A diversity strategy can help SMEs to improve financial performance in terms of achieving commercial goals and the quality of products and services. This is the reason that this strategy is so popular among practicing managers today.
The ultimate business outcome is financial success which narrows the gap between success and failure and this can be achieved by the commitment of its members and facilitated by an executive acting as a facilitative leader. In doing this, corporate leaders need to focus on the critical human assets such as commitment and thus help followers to effectively implement organizational changes with both efficiency and effectiveness. They can shed light on the strategic role of follower attitudes and values to accomplish a higher degree of effectiveness, and highlight the importance of employees in implementing changes at the organizational level. When corporate leaders show concern for the employee’s individual needs, individuals begin to contribute more commitment and they become more inspired to put extra effort into their work. This extra effort improves the quality of products, customer satisfaction, and impacts the return on assets, sales, shareholder value, and finally improves financial success and operational risk management.
The financial success mentioned above can be only achieved by a diversity strategy. Follower’s diversity of skills and interpersonal relations that is based on trust and reciprocity can improve innovation and the performance of group cohesiveness. At this point, you’re probably asking why the diversity of skills is so important. The simple answer is that SMEs that may lack diversity in the workplace cannot share their knowledge. With an effective diversity strategy, global leaders may improve knowledge sharing and learning that can eventually enhance financial performance in global markets through empowering human resources and enabling change at the organizational level. Executives can increase workplace diversity to facilitate knowledge sharing and build relationships, aiming at improving customer satisfaction through acquiring additional knowledge from customers, developing better relationships with them, and providing a higher quality of service and/or products for them. Furthermore, creating an expert group or steering committee may be short-sighted because such groups may not have sufficient diversity to comprehend knowledge acquired from external sources.
Leadership in some SMEs has failed to pay attention to this important matter and create a team that makes diversity a priority and represents a variety of ideas and perspectives. A leadership status that is not only a failing platform but one that represents destruction as opposed to innovation and expansion. This leadership gap can provide lessons for CEOs and executives in today’s organizational challenges. The fact remains that leaders that manage diversity and use it as an important driving force for financial success find their SMEs to be more competitive and on the cutting edge.
Therefore, when SMEs can have a very diverse employee population, they will secure a foothold in the ever-expansive global business environments.