Successful leaders are undertaking initiatives to address Diversity, Equity, and Inclusion (DEI) within their organization to assess company culture, structures, practices, and policies – in particular, ones that create bias and an uneven playing field capable of causing damage to organizational health and performance. The need for diverse talent in the workplace is evident with a clear correlation between DEI practices and organizational effectiveness. Now, more than ever, it is necessary for executives to develop a shared vision, create learning environments, and embrace these initiatives – both for the sake of ethics and because this is what it will take to compete in the future. Let’s discover more about DEI and why it is important to an organization’s health.
What is Diversity, Equity & Inclusion?
- Diversity is about the presence of difference within a group. This is where differences of race, ethnicity, sexual orientation, gender/gender identity, and religion should be considered for their presence at all levels within the organization.
- Equity is all about ensuring equal access to the same opportunities. This is the proverbial “equal playing field” and where barriers to opportunities or resources need to be eliminated. In order to achieve a fairer workplace, it is essential to observe unconscious bias in policies, practices, structures, and resources.
- Inclusion is about cultivating a culture that invites and encourages the feeling of being welcomed, valued, and incorporated into the workplace. Inclusion can be more difficult to address because the overall culture of the organization largely determines it. This means that discovering the root causes behind a lack of inclusion can be harder to pinpoint.
3 Reasons Why Companies Should Embrace DEI
Among the many reasons to address the issues of Diversity, Equity, and Inclusion (outside of the ethical perspective that it is the right thing to do) there are three that stand out:
- “War for Talent in the Workplace” – There is now, and will continue to be for the foreseeable future, a war for talent in the workplace. This has only been reinforced during the post-Covid “Great Resignation”. DEI programs address bringing more diverse talented employees into the organization while also increasing retention as it makes it a more attractive place to contribute to and grow in. A high performer is more likely to select an organization that has an aggressive DEI program and is more likely to stay because that program allows for them to make a significant difference and values their development.
- “Diverse Organizations Outperform Peer Organizations” – There is ample evidence that more diverse organizations outperform similar, but less diverse organizations. A recent McKinsey study found that diverse organizations outperform industry averages by 33%. This Is because those organizations that can take advantage of diverse teams will have insights and opinions with that are more accurate and nuanced to the environment than ones from a more uniform perspective. In addition, teams that can take advantage of diverse knowledge and experience are more innovative and creative as their diverse viewpoints help them come at problems and solutions from different perspectives. Clearly, organizations that serve ever wider and more diverse consumers will be less likely to understand their customers’ needs and perspectives if those same demographics are not present in the organization serving them.
- “Outside Expectations“ – There is mounting pressure for reporting diversity numbers and DEI programs with mandatory Environment, Social, Governance (ESG) reporting for the SEC. In addition, activist investors are also demanding that organizations make significant progress in addressing inequity and lack of diversity in their investments. There is also evidence that consumers are increasingly making buying decisions based on issues such as commitment to sustainability and equity.
What should DEI efforts consist of?
Diversity is perhaps the easiest concept to understand and measure as it can be accomplished by surveying the organization. Race and gender are typically easier to measure, whereas traits like identity can be more difficult, requiring a more nuanced approach with involvement from the broader organization (most importantly by those who are in those categories). Typically, initiatives include at least some of the following:
- Key Metrics – Identification of where they are on key metrics such as employee diversity, retention, representation in key leadership positions, and defining what they intend to achieve by instituting a program.
- Training – Global training on unconscious bias and its impacts on relationships, participation, and performance serves as a baseline for further efforts.
- Policies and Procedures – An assessment of policies and practices in the organization which might provide barriers for recruiting and retention, inclusion, and creating an unequal playing field should be conducted and addressed.
- Mentorship and Sponsorship – Another key element is the creation of mentorship programs that attend to the particular barriers that diverse employees face, including a special emphasis on diversity in high-potential programs. Sponsorship Is advocacy for Individuals to be Included In opportunities to gain experience and visibility.
- C-Suite Positions – A focus on ensuring a presence of diversity in the C-Suite and Board of a company is necessary from the start to show commitment and provide advocacy for the program.
Culture is Key
A genuinely successful DEI program not only hinges on the design of the initiatives but on the culture that it is embedded in. Cultures emphasizing learning and growth far outpace organizations emphasizing authority, control, rules and tradition. Leaders need to develop a shared vision to be a “learning organization” that provides the space to understand and accept the realities of the current state, then commit to finding avenues to change toward that vision. The CEO and executive team have the most influence over changing aspects of the organizational culture. Truly, the executive leader must commit to exemplifying the change that is desired for the organization. Changing the culture is a long-term effort that demands that the Board support it and the leadership team must be willing to both embody the change and provide the Initiative to enact It.
It is the primary duty of the leadership of any organization to create an overall safe, welcoming workplace environment for those of all races, creeds, identities, and ethnicities where everyone’s contribution is appreciated and promoted. To do this the CEO and senior leadership will need to take that intention and do the hard work of actualizing this by uncovering implicit bias in practices, structures, and allocation of resources and create the platform for all to provide their contribution. Forward-thinking leadership is now taking up this challenge and leading the charge.
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