Diversity and inclusion: why companies must take a stand
“Diverse and inclusive cultures are providing companies with a competitive edge over their peers” – from The Wall Street Journal’s first corporate ranking that examined diversity and inclusion among S&P 500 companies.
Diversity is one of those topics that companies touch on every year. They promise to increase diversity and inclusion, and a lot of companies do. But this trend is slow going, and most businesses still have devastatingly low levels of inclusion, especially at higher levels within the organization.
The movement has gained a lot of traction and attention in the past few years, due to the tragedies involving police shootings, the death of George Floid, and the exposure of deeply rooted institutionalized racism.
Obviously, this is a point that we need to take a stand against, both as individuals and organizations. But there’s more than just moral reasons to increase diversity ad inclusion. If industries won’t listen to their hearts, maybe they’ll listen to their wallets.
While this might seem unnecessary, it’s important to point out that inclusion and diversity are not as simple as “hire more people of color”. Much like its definition, diversity can be defined in a variety of ways. And don’t think that diversity is the same as inclusion either! The two may be interconnected, but they are far from interchangeable.
Diversity is related to the representation or make-up of an organization. Inclusion is related to the weight given to the contributions, presence, and perspectives of different groups. A company can be diverse while not being inclusive.
A good example of this is an organization where 50% of the employees are women, but 100% of their managers are men. Hiring a diverse workforce is extremely crucial to help push diversity forward, but not allowing them to ascend to higher positions within the company is no different than keeping them around as tokens.
But what exactly is a diverse workforce? Diversity can take many forms, from age, gender, and ethnicity, to race and sexual orientation. These are considered inborn traits, but it’s also important to incorporate other forms of diversity as well, like different economic backgrounds, nationalities, assorted areas of study (industry backgrounds), career paths, and veteran status.
Managers and teams that have a mix of inherent and acquired forms of diversity are the most productive overall. And smart management knows that their businesses benefit from attracting a diverse workforce. Maintaining a welcoming and inclusive culture within your organization also helps acquire and retain talented people.
In a recent survey, only 16% of corporate directors stated that they believe their corporation’s recruitment was excellently diverse. Only 15% stated that their executive development programs met that same standard, while 83% believe that businesses should be doing more to promote diversity and inclusion.
Clearly, these directors view diversity as a powerful business opportunity; our hope is that this article can do the same for you.
Diversity within companies and social inequality
Social inequality is present in all societies across the globe. Governments, NPOs, and private companies have been trying to tackle how to lower inequality from various angles. But inequality’s truest kryptonite is inclusion.
“Give someone a fish; you feed them for a day. Teach them how to fish, and you feed them for a lifetime.” This popular saying is usually brought up to address the benefits that education can have on the populace, but it’s very well suited for diversity as well.
The best way to increase someone’s standard of living is by giving them a better job than the one they have. Better hours, better pay, and healthy work environments are all things linked to increased living standards.
People in these positions have more money to spend, invest, and put back into the economy. This means that lowering social inequality has a direct positive impact on a country’s economy. This, in turn, leads to a direct appreciation of businesses within that country.
But maybe this benefit seems a little too indirect to convince certain people.
The effect of diversity and inclusion on innovation
Anyone who works with innovation and Design Thinking knows that diversity and inclusion have a direct connection to the increase in quality for products and services.
That’s because these areas aren’t looking to simply create new technological solutions: above all, innovators and designers seek to improve the quality of life of other human beings, create outstanding experiences, and deliver value.
Innovation is primarily a human-centered practice. One of the key elements of Design Thinking is, after all, empathy. Some people might think that this is a question of ethics, and while societies and companies should be changing their goals from the bottom line to ESG principles, empathy has a direct link with generating innovative solutions.
Most businesses don’t make products with just a single echelon of society in mind. Most products are targeted at everyone. After all, the more people that buy your product, the better. But more often than you think, companies design products with teams lacking in diversity. The consequence of which are products that don’t represent the needs and desires of a large portion of the population.
Having a diverse team of professionals drastically increases the chances that products and services will adhere to a wide range of customers. People from different backgrounds can offer a wide array of viewpoints and opinions, something that is critical to innovation.
Still not convinced? Let’s move on.
ESG principles, diversity, and the modern consumer
We are living through historic times. The global pandemic has forced everyone to go 100% digital, individuals and companies included. Even if a portion of the population goes back to their old ways, the average consumer has gotten much more tech-savvy.
Businesses are starting to see a shift in their purchase journeys. The modern consumer has become more discerning, skeptical, and demanding. This means that people will no longer turn a blind eye to topics they feel strongly about, and something that everyone seems to care a little more about each year is ESG.
→ Content you may like: All About ESG: the acronym changing the market.
The world is starting to wake up to the social and environmental injustices occurring around them. This means that if companies want to stay competitive, they’re going to need to bend to those wishes.
The ever-growing mass of social media users means that companies are no longer allowed to operate in the dark. Whistleblowers are becoming more and more common, and this has spread to more than just large-scale scandals like NSA spying and Russian athlete doping.
Companies that have traditionally lacked in inclusion and diversity are starting to feel the heat of angry consumers demanding rectification. On the other hand, companies that truly and actively promote diversity are being praised. Diversity is getting more popular by the minute, and companies need to start paddling now if they want to catch this wave.
By now, there should be no questions as to the abundance of benefits and opportunities provided by diversity and inclusion, but one question still remains.
How to foster diversity and inclusion?
Getting started is not easy, but every step in the right direction is essential. To foster diversity and inclusion, it is necessary to abandon old habits and embrace a change in corporate mindsets and culture. The first piece of advice we can give you is to rethink your selection process.
A lot of companies (especially in the US) have strict policies when it comes to their selection process for new hires. The biggest hurdle for some is an underevaluation of non-native speakers. Companies like Google have taken this notion to heart, lifting a lot of their restrictions regarding new hires’ level of fluency in English.
This next tip might seem obvious, but we’re obligated to remind you of it: strengthening diversity among corporate leaders. This step is essentially “be more inclusive”, but it runs deeper than that. Having a diverse group of executives is not only the definition of inclusion; it also creates a positive feedback loop for diversity. Diverse executives will naturally prioritize the improvement of diversity throughout the organization.
Perhaps the most holistic approach to increasing diversity and inclusion is promoting a safe and welcoming work environment. People from traditionally ostracized and marginalized groups are not blind to the challenges and prejudice they face. Fostering a work environment that actively encourages and celebrates diversity can give your employees a platform from which to proudly and securely promote their ideas and opinions, fostering inclusion.
The case for diverse and inclusive businesses should honestly speak for itself, but sometimes it needs an extra push to really penetrate the barriers caused by institutionalized exclusion.
If you’re looking to start a diversity and inclusion program within your organization, why not reach out to one of our consultants? We know getting started can be difficult, but a little help can go a long way. Remember, you don’t have to go it alone.