5 perks of fully committing to diversity & inclusion
How your business can thrive with a total-organization commitment to D&I
This two-part article series details the importance of making a total-organization commitment to diversity and inclusion.
When you think of diversity and inclusion what do you think of? Perhaps race, bias, prejudice, unfairness? Maybe all of these things? But why don’t you first think of creativity? Or openness, drive, and excellence?
Therein lies one problem with diversity and inclusion in the halls of corporate life. The very definition can be problematic.
So is it being solved? Yes and no. Some companies are doing better than others.
Today,96-98%of large companies above 1,000 employees now have diversity and inclusion (D&I) programs. Sounds good, right?
The problem is that the same research also found that about 75% of employees in underrepresented groups (women, racial and ethnic minorities, and LGBTQ workers) don’t believe they’ve personally benefited from their companies’ D&I programs.
While part of the issue could be poor communication of D&I initiatives and their results, more often than not, the programs aren’t robust or prioritized. They are treated as one-offs rather than as whole-organization missions.
Let’s explore five key benefits that can result from a total organization commitment to D&I:
#1 – Increase profits
There is powerful evidence that diversity on the executive team—gender as well as ethnic and cultural—has a positive influence on profitability.
Companies in the top quartile for gender diversity on their executive teams were found to be 21% more likely to experience above-average profitability than companies in the bottom quartile. For ethnic and cultural diversity on the executive team, the finding was a 33% likelihood of outperformance.
Yet research shows that executive teams lag in diversity. Almost half of organizations have C-suites in which less than 10% of executives are women. And 12% have no women among their top executives. Statistics on ethnic diversity in leadership are similarly depressing.
Diversity in areas outside of leadership roles are also connected with strong economic benefits. Increasing opportunities for underrepresented groups has the potential to add trillions in revenue. Looking at women alone,a 2015 report found that $12 trillion could be added to global GDP ($3.1 trillion in the North America and Oceania region) by 2025 by “advancing women’s equality and closing gender gaps in work and society.”
#2 – Superior innovation
Innovation has long been hailed as a primary benefit of workplace diversity, the logic being that varying perspectives lead to more insights and better solutions.
A 2018 North Carolina State University study provides confirmation. Co-author Richard Warr, a professor of finance at the university, states that the study reveals that“there is a causative link — it’s not just correlation. And the finding extends across a broad range of industry sectors.”
Additional research shows that“companies that embrace diversity and inclusion in all aspects of their business statistically outperform their peers.” In fact, these high-performing companies are 1.7 times more likely to be innovation leaders in their market.
#3 – Protect company reputation
Companies’ diversity or lack thereof is increasingly under the spotlight, and the public perception of a company’s diversity can have a significant impact on its reputation. Sabrina Clark, associate principal at SY Partners, a consultancy specializing in organizational transformation, told CIO, “Companies that lack diversity are being called out publicly, and may even be losing business, not to mention falling behind when it comes to recruiting. Even Google is starting to show signs that their lack of diversity is affecting them.”
Clark added that public demand that companies prioritize diversity and inclusion isn’t going away. “It’s going to continue to be important, and the voices demanding it are only going to get louder.”
#4 – Strengthen connections with customers
Companies that excel in diversity and inclusion connect better with customers. Having a diversity of skills and experiences enables employees to better relate to and understand clients. Plus, members of underrepresented groups can help ensure that products and marketing materials are designed to be inclusive of those groups.
#5 – Reduce risk of liability
Fully committing to diversity and inclusion includes purposefully creating a culture that promotes fairness and equality for all employees, as well as adopting vigorous anti-discrimination policies that are consistently enforced. As a result, people are discouraged from discriminating against others in the workplace and encouraged to speak up when they witness discrimination.
From a liability perspective, this is important. Discrimination complaints are quite common and can be costly both financially and to an employer’s reputation. The Equal Employment Opportunity Commission reported receiving 76,418 workplace discrimination charges during the fiscal year 2018.
A recent gender discrimination report explains how problems can fester when action isn’t taken against discrimination. “Sexual harassment, hostile work environments, pay gaps, and other acts of gender discrimination tend to rapidly multiply when those who observe discrimination don’t report it, or fail to intervene. Bystander inaction isn’t illegal, but managers or supervisors who do not report inappropriate behavior can create liability for their company.”
Part 2 of this article will detail the powerful workforce benefits you can achieve when workers believe in your commitment to diversity and inclusion.