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Utah Business

In a September column, Roy Banks, CEO of Weave pens an open letter to his peers on diversity in the workplace.

An open letter to businesses about diversity

While diversity is a challenge in tech overall, it’s an even bigger issue in Utah where the state has lost out on big contracts and large companies putting down roots elsewhere because of the lack of diversity in the state. 

The Silicon Slopes community needs every C-suite executive, every startup owner, every leader to get behind solving this problem to maintain and grow our thriving tech sector. The stats are clear—diversity isn’t just a buzzword or a “nice to have.” Diversity can positively impact and grow businesses.

For instance: 2020 was an incredibly hard year for small businesses. But it was also a year marked by innovation and creativity. New normals for consumers and businesses alike drove quick adaptation and modernization. Companies who fared well in the pandemic got down to business, got creative, and innovated to solve hard problems. 

At Weave, we had to innovate quickly when Covid hit in order to help our small business customers adjust to unprecedented limitations on their operations. Within the month of March 2020 alone, Weave launched free continuing education courses and business consultations with our customer success teams and adapted our product to help our customers send and receive wellness forms, facilitate curbside dropoff, and pick up and provide touchless payments.

But innovation isn’t just something you turn on in your team like a light switch. Creative problem solving fosters innovation and it has to be cultivated. I believe that core to creative problem solving is diversity. A foundational study by Scott Page found that diversity—specifically cognitive diversity, or people perceiving and analyzing problems differently—led to more innovation in teams. And cognitive diversity strongly correlates to identity diversity. 

And companies that report the highest levels of racial diversity experience 15 times the sales revenue compared to companies with the least racial diversity among their employees. Why is that? It points to something that we talk about a lot at Weave—customer obsession. Customer obsession helps build great products, it helps drive teams to identify opportunities others may have missed and can be a huge innovation driver in and of itself. But in sales, customer obsession and connection are what it’s all about.

A study by the Harvard Business Review found that a team with a member who shares a client’s ethnicity is 152 percent more likely to understand that client than another team. That understanding builds trust and stronger relationships. That’s why we focus on hiring minorities and people with different backgrounds at Weave and we have a strong track record of doing so. For businesses, customer experience is crucial to success. And in sales, in particular, relationships are everything. Having sales team members from diverse backgrounds can build stronger relationships, understanding, and feedback from your customers. 

And let’s not forget—the workforce, consumers, and business owners are all increasingly diverse. Some of the fastest-growing segments of small business ownership in the country are women, Hispanic, and Black business owners. Increasingly, diversity is highly valued by talented, high-performing people. We all want those people on our team. A more attractive hiring brand is a key benefit of diversity.

Weave’s mantra is “people, not employees.” And while this way of thinking predates me at Weave, when I came into the CEO role, I was so impressed by it. In fact, many Utahns know very little else about Weave except our commitment to that statement. Part of treating our teams as people is recognizing and honoring their whole selves. It’s been a powerful tool for our business in attracting new talent both inside and outside of Utah.

A Glassdoor study found that 67 percent of job seekers consider workplace diversity an important factor when considering employment opportunities. The richness of backgrounds, stories, and cultures is part of what running a company is all about. Current top-performers also care about diversity in the business. Keeping them and all of their institutional knowledge is important.

Equitability is also important for retaining employees. Another survey found that 40 percent of employees leave a company after experiencing harassment, bullying, or stereotyping. People vote with their feet and will find a place to work where they feel safe to be themselves and valued for their contribution.

Many business owners and leaders are not just beholden to employees and colleagues, they also have current and future investors to consider in business planning. The bottom line, profitability, culture, hiring, and employee retention are all impacted by diversity. And investors care about all of those aspects of our businesses.

In fact, when firms use commonly accepted “best practices,” such as the inclusion of diverse groups in hiring, they receive higher valuations in the market. Why? Because implementing these norms is a sign of competent management for investors. But it’s not just a way to improve value to investors. Research has found that markets actually penalize those who break these norms. Diversity isn’t just important for the bottom line today; it can drive success for years to come by attracting the right investors.

There are many ways to build a valuable company. I believe diversity is one of the most accessible and impactful strategies we can undertake as business leaders. It’s never too late to begin doing better.

Roy Banks is a five-time CEO/president and veteran of the United States Navy with over 25 years of public and private company leadership, executive management and operations experience in sales, marketing, finance, IPO, mergers and acquisitions, product management, development, manufacturing and channel distribution of products and services. Over the course of Roy’s career, he has generated approximately $4 billion in investor and shareholder value. He possesses strong business acumen and in-depth knowledge in high-tech, fintech, SaaS, go-to-market sales platforms, payment processing, merchant services and e-commerce. Roy is a proven business executive capable of building and managing next-generation growth companies that increase enterprise value and generate significant investor returns and exit outcomes through IPO, strategic buyers and financial sponsors.