Diversity is the mixture of one or more characteristics – such as race, nationality, ethnicity, gender identity, sexual orientation, disability, age, or social class – in a group of people. A measure of diversity will, in this sense, simply be a matter of reporting the extent to which a set of specified characteristics are present in a group relative to the size of the group.

There is an increasing body of evidence that diversity in leadership leads to better outcomes in all kinds of organizations. One way to accelerate progress would be to measure the diversity of leadership teams at the organizational level to address existing disparities. This information can be used to inform hiring and recruitment practices. There are many benefits of diverse leadership teams.

• Different groups of people have different life experiences, and thus different perspectives, knowledge, and insights. It is important that these experiences and perspectives are represented in leadership; otherwise, decisions tend to be made that consistently undermine, ignore, or even harm underrepresented groups of people. 
• Diverse leadership teams may also lead to lower-level employees feeling more included, and thus more productive. When employees see a diverse leadership team that represents them, they may reflect more positively on their own potential and feel more comfortable existing as their “authentic selves". Feeling adequately represented by one’s leadership team may make an employee feel safer in expressing their own experiences and perspectives.
• Diversity in leadership leads to better financial outcomes and operational productivity. 
• Other benefits of diverse leadership include the ability to obtain and retain top talent, improved customer orientation, and improved employee satisfaction.

All of the benefits (and challenges) that result from diverse leadership apply to diversity in the workplace in general. There is also evidence that diversity across an organization has profound implications on that organization’s ability to grow and remain sustainable.

• Diversity helps organizations obtain and retain top talent, more easily communicate with customers, access multicultural markets, and expand both locally and globally.
• Diversity also plays an important role in an organization’s ability to innovate.
• Diversity may also improve functionality and productivity in the workplace. Organizations that build diverse teams are simultaneously likely to build cultures that place a high value in respecting others and differing opinions. This helps with conflict resolution and other situations that demand mutual respect.
• Diversity may also help improve creativity, problem-solving, and the ability of organizations and their staff to adapt to changes.
• A high level of respect amongst co-workers improves internal problem solving, thus minimizing liability for employee complaints that would otherwise escalate into formal litigation. Enhanced creativity and problem-solving may also result in avoided costs by increasing internal capacity and reducing the need for external consultation.

A diverse range of skill sets and a diverse age range better prepares an organization to plan for, respond to, and recover from turnover, retirements, and resignations. This type of planning is referred to as “succession planning” and is a critical component to ensuring the sustainability, adaptability, and efficiency of an organization. The benefits of generational diversity are numerous.

• Diverse skill sets. Younger generations tend to be skilled in high-tech business mediums like social media and online marketing, whereas older generations are skilled in situations that require interpersonal, face-to-face communication skills. This diverse skill set is particularly useful for organizations that cater to diverse demographics. 
• Technology. Knowledge of and skills in computer technology are essential in today’s economy, and all age ranges must embrace this reality to be successful. Younger professionals have greater familiarity with business technology tools, and organizations can utilize this internal capacity to help educate older employees.
• Tradition. Just as younger generations are credited with having good working knowledge of business technology, more mature members of a workforce have the advantage of traditional business skills. Traditional business skills are still highly relevant and are appreciated by older customers.
• Mentoring. Having a diverse workforce increases internal capacity (and can thus reduce costs) because employees of all ages can learn from and share with one another.
• Continuity. A workforce that is primarily composed of either older or younger employees increases risks related to the sustainability of an organization. Mature employees accumulate years of on-the-job practical experience that can’t be taken advantage of if they aren’t present. Conversely, too many mature employees leave organizations more vulnerable when those employees retire. When a worker retires, you lose someone to do a job and the accumulated knowledge and expertise that this person takes out the door with him. If many people are retiring and they’re difficult to replace, your organization faces what we call capacity risk—a potentially diminished ability to carry out the company’s business of making a product or offering a service.