There is a growing appreciation of diversity and inclusion as a means of enhancing organisational performance.

This is the word from Thokozile Mahlangu, CEO of the Insurance Institute of South Africa (IISA), who says that diversity and inclusion have become key discussion points in boardrooms across the world as leaders recognise the significance of “innovation revenue” to their overall organisational performance.

“Innovation revenue” is earnings derived from the introduction of a new product or service in a business’ market offering.

Citing a study by the Boston Consulting Group, Mahlangu says innovation revenue was up by 19% in companies with above-average diversity on their leadership teams. This percentage increase was arrived at by comparing growth to those companies with below-average diversity at a leadership level.

“Study after study, we are seeing overwhelming evidence that diversity, both from an ethnic and gender perspectives amongst others, is a major contributor to an above-average financial performance by businesses in insurance as well as in other sectors of the economy,” says Mahlangu.

However, she cautions that in building teams that are diverse and inclusive, companies should not simply observe the narrow definition that only looks at gender and race.

“True diversity extends past gender to encompass experience, age, race, sexual orientation, background, ethnicity, skills and much more,” explains Mahlangu.

She says insurance industry players must make a deliberate effort to instill a culture shift, where diversity and inclusion are not cosmetic elements of their PR posture, but rather a strategic intervention that will see “the insurance sector grow sustainably in leaps and bounds”.

Mahlangu says a report by auditing and consulting firm Deloitte also added another voice to the growing momentum acknowledging the lasting impact of diversity on organisational performance.

“The study clearly shows that a greater sense of inclusion leads to an increase in collaboration, quality of decision-making and team performance,” says Mahlangu.

She adds global consulting firm McKinsey also echoed these sentiments in a study that showed companies in the top quartile for racial and ethnic diversity at the leadership level are 32% more likely to outperform their peers on profitability.

“All these narratives paint a picture that says unequivocally that diversity and inclusion are too important to ignore,” says Mahlangu.

“Our industry cannot afford to simply pay lip-service to change if it is serious about growth and sustainability in an age where it is almost impossible to predict the nature and impact of the next competitive force.”