … In 2001, the organization’s activities accounted for more than $300 million in revenue compared with
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