May 22, 2017 – Diverse organizations outperform their peers, and in the process embed inclusion strategies into almost all their management decisions, according to new research by advisory firm Bersin by Deloitte. That may be a key reason why 78 percent of those responding to the firm’s latest survey believe diversity and inclusion is a competitive advantage. Even so, only 12 percent of respondents say they have achieved an inclusive culture.
“Diversity and inclusion has been a compliance function driven by human resources for too long,” said Josh Bersin, principal and founder. “Our new diversity and inclusion maturity model shows that the most effective way to achieve significant gains is through leadership ownership, strategic measurement, and a culture of accountability for inclusion that is driven from top to bottom.”
Deloitte’s study, which is based on a survey of 245 global organizations and more than 70 client interviews, identified keys to driving a highly diverse and inclusive corporate culture. The report builds upon past research by the Oakland, CA-based firm, which found the majority of companies it surveyed saying they aspired for an inclusive environment in the future but with only a few achieving it.
Looking beyond programs and training, the new report focuses on establishing broad diversity & inclusion ownership, setting expectations of inclusive leadership behaviors, driving transparency and accountability, embedding diversity & inclusion into talent practices, and enabling individuals to take action on opportunities to enhance inclusion efforts.
Strength Through Diversity & Inclusion
This podcast episode features Willie Carrington, the founder of Carrington & Carrington. Willie is the recruiter behind the placement of McDonald’s global chief diversity officer. Willie tells us why he turned to Major League Baseball to find his lead candidate, he discusses the challenges of replacing a leader who’s been in place for 40 years, and he gives an inside look at the unusual succession plan currently underway in McDonald’s diversity C-suite.
Six Keys to Creating a More Inclusive Culture
The Bersin research showed that in organizations that practice inclusion, people tend to feel that they can be themselves, share problems, make mistakes, innovate and drive change. In addition, the study provided a roadmap for organizations that want to create such cultures.
Deloitte’s research revealed that organizations with inclusive environments, when compared with organizations that lack them, tend to be: six times more likely to be innovative, six times more likely to anticipate change and respond effectively, and twice as likely to meet or exceed financial targets.
The firm identified six principles that are integral to creating a more inclusive organization:
1) Treat the evolution of diversity and inclusion as business-critical, not compliance-necessary. Organizations that approach diversity and inclusion as a business priority are more likely to report superior business outcomes, the report said.
2) Move beyond diversity to inclusion and diversity. Organizations that focus on the value of inclusion, in addition to diversity, typically perform better than peer organizations that do not.
3) Prioritize inclusive leadership. Leaders who demonstrate behaviors such as courage, curiosity, and cultural intelligence tend to enable cultures that encourage inclusiveness.
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4) Reinforce an inclusive culture by integrating both demographic diversity and diversity of thought into all talent management practices. It is especially important to do this at moments that affect the talent pipeline, such as when making decisions that impact talent acquisition, promotions, succession management and leadership development.
5) Provide diversity and inclusion resources that empower individuals to take action. Inclusive organizations are more likely to offer resources that enable individuals to bring their authentic selves to work, manage unconscious bias effectively and leverage the support of mentors and sponsors to help them navigate their organizations. Further, more mature organizations offer these resources broadly — not just for diverse populations.
6) Drive accountability, not metrics tracking. Organizations should create accountability by sharing strategic measurements about diversity and inclusion-related activities and their impact, and have senior leaders discuss achievement on an ongoing basis. One aspect of this might be to tie compensation to diversity and inclusion outcomes, a practice currently employed by only 6 percent of companies surveyed.
Companies Lagging Diversity & Inclusion Efforts
Deloitte’s research found that the most mature organizations, those at ‘Level 4’ of its maturity model (see below), have effectively employed these six principles to build a culture of inclusion in which all employees are responsible for diversity and inclusion, and leaders are held accountable for embedding diversity and inclusion throughout the organization.
How Can You Move up to Level 4?
The challenge for organizations trying to move to Level 4 is to embed diversity and inclusion as a business value. While leaders may understand the importance of diversity and inclusion, they may still talk about it as being separate from the organization’s business strategy. Further, line employees lower in the organization may be unaware of the importance of diversity and inclusion to the organization’s business success.
To begin to make this transition, Deloitte said, it is important for organizations to consistently stress diversity and inclusion’s impact, making use of formal communications and reporting relationships. In addition, groups can build in an awareness of bias into critical talent activities, so all employees are reminded of the importance of managing bias. Most importantly, leaders should be held accountable for improvement on diversity and inclusion metrics (which can and likely should go beyond just representation), similarly to how they are held accountable for other business metrics.
Path to Profitability: The Business Case for Board Diversity
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To begin to achieve maturity, organizations should discuss diversity and inclusion as a critical component of the organization’s business strategy through both formal communications and reporting relationships, according to the study.
“Our research demonstrates that inclusive talent practices drive measurable and predictable business outcomes,” said Stacia Sherman Garr, vice president, talent and workforce research leader at Bersin by Deloitte. “After two years of study, we conclude that these business outcomes are possible for all companies – but only with a change in focus. The research shows that CEOs and business leaders should own the strategy, and the entire organization should embed and use inclusive talent practices.”
Organizations can also build an awareness of bias into critical talent activities, to remind all employees of the importance of managing bias at moments that will have long term impacts on the talent pipeline, Ms. Garr said. “Critically, leaders should be held accountable for improving diversity and inclusion outcomes just as they are accountable for other business metrics.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media