Why Inclusive Organizations Win When It Comes to Profits and Innovation
DEIB (Diversity, Equity, Inclusion & Belonging) is key to building the ‘S” in ESG (Environmental, Social and Governance) management. If that sounds like one acronym too many, let me put it another way. Inclusive leadership, where all voices are heard, drives high levels of engagement, company-wide consistent customer service, and ultimately, improved financial performance. If your people are your best asset, how well are you listening?
Read on to get past the data and the jargon to the solution.
‘Gender and racially diverse teams perform better, innovative more and improve economic equality.’
– Stephanie Lampkin
(CEO of the merit-based recruiting platform, Blendoor)
Leading research consistently shows that the benefits of a diverse, culture-rich workforce include a positive impact on financial performance and increased innovation.
The Harvard Business Review 2018 reports that ‘Companies with above-average total diversity, had both 19% points higher innovation revenues and 9% points higher EBIT margins, on average.’ According to the Wall Street Journal 2019 article, ‘Diverse and inclusive cultures are providing companies with a competitive edge over their peers.’
The race is on. Deloitte research has found that globally, the percentage of both retail and institutional investors that apply ESG principles to at least a quarter of their portfolios jumped from 48% in 2017 to 75% in 2019.
1. ESG (Environmental, Social and Governance)
Historically, companies that recognize the importance of adapting to socio-economic and environmental conditions are better able to identify strategic opportunities and meet competitive challenges.
ESG is key for showing investors and customers that you have solid and socially responsible business management in place. Ultimately, stakeholders choose brands just like they do people, based on trust and how well they enjoy their company.
Organizations with strong ESG attract and retain top talent. Millennials care deeply about the values of the companies they work for, and environmental and social responsibility are very important to them. When brand and employee values are aligned, a common purpose drives loyalty and productivity, strengthening organizational performance.
2. DEIB (Diversity, Equity, Inclusion & Belonging)
DEIB is the link between your brand and your ability to deliver on the ‘S’ in your ESG strategy.
Brands with a high sense of purpose have experienced a brand valuation increase of 175% over the past 12 years compared to an average of 86%, as per Kantar Consulting's Purpose 2020 report.
A clear DEIB strategy builds a culture where every employee is involved and can deliver their best, driving people’s behaviors from the top down, which also guides your teams' ability to provide a memorable and engaging customer service experience.
A strong DEIB strategy is not just a tick box on your corporate agenda – it relates directly to creating customer trust and strong competitive advantage. Research continues The more diverse and inclusive any organization is, the more profitable and innovative it is.
If most lasting change is driven from the grassroots, how easy is it for all levels of your organization to help drive things forward and promote success? How good a job are you doing at listening and actioning?
1. Audit for Unconscious Bias
When I work with clients to review their DEIB strategy, we always start out with a deep dive self-audit toolkit to check for blind spots in best practice and performance, looking at how well you are tracking your VOC (Voice of Customer), and focusing on policies and procedures in HR, Management and Operations. This requires a growth mindset approach, a willingness to challenge the status quo through analytical maturity, and the practice of active listening.
Auditing your company for potential bias and mismatches with customer demographics as a first step means you'll be better equipped to start making fairer, more productive decisions in the workplace.
When people think of diversity in the workforce, most think about how employees and executives within the organization are represented. In the humbling words of Jenny Lay-Flurrie, Microsoft, ‘A disability can affect any one of us, at any time.” There are other things to consider, such as the structures and processes within the organization that can promote or hinder diversity, and protect both physical and mental health and safety.
2. Broaden your Inclusivity
It’s important to be inclusive in DEIB strategies; it shouldn’t be limited to those employees you consider disenfranchised or to areas where issues have been flagged. When people from different ethnicities and cities come together, the cumulative perspective they bring has been shown to be a key driver of innovation. If you are only reactive, it is a real missed opportunity, when you could be harnessing the incredible power of DEIB, and the richness of ideas and inputs available across your teams.
Diversity is bigger than just gender and race. It includes culture, age, education, socio-economic status, and mindset. The conversation and solutions should be open to everyone, underpinned by a company culture where every voice is welcome, heard, and respected.
Some great tools for inclusivity include:
• Strong governance (builds clarity of space, clarity of responsibilities, and clarity of goals and strategy)
• Onboarding strategy (every new hire knows your company is a safe place; gender, race, culture, (dis)ability.)
• Cross-department, multi-level project teams (ensuring no customer touchpoint is missed)
• Build a multi-generational workforce (leveraging different workplace skills/approaches)
• Segment employee engagement survey results by minority groups (to dive deep into what employees care about)
• Reflect everyone’s needs and preferences at everyday gatherings or company celebrations (helping to make people feel comfortable at work)
• Creating an Inclusive Workplace Culture (rethinking workforce policies e.g. different cultures have different holidays.)
• Leverage online collaboration communication tools (allowing for dial-in across locations and departments, and encouraging a culture of frequent check-ins)
3. Foster Male Allyship
According to Mckinsey’s Women in the Workplace 2020 survey, only 8% of men believe their gender has played a role in missing out on a raise, promotion, or chance to get ahead, whereas 37% of women believe this to be true. According to the Promundo-US (2019) survey, while 77 percent of men report doing “everything they can” to support gender equality at work, only 41 percent of women agree.
Male Allyship is the new buzzword for a reason – it’s a clear way to bring all sides together to make the workplace more inclusive, especially as senior positions of power are still dominated by men. According to Promundo Global’s 2019 report, ‘Across 82 large companies, fewer than 5 percent of CEOs are women; in these same companies, men hold 62 percent of managerial positions to women’s 38 percent.’
When men are engaged in the work of workplace equity and actively champion the women and minority groups in their networks, they become advocates who can promote change inside out.
For example, organizations such as the U.N. Global Compact have pledged against taking part in all-male panels, recognizing the importance of more women having access to high-profile speaking opportunities.
How Male Allies can make a difference:
• Acknowledge inequity (value equity and actively work to achieve it)
• Education (lack of awareness can keep even well-intentioned men on the side-lines)
• Share opportunities (actively seek inclusivity at company meetings, panels and events, and in the make-up of project teams, work silos, and committees)
• Actively practice behaviors and vocabulary that promote equity (notice team dynamics, ensure the correct credit is given)
• Go to the source (talk to women, people of color, people with disabilities, and other less dominant groups, and ask what help they need. The only way you can truly be sure of your team’s concerns is to ask them.)
• Be visible and speak up
Truly effective Male Allies are prepared to make a public stand and consistently call others out, engaging in those open and tough conversations about behaviors that don’t fit your culture.
‘A nation's culture resides in the hearts and in the soul of its people.’
- Mahatma Gandhi
Research shows undeniably that inclusive leadership drives high levels of engagement and company-wide consistent customer service, making inclusive organizations winners when it comes to profit and innovation.
This makes it imperative for companies is to build in robust data points across all employee and customer touchpoints, to ensure that inclusivity and social responsibility are at the heart of your brand mission, values, and purpose. During this post-pandemic recovery period, the question every company should be asking is, ‘How strong is the ‘S’ in our ESG strategy?
*This article was originally posted on Linkedin