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How Diversity Directly Correlates to a More Healthy and Successful Business

In my twenty-eight years of international travel, I’ve been fortunate to have been given access to the inner workings of numerous companies and their leaders. Business is taken seriously everywhere in the world, to say the least. The most successful businesses I’ve personally encountered are mainly sports-related, which requires teamwork from people of different races, orientations, religions, beliefs, opinions, backgrounds, and so forth in order to win. Well, the same can be said for how diversity directly correlates to a more healthy and successful business in the hemp industry.

Diversity makes our world great! Diversity in the hemp industry will make our world even greater! One of the first things I learned when I embarked on these international trips was, every place on earth is different than everywhere else. Meaning, the world is as diverse as you can imagine. The idea and concept of social diversity is now being promoted by numerous well-known companies in the U.S. However, the key to achieving this concept of social diversity is the follow-through. Most conversations surrounding diversity will usually culminate with an only time will tell or we shall see what happens, but daily consistency and being present to diversity should be the only benchmark for a truly successful business ecosystem.

Nobuhiro Endo, chairman of the board at NEC Corporation (Japan) recently penned an article for the World Economic Forum titled, Is the Future of Value Creation Through ICT (Information and Communication Technology).  Mr. Endo makes a great point, “Diversity is important for every society and it is imperative not to become an exclusive society. Such formations require a framework enabling each individual to bring and share data so that the optimized value chain can be further enhanced. To achieve this, rather than just using KPIs (Key Performance Indicators), we need to develop something on a bigger scale, something that will benefit more people, namely Key Goal Indicators (KGIs).

 In essence, creating totally optimized solutions requires a procedure for gaining consensus on KGIs that is not part of the conventional process. Each day our society becomes more and more diverse, and new data are created, and each one brings a new perspective about something into our society.”

If the U.S. hemp industry can learn how to create KGIs from Mr. Endo’s teachings, it will position the industry as a dominant player in the international hemp marketplace.   Furthermore, if you follow the current market trends, mergers and acquisitions are leading the charge so far for the hemp industry in 2021 and conglomerate companies are positioning themselves for the international hemp marketplace.

In a recent article, Want Outperforming Stocks? Look for Diversity in Executive Leadership: Diversity isn’t just for show — it’s tied to outperformance and superior profitability, written by Selena Maranjian, she refers to McKinsey & Company which is known as the “gold standard” in management consulting and is the most recognized management consulting firm in the world.  McKinsey, delivers guidance for companies, but it offers some insights for investors, too.  McKinsey’s “Delivering through Diversity” (2018) report addresses diversity in management found correlations between diversity and performance. 

 McKinsey says, “Having more female leadership at high levels is tied to outperformance: “Companies in the top-quartile for gender diversity on executive teams were 21% more likely to outperform on profitability and 27% more likely to have superior value creation. The highest-performing companies on both profitability and diversity had more women in line (i.e., typically revenue-generating) roles than in staff roles on their executive teams.”

Having more minorities and people with different ethnic and cultural backgrounds in executive ranks is tied to outperformance: “Companies in the top-quartile for ethnic/cultural diversity on executive teams were 33% more likely to have industry-leading profitability.”

The least diverse executive teams fare the worst: “Overall, companies in the bottom quartile for both gender and ethnic/cultural diversity were 29% less likely to achieve above-average profitability than were all other companies in our data set. In short, not only were they not leading, they were lagging.”

In conclusion, I will leave you with a quote from Steve DeAngelo, an activist and executive who is sometimes called the father of legal cannabis, and his outlook for the industry.  Mr. DeAngelo states, “Cannabis (which includes the hemp industry) has the potential to be ‘a different kind of industry,’ one with more humane values than are typically ascribed to major corporations…”

References:

Could this be the future of value creation through ICT? | World Economic Forum (weforum.org)

Want Outperforming Stocks? Look for Diversity in Executive Leadership | The Motley Fool

New York and New Jersey marijuana legalization: The plan to help “equity” businesses keeps failing. (slate.com)

The 11 Most Prestigious Consulting Firms in the World (2021) (thinkific.com)

Dozie Mbonu – Chair of Standing Committee for Social Equity

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