Can employee networks within corporations make significant contributions to the bottom line? According to a growing number of organizations, the answer to that question is an unequivocal yes!
Take, for example, the airline company whose faith-based employee resource group helped the firm tap into a huge convention travel market that resulted in millions of dollars in revenue. In fact, in a 2015 research paper published by the Institute for Corporate Productivity (i4cp) titled “Diversity and Inclusion Practices that Promote Market Performance,” it becomes very clear that one of the key ways that organizations maximize the business value from diversity and inclusion investments is through the leveraging of ERG assets.
This landmark research paper further explains how organizations that get a greater business return from employee networks do so by strategically leveraging diverse perspectives from these groups to guide key business initiatives. Here are just three areas where ERGs can have a business impact, according to the report.
1. ERGs can provide advice and/or guidance on go-to-market strategies for new markets or demographics being pursued by the company. For example, one lesbian, gay, bisexual, and transgender ERG based out of a health care center in Massachusetts helped their company capture the patronage of a large percentage of the LGBT community in the area by influencing the design and services offered at a new facility with their insights and perspectives.
2. ERGs can generate new products or services that appeal to specific markets or demographics. The airline example I shared above illustrates this and so do countless others where organizations across various sectors have discovered vast, formerly untapped pockets of opportunity courtesy of their ERGs.
3. ERGs can broker connections to key communities or business sectors. One company I worked with was looking for business partners in the public sector for their new infrastructure development and financing offer. To their pleasant surprise, it turned out their company’s Hispanic ERG had developed a strong relationship with the mayor of a community that needed new infrastructure and financing. This urban area actually had a number of sites that had previously been used for industrial purposes and were essentially ready for re-occupation and operation. By providing a few key introductions, this ERG paved the way for a lucrative business partnership.
I could easily add countless more examples to this list. The key for tapping into this treasure-trove of opportunity is to simply shift ones mindset and start looking at ERGs as an asset as opposed to only a PR or employee-branding tool that helps your organization win “vanity awards.”
It is truly amazing how organizations will often hire high-priced consultants to help them come up with insights on how to market a new product, reach a new client or connect with influential people while ignoring the value that exists right within their walls in the form of employee networks.
It reminds me of a story titled “Acres of Diamonds” told back in the 20th century by a traveling speaker named Russell Cornwall. It’s the story of a man who heard from a traveling priest about the great wealth being built by others who staked out claims in diamond minefields. Fired up by the stories, the man sold his property to go off searching for diamonds. Years later, after the man died penniless in his unsuccessful search, another priest visited the new property owner. Marveling at the huge rock on the fireplace mantle, the priest asked, “Where on earth did you find that massive diamond?” “Why, this land is littered with those rocks,” replied the man.
The moral of Cornwall’s story was that we should seek the diamonds in our own field before abandoning it in search of riches elsewhere. Likewise, my advice to companies is that before they invest in the engagement of external resources to reach new markets and demographics, it might be prudent to explore the value existing in the ERG resources in their own backyards.