The Advertising Industry Needs Diverse Leadership to Thrive
It's been said for years that the demographic makeup of the U.S. is headed for a seismic shift -- that the non-Hispanic white majority would eventually become a minority. A recent report from the U.S. Census Bureau shows that this is happening even faster than anyone thought before. Projections for the tipping point when non-Hispanic whites would no longer account for more than 50% of the population were initially pegged at the year 2050.
As reported in a recent Ad Age article, updates from the Census Bureau have pushed this date up to 2044. While the overall rate of population growth is slowing due to declining birth rates, because of years of steady immigration the country is diversifying at a pace never before seen in our history. In 2044, the U.S. will be 49.7% white (compared with 63% today), 25% Hispanic (compared with 17% today), 12.7% black, 7.9% percent Asian and 3.7% multiracial.
As an industry that exists to communicate with consumers of all backgrounds and walks of life, the advertising industry stands to benefit more than most by cultivating a highly diverse and inclusive environment that reflects the changing demographics around us. According to the Bureau of Labor Statistics, of the 582,000 Americans employed in advertising and communications in 2014, less than half are women, 6.6% are black or African American, 5.7% are Asian and 10.5% are Hispanic. Together, we can change this.
Diversity of thought is powerful. We need to become the industry that embraces a vast array of talent from different ethnic and racial backgrounds, while also making a real effort to recruit people of different cultural experiences, ages, genders, religions, sexual orientations and lifestyles. This will give us the insights and the skills to evolve alongside the massive demographic, technological and social shifts that we'll see in the coming decades.
One company that has taken diversity very seriously and benefitted from it in interesting ways is Novartis Pharmaceuticals. Its commitment to diversity and inclusion in hiring and promotion is one of the many things the company has done that landed it the top spot on Diversity Inc's Top 50 list, which assesses diversity management in corporate America and around the world.
But Novartis goes far beyond just hiring employees from diverse backgrounds. The company supports employees in their work and gains valuable business insights from them though voluntary resource groups that bring together employees of similar backgrounds -- from ethnic groups to veterans, women, working parents and those affected by cancer. These groups benefit employees through career development and networking, and they benefit the company because they are an innovative way for Novartis to conduct research, gain new perspectives and find culturally competent insights without even having to look outside the company. A strategy like this would be powerful for any business, but could be a game-changer in the ad industry.
Encouraging diversity and inclusiveness in our industry isn't only a matter of fairness and ethics -- it's also smart business. In a recent study by McKinsey and Co. on the effects of top-team diversity at a wide range of international businesses, the findings were incredibly telling: "For companies ranking in the top quartile of executive-board diversity, ROEs (returns on equity) were 53% higher, on average, than they were for those in the bottom quartile." The same study found that U.S. public companies with diverse executive boards have a 95% higher return on equity than those without.
While the numbers alone should be a call to action for leaders in the ad industry in our community, I think the real takeaway is that by building diverse leadership teams that reflect where our country's demographics are headed, executives can lead by example, showing their rank and file that they promote and support diversity at every level.
For starters, diverse teams are more creative and innovative. New perspectives, constructive conflict resolution and fresh problem-solving approaches come to the forefront when people of varied backgrounds work together. Studies have shown that teams made up of people with diverse experiences outperform groups of like-minded experts. When this sort of thinking is allowed to flourish in a leadership team, that's when companies see the real benefits of diverse staffing.
Diversity at the top also sends a clear message to employees. Corporate cultures that embrace diverse leadership in an authentic way attract and retain the best talent at all levels. This should be a wake-up call that hiring diverse employees at the entry level and filling quotas isn't the best way to create a diverse and innovative team. There also needs to be grooming and promotion of staff from different backgrounds, generations and cultures all the way up the ranks, and executive searches need to look outside of the advertising world to attract fresh talent.
In advertising, building a staff with varied perspectives and knowledge about cultural nuances is crucial. Without it, there's no way to communicate authentically in an ever more globalized business environment or in an America that grows more diverse by the day. We all need to do a better job of not just attracting talent from diverse backgrounds, but retaining and promoting them if we're going to stay relevant going forward.