Investing in Diversity & Inclusion

Diversity in Hollywood and the Business Case for Inclusivity


On the silver screen, bringing more marginalized people into visible roles is a priority for many. While inclusivity is commonly posited as simply the right thing to do, according to the Los Angeles Times, a study on diversity in Hollywood by the Creative Artist Agency (CAA) shows that it may also be the right choice from a business perspective. The study found that across every budget level, films with diverse casts outperformed more homogeneous releases. And not just by a little bit. Diverse films perform nearly three times better on opening weekend.

This is in part because they attract a more diverse audience, according to the CAA. “One of the interesting things that the most successful movies share is that they’re broadly appealing to diverse audiences,” Christy Haubegger, leader of CAA’s multicultural development group, told the LA Times.

However, as noted by Variety, despite the high-grossing success of films like Hidden Figures, diversity in Hollywood has risen little in the past decade. Not to mention the #OscarsSoWhite social media backlash that emerged in 2016 after two consecutive years without a single black nominee in any of the Academy’s four acting categories.

Whether Casting or Hiring, The Problem Starts Early

When Viola Davis won the 2017 Academy Award for Best Supporting Actress for her role in Fences, she gave a moving speech about how many people with great potential are shut out and left unable to achieve their dreams. This is not just a problem for budding actors, actresses, and directors. Studies have shown that women and people of color are shut out of promotions, especially when they advocate for more diversity.

Hiring, too, continues to be an area in need of improvement. In order to channel more marginalized people into the highest rungs of leadership, they must be recruited early in their careers and mentored. Before even getting to that point, however, it’s necessary to attract qualified applicants. The CAA itself has reportedly made an effort to find such candidates for its internship program, before going on to hire them full time.

There’s a reason companies should put the work into improving in these areas. Just like movies, businesses do better when they are diverse. A 2015 analysis by McKinsey & Company, for example, found that the most gender-diverse companies were 15% more likely to outperform their peers. For ethnically-diverse companies, that number jumps to 35%. And study after study has confirmed that diverse groups make better decisions, according to the Harvard Business Review.

A Workplace Culture Lesson from Pop Culture

“People want to see a world that looks like theirs,” said Haubegger about films, and the same applies in the business world: People want to work at companies where they feel represented. For diverse employees to truly thrive and bring their full value, they must have a supportive and affirming atmosphere. As CIO pointed out, “someone who fits the culture” can too easily be interpreted as “someone who’s like me.” Companies that work to consistently educate and challenge themselves on diversity issues may be more likely to see success.

Companies must also consider diversity a value worth investing in. A few company-wide emails and a paragraph in the employee handbook are not enough to address systemic issues. Given the business case for creating a diverse workforce, some companies are demonstrating their willingness to put money into inclusivity initiatives. In 2015, Intel announced that it had created a $300 million fund aimed at improving the diversity of its workforce and attracting more women and minorities into the industry by 2020.

Celebrating diversity is another important way organizations can do better. Highlighting and lauding areas positive actions on diversity can be a powerful motivational tool. For example, according to Inc., announced its company-wide values and then recognized people at all levels who were already embodying them.

Broadening Definitions of Diversity

The more broadly companies can think about diversity, the better. Thinking proactively about including people of different ages, religions, sexual orientations, and socioeconomic backgrounds can put an organization ahead of the curve.

As definitions broaden, flexibility is key. For example, an organization may want to consider revamping its benefit package to allow time off for additional religious holidays and making sure parental leave policies recognize the unique needs of LGBT families.

While it takes time and effort to diversify an existing workforce, it’s a shift worth making. Companies that can truly create a diverse workforce are poised for success going forward.

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