It’s been proven time and time again that companies with higher levels of ethnic and gender diversity perform better than other companies. On the other hand, research shows that companies with less diversity are more likely to be less profitable.
So what’s keeping companies from fostering a more diverse workplace? For some, it could be the misconception that diversity and inclusion programs are no longer relevant. For others, it may be the trepidation that diversity and inclusion programs are much too daunting of a task to undertake. Still others may not feel empowered to make large scale change on their own, and will need to make a case to their C-level executives for support. Nonetheless, diversity and inclusion programs are indeed still relevant, and can be easier to implement that you might think.
Below, we’ll talk about why diversity and inclusion programs matter, what is considered a “successful outcome”, and the key steps to take for organizations to improve both diversity and inclusion.
Diversity and Inclusion: Still Relevant?
In this day and age, it’s easy to think that we’re at a point in American history where we no longer need to focus on equity efforts. We elected an extraordinary African American president, women are more than half of college students on campuses across the nation, and Congress is becoming more diverse than ever. All of this progress begs the question: are diversity and inclusion programs still relevant?
Looking further into the numbers, the answer would be a resounding yes.
In the US, white men comprise just 31 percent of the population. However, among a representative sample of Fortune 500 companies, white men constitute a disproportionate 72 percent of executives and senior leadership. Meanwhile, US Census figures demonstrate a trend of increasing growth among diverse racial and ethnic populations. Simply put, the US is becoming more and more diverse, year after year.
Meanwhile, numerous studies have proven that companies with greater diversity in leadership roles are more likely to succeed and yield greater profit margins. The McKinsey & Company organization has set the gold standard when it comes to business diversity research. Their studies have established that companies with gender diversity on their executive teams were 15 percent more likely to experience above-average profitability. Similarly, companies with greater ethnic and cultural diversity reported a 33 percent likelihood of outperformance on EBIT margin.
It’s because of these success stories and performance data that C-level executives across the nation have made a commitment to diversity and inclusion. Procter & Gamble, the American multinational consumer goods conglomerate, has made a strategic and multidisciplinary commitment to gender equity, and it’s led to results. An internal employee survey demonstrated an 89 percent favorable score for overall gender equality at the company. Similar success stories have been reported by companies like Starbucks and Salesforce.
It’s About the Customer
[click_to_tweet tweet=”If you look around the room and everyone looks like you, thinks like you, acts like you, or has a similar background as you, then you should have a problem with that” quote=”If you look around the room and everyone looks like you, thinks like you, acts like you, or has a similar background as you, then you should have a problem with that”]
Early in my career, I worked as a research analyst at Univision, the Spanish language television network in San Francisco. Part of my job was to analyze population trends and consumer habits among both Latino and general market (English language) audiences. I would then cross reference that with media consumption data of the two groups. Essentially, we were trying to figure out who was shopping where and why. I would then pass these reports on to our advertising sales team who in turn would use this data to sell ad space to local and national advertisers.
Although Univision was a Spanish language media outlet, many of the advertising sales and creative services staff were recruited from competitive English language media. Whether we were hawking hamburgers or Hummers, all video production and content was held to the same, or in some cases, higher standards as any English language media outlet.
When the Univision advertising sales team (aka ‘account executives’) would meet with potential advertisers, the AEs would often encounter the same issue. Local business owners, particularly small businesses, didn’t have any Spanish speakers on staff to interact with Spanish speaking customers. Despite the fact that Hispanic population penetration was surging past 35 percent within numerous census tracts in the San Francisco Bay Area, these businesses couldn’t be bothered to speak the language of their own potential customer base. Whether by willful ignorance or unconscious bias, these businesses were alienating potential customers.
U.S. Census shows that the U.S. is becoming more diverse every year — from a demographics perspective. Bearing that in mind, how can companies do a better job of understanding and fulfilling the needs of an increasingly diverse customer base?
Charlotte Flanagan, Diversity & Inclusion Director at Docusign, states: “If you look around the room and everyone looks like you, thinks like you, acts like you, or has a similar background as you, then you should have a problem with that.”
Of course, diversity is about more than just race and ethnicity. It can include gender expression, sexual orientation, religion, physical and mental ability, and body size.
What Does It Mean to Embrace Diversity and inclusion In Your Organization?
“Having a woman or person of color on the board or executive team is a start, but not a cause for celebration. Diversity is but ONE aspect of the equation.”
