Beyond Goodwill, How Diversity & Inclusion Drives Business Success
Organizations with diverse workforces and inclusive environments will own the digital economy. By challenging conventions and creating a strong sense of belonging and empathy, decision makers can find innovative answers, enrich collaboration and heighten operational performance.
Amid the pervasive digitization of our personal and professional lives, it’s important to understand that the main engine of change in how we live, work and play depends not only on the technologies that power our very existence, but also the people who bring together diverse viewpoints and experiences to spark breakthrough thinking and action.
From a business standpoint, diversity incorporates a wide variety of perspectives that transcend generational thinking, gender definitions or ethnicity, and are uniquely personal. In fact, diversity can signify a range of skills and experiences, as well as different ways of thinking and problem-solving.
To better understand the future of work in the digital age, we researched the complex relationship between diversity and business performance, how inclusion affects outcomes, and how organizations can increase both diversity and inclusion by creating a culture of belonging.
Diversity Drives Innovation
Organizations with a diverse and inclusive work environment are better prepared to meet the complex demands of a dynamically changing digital economy. Not only that, but they’re also more profitable, innovative and effective when managed properly.
A 2013 study by the Center for Talent Innovation, in fact, concluded that serial innovation — the kind that drives and sustains growth — is highly correlated with two dimensions of diversity: inherent diversity (the traits that you were born with and have been conditioned by, such as gender, ethnicity and sexual orientation), and acquired diversity (the influence of your experiences and what you’ve learned from your behavior).
In short, cross-pollinating ideas from diverse people can act as a catalyst for innovation. Moreover, people who work in publicly traded companies that emphasize two-dimensional diversity are 75% more likely to have a marketable idea implemented; 70% more likely to see their organization capture a new market; and 45% more likely to see their organization improve market share, the same study found.
Not surprisingly, simply having a diverse workforce is not enough to feed innovation and heighten performance. Diversity is an important but passive view of workforce composition. Inclusion, on the other hand, is an active view that focuses on creating an empathetic workplace nourished by trust and encouragement.
Another more recent studyfound that a culture of inclusion fosters an atmosphere of trust; involves employees in decision-making and work processes; and provides the information, resources and tools they need to succeed — inspiring motivation, commitment, engagement and ultimately higher performance for everyone in the organization. Creating a sense of belonging and nurturing a culture of inclusion can also become a competitive advantage.
Consequently, companies recognize the importance of purposefully bringing together all the elements that impact people on the job. When we work alongside others with attributes similar to ours and we see them succeed, we start to feel a sense of belonging and less likely to leave the organization. It is this sense of belonging that every organization should strive for.
We’ve identified five steps that forward-thinking organization can take to not only include and benefit from more diverse employees but, more importantly, ways to effectively include them to help achieve the greater organization’s objectives.
Create an inclusive mindset.
Leaders who model inclusive behavior ensure that employees can freely express their views and opinions; feel secure in proposing novel ideas; are empowered to make decisions; are able to give and receive actionable feedback; and are given credit for their contributions. Of employees who say that at least three of these traits are present in their leader, 87% report feeling welcome and included, and comfortable expressing their views and opinions, according to one Harvard study, while 74% believe their ideas are heard and recognized. They feel like they belong, and are 42% less likely to leave the organization.
Develop key capabilities.
There is no question that work as we know it is undergoing a profound change in ways we do not yet fully understand. Although we rely more than ever on technology to get work done, winning requires talent that can thrive in an increasingly digitized world. This obliges organizations to continually develop, hone and capitalize on uniquely human capabilities, including collaboration, creativity, curiosity — and importantly — empathy. Empathy plays an important role in an inclusive culture; it shows people that they are both heard and valued. While 60% of CEOs believe their company is empathetic, only 24% of employees would agree, according to the Washington Post.
Create opportunities that facilitate collaboration.
Leaders must ensure that diverse individuals interact with one another across time and geography. Relationships facilitate the flow of information and ideas. The paths for connecting must make it easy for anyone to find the right people to help them contribute their talents, skills and experience to achieve strategic goals. We suggest making significant and thoughtful investments in programs, processes and technologies that facilitate collaboration, including events that provide opportunities to meet and interact and learn from each other, open workspaces that encourage employee interaction, technology that encourages collaboration and easy handoffs and feedback, and organizational structures that give people a voice.
Expand the knowledge base.
Organizations no longer own the expertise and technology they need to effectively innovate in today’s digital economy. Successful companies identify opportunities and execute against them by sharing knowledge and tapping into expertise in-house and beyond. By expanding their knowledge base to include broadly diverse networks, organizations sense opportunities, produce smarter results, adapt to new challenges and avoid missteps.
Embrace new rules for engagement.
Organizations with the most engaged employees effectively capitalize on the strengths, differences and unique values of each. Furthermore, employees with the highest level of engagement perform 20% better and are 87% less likely to leave the organization, according to a survey by Willis Towers Watson. And a study by the Hay Groupfound that engaged employees were as much as 43% more productive.
Simply put, the above actions can empower your organization to capitalize on the wide variety of employee ideas and perspectives necessary to compete in an increasingly global, heterogeneous and digital world. Learn more by clicking each step in the interactive graphic below.
While the journey to inclusiveness is different for every organization, it typically starts with the same question: What actions can we take to foster an empathetic and inclusive culture that welcomes and leverages unique backgrounds, talent, and perspectives to inform and drive business decisions? It also includes stated intent, awareness and “differences” resolution to drive long-term engagement.
By embracing different perspectives, winning companies can anticipate challenges before they become issues. Moreover, gender-diverse companies innovate more effectively and tend to post superior financial results when compared to their peers.