Diversity in Leadership Increases Chances of Success by 39%

New McKinsey research reconfirms past studies on the strong business case for diversity and inclusion. According to the latest “Diversity Matters Even More” report, there is a “39% increased likelihood of outperformance for those in the top quartile of ethnic and gender representation versus the bottom quartile.”

Conversely, the risk of not having diversity on your leadership team is immense. Those companies lacking diverse representation are likely to be 30% lower in their performance versus their industry peers.

HR Dive finds that companies that prioritize diversity and inclusion are:

• Twelve times more likely to engage and retain employees
• 8.4 times more likely to inspire a sense of belonging
• 8.5 times more likely to satisfy and retain customers

The business case for diversity has existed for decades. Global, progressive organizations have been working on diversity-and-inclusion efforts during this time, yet there still appears to be limited traction.

What’s Holding Organizations Back?

Mistrust, fear and lack of education continue to hold organizations back because most C-suites are composed of white males. There's often a lack of understanding of diversity and inclusion issues due to their own limited lived experiences. This is further backed by consumer mistrust, wherein 75% of U.S. consumers mistrust companies' DEI commitments.

Due to the lack of accountability, with 76% of companies having no diversity or inclusion goals, employees don’t see real value in diversity-and-inclusion programs. This is often not because of the programs themselves, but due to the lack of real accountability.

Stop Doing One-and-Done, Check-the-Box Diversity-and-Inclusion Training

A common pitfall that companies often stumble into is the "one and done" approach to diversity-and-inclusion training. This method involves a single training session or program that is intended to check the box and fulfill the organization's diversity-and-inclusion requirements. Unfortunately, this simplistic approach falls short of creating meaningful, lasting change within the workplace.

Implementing a single diversity-and-inclusion training session may give the illusion that an organization is making strides in fostering a more inclusive environment. However, the reality is that these one-time events often fail to address the complex and ongoing nature of diversity-and-inclusion work. Employees may feel that the organization is inauthentic, meeting a requirement without a genuine commitment to change.

One-off diversity-and-inclusion training sessions often focus on raising awareness of bias, promoting cultural sensitivity and discussing the importance of diversity. While these topics are crucial, the depth of understanding gained in a single training session is limited. Participants may leave with surface-level awareness but still lack the tools and knowledge to truly embed inclusive practices into their daily work. One-time diversity training, especially on charged topics like bias, can lead to negative outcomes.

To truly create a workplace culture that values diversity and fosters inclusion, organizations must shift towards a model of continuous learning. This involves implementing ongoing training programs, workshops and resources that engage employees at various levels and stages of their careers. Continuous learning allows for deeper exploration of topics, ongoing skill development and the cultivation of a genuinely inclusive mindset.

Start with Trust First

One of the key elements of fostering genuine diversity and inclusion is creating an environment where open dialogue is encouraged to help build trust. The greatest fear of diversity work is the fear of irrelevance, where the dominant group feels that they will be less important in the future if we promote and hire more diverse talent. It's important to dispel the myth that diversity is a zero-sum game by emphasizing the business case and the human case for diversity as a win-win.

Organizations can provide platforms for employees to share their experiences, ask questions and discuss diversity-related topics. This not only helps build empathy but also creates a sense of belonging among team members. Focus groups, listening sessions and inclusion assessments can help uncover and prioritize the unique challenges and opportunities at the organization.

Answer the Question “What Does Success Look Like for Diversity and Inclusion?”

Rather than treat diversity-and-inclusion training as a one-time event, think of diversity and inclusion as a strategy. Ask leadership these questions:

• How will we know we've been successful with diversity and inclusion?
• How will diversity and inclusion help us achieve our business goals?
• What's the risk of doing nothing for diversity and inclusion?

Diversity work is a long game. Centuries of inequality will not shift in days or even years. While many public companies are incentivized for short-term financial gains and instant gratification, it takes a pivot to a long-term focus with a plan, clear goals and objectives to measure success. If any other business strategy could improve your chances of success by 39%, wouldn't it be worth pursuing?

 

This article was written by Julie Kratz from Forbes and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.