But what about those who may feel threatened or believe that diversity and inclusion programs are unfair? According to Flanagan, individuals that harbor this mindset need to ask themselves why they think that way in the first place.
“Creating a more even playing field does not change the size of the field. It’s not a zero sum game,” says Flanagan. “If anything I view it as creating more opportunities for everyone – more growth, new markets and a better workplace. When something has been a certain way for so long and it’s disrupted – be that bias, male dominated culture, etc. – it’s easy to see why some may see it as unfair. But I also think those that have that viewpoint aren’t curious enough to learn more about the problems.”
Hiring staff from underrepresented populations is not just about ticking boxes. To increase transparency, Flanagan suggests leveraging data and not celebrating “super small wins” such as one or two hires: “Having a woman or person of color on the board or executive team is a start, but not a cause for celebration. Diversity is but ONE aspect of the equation.” Inclusion is another important aspect.
Inclusion refers to a cultural and environmental feeling of belonging. It can be assessed as the extent to which employees are valued, respected, accepted and encouraged to fully participate in the organization.
After you bring a diverse hire on board, how are you going to set them up for success so they feel valued, appreciated and heard? When someone is the only person of their kind (“token minority”) in a group, they are less likely to feel that they truly belong.
Belonging is one of the components of Starbucks’ Diversity and Inclusion strategy. Their efforts have not gone unnoticed. Starbucks has been recognized by a number of prominent diversity organizations for their work across a broad strata of categories. Starbucks was selected as Disability Employer of the Year by the US Business Leadership Network, and received a perfect 100 score on Disability Equality Index two years in a row. They also achieved the top rating of 100 percent on The Human Rights Campaign (HRC) 2015 Corporate Equality Index.
What it Takes to Create a Successful Diversity and Inclusion Program
Improving diversity and inclusion at your organization can feel like a huge undertaking. However, there are some steps you can take to increase your chances of success.
- Assess your current situation.
Take a look within your organization. Establish where you are now, and think about which areas need the most focus. Some examples could include looking at your sourcing practices and your talent acquisition pipeline. Are your interview questions putting candidates on a level playing field? Are your people managers assessing performance accurately? Are you promoting men versus women in your organization at the same rate? Are you paying fairly based on race?
- Invite marginalized groups to be part of the conversation.
Employee Resource Groups (ERGs) can be a great resource. Michaela Ayers, Diversity Advocate and Business Strategist & Social Justice Facilitator, adds “ERGs are a powerful force and can be a driver in identifying where organizations are missing the mark.”
- Include roles outside of HR in the process.
HR business partners, recruiters, analytics teams and others can be change agents as much as HR can.
- Define your measure of success.
Think about what’s important to your organization. Is it hiring and retention rates for specific segments of employees? Promotions? What is the actual number or percentage of the number of women and people of color on your executive and leadership teams? How about promotion velocity?
Dive into your turnover metrics to discover areas for improvement. Who is leaving and why? You can also use surveys tools like Officevibe to check in on the pulse of an organization and discover other potential pain points.
- Secure executive support.
Top level executives are usually the least diverse part of an organization, yet it is essential to have C-level commitment in order for Diversity and Equity programs to succeed.
Michaela Ayers suggests that one way that executives can demonstrate commitment is by tying incentives to diversity and inclusion successes. They can also foster top-down support by sharing why they want to create a culture of inclusion.
To cultivate executive support, share with them statistics on the business benefits of cultivating a diverse workplace as well as the specific areas you’ve identified where the organization can improve.
Continuing the Momentum
It’s important to remember that diversity and inclusion efforts are an ongoing process. You’re not going to solve all the problems in one go. It might be awkward or difficult at first. However, like anything, it takes practice. Over time, you could change the culture of an entire organization.
Salesforce CEO Marc Benioff made headlines when he affirmed the company’s commitment to gender equity to the tune of $6 million (to adjust employees’ pay after gender/ethnicity based pay disparity was discovered). Yet, even after investing that hefty sum, Benioff mused “There’s no finish line when it comes to equality.” Creating a successful and meaningful is not a simple checklist. It’s an ongoing process.
Ultimately, however, it comes down to the people. Everyone deserves the same opportunity to thrive in their work environment. Furthermore, diverse and inclusive teams will no doubt always come up with better solutions to problems, more successful ideas, better products and ultimately more satisfied customers.