How Cultural Changes in the Workplace Can Grow Your Business

February 16, 2017
7 min read

Opinions expressed by Entrepreneur contributors are their own.

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The following excerpt is from Glenn Llopis’s book The Innovation Mentality. Buy it now from Amazon | Barnes & Noble or click here to buy it directly from us and SAVE 60% on this book when you use code LEAD2021 through 4/10/21.

The Cultural Demographic Shift (CDS) is driving the fastest-growing part of our U.S. workforce, and shift populations represent the largest segments of America’s potential purchasing power. But they also represent some of the fastest-growing demographics of business owners in the U.S. You want them to be your customers, but they’re also fast becoming your competitors.

Related: What Magic Johnson Can Teach You About the Advantages of Cultural Demographic Shifts

Shift populations, like immigrants, have been compelled to use the innovation mentality to see opportunity and embrace an entrepreneurial spirit. This is part of the reason why black women are the fastest-growing group of entrepreneurs in the U.S. (up more than 322 percent from 1997 to 2015 according to the “2015 State of Women-Owned Businesses Report” commissioned by American Express Open) and why the number of Hispanic-owned businesses grew 15 times faster than other U.S. businesses (or at a rate of 7.5 percent from 2012 to 2015, according to a study by the consulting firm Geoscape and the U.S. Hispanic Chamber of Commerce).

Those shift population businesses present opportunities to reach the populations a business doesn’t have the talent internally to connect with. That’s how we come up with the three most visible areas where the CDS has created immediate and obvious opportunities for growth:

• Workplace/workforce
• External partnerships
• Marketplace/consumers

Solve for the gaps in these three areas using the six characteristics of the innovation mentality, and you solve for high-performance teams through diversity of thought; authentic workplace cultures whose values are defined by individuals who are encouraged to breed continuous innovation; and intellectual capital and know-how previously unseen that enables the full potential in people. All this results in an intimate engagement that maximizes the full potential of people who are your employees and your customers. That’s sustainable ROI!

So ask yourself: “Does your workplace culture support demographic, cultural and experiential differences and leverage them in these three areas?” Probably not. Most current leadership in the U.S. is woefully unprepared or unwilling to see the opportunity gaps, let alone invest in them. Unfortunately, American corporations see all this activity as an initiative (cost center) and will see the CDS as the last remaining true growth opportunity (profit center) only when Latin America and other international regions begin seizing the previously unseen opportunities because they had the vision to see it first.

Related: 4 Steps to Profiting from the Cultural Demographic Shift

Solving for workplace/workforce

Do you celebrate differences and individuality in your workplace? Or are you like the hundreds of companies I’ve worked with that have said something similar to what senior executives from a major investment-banking firm told me: “Today, we’re afraid for the future of our business because our employees don’t relate with our emerging global client base. Many of our new competitors are now owned and operated by Indians, Asians, African-Americans and Hispanics. We continue to lose key diverse members of our workforce to these same competitors because we lack the cultural intelligence to keep them.”

Remember, you can’t develop this cultural intelligence, let alone define your business platform, unless you have leaders who own the experiences and influence their cultures can bring to how they think, act and are motivated to perform. This is part of their leadership identity. That’s why it’s important for you and your managers to spend time defining your personal brand value propositions and leadership identities.

When you’re in evolution mode, you have to create your own platforms. Otherwise you just keep substituting, which is exactly what workplace programs like Employee Resource Groups do. ERGs are growing initiatives in corporations as the CDS has required new, diverse talent in management, director level and senior executive management roles. I used to think ERGs could play this role and have a purpose beyond events, social aspects and focus groups that usually define what they do at most companies — in a strictly voluntary capacity, mind you. But I realized that they almost always have no real strategic value. They’re just initiatives. Even when they have hundreds of members, only a small percentage of ERGs are active. It’s difficult to recruit new members when these volunteer groups are not incentivized or properly invested in. And why should people participate when no one in senior leadership is active or sees any real strategic value in them, other than as initiatives that exist solely to check off another box on the “compliance” list.

That’s irresponsible. ERGs and workplace groups like them have value only if they matter and have quantitative influence — and that happens at such a small percentage of companies, it’s almost statistically irrelevant. Until then, ERGs will likely make an organization more divisive until that organization can recognize the value that comes from different types of people. Which is why, like job descriptions, I believe they should be eliminated until organizations clearly define what their ERGs are solving for. Before it makes sense to reinstitute ERGs, organizations should view these groups as profit centers not cost centers, pay active members a small bonus to remain active and quantifiably contribute to business growth. Without that, ERGs will continue to play the role of “diversity checkboxes” that unknowingly create more tension and widen engagement gaps among their members.

So what’s the solution? Instead of large groups of inactive members, I’d rather see small “idea labs” led by subject matter experts who serve as examples of how their unique differences cultivate innovation and initiative. You can’t come into the group unless you’re a subject matter expert or have a desire to be one, because as experts, you know what you can solve for, see the opportunity gaps and identify them quickly to build a plan around them. This group and its plan then serve as examples of how their unique differences cultivate tangible change and growth that impact the bottom line.

Related: 6 Characteristics of an Innovative Leader

That’s how ERGs become smarter about defining what they’re ultimately trying to accomplish for themselves and the business, and then create a metric to enforce accountability to assure their objectives are being measured and attained. ERGs must view themselves as formidable advancement platforms for talent and market development activity. They must be focused on defining a value proposition that is more strategically aligned to seeing and seizing business innovation and growth opportunities that are directly related to a person’s cultural, gender, sexual-orientation and societal identity. They must be more forceful and encourage different points of view and perspectives that translate into solutions to meet corporate growth objectives and initiatives across channels, brands and business units. Until then, they will do little to alleviate the fact that the changing face of America is being met with tremendous resistance. That’s how and why the “old guard” remains uncomfortable with the CDS; it still represents uncertainty and change for those who are uninformed about what diversity means to enabling business growth, which brings us to external partnerships.

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