The business case for diversity and inclusion
The real value of diversity and inclusion goes beyond appearing ‘cool’. It has inherent dollar value ROI, and it is time businesses learnt to communicate it better.
The airwaves of technology and business journalism are full of news, views, and reactions from the recent and the rather incredible ‘Anti-Diversity Memo’ from Google. I say incredible because in my own little bubble, I thought it was impossible that someone would put their biases into an institutionalised document and circulate it at their workplace! I am not all about sticking with polite conversation at the workplace, but this is far-fetched and a little foolish even for me! I scrolled down the bottomless pit of despair that Twitter can be every time there are headlines as naturally sensational as the ones that this memo made – it was a terrible idea. Even the gendered, biased, and orthodox opinions in the memo managed to find supporters. It is hard for anyone rational to take them seriously but a word has to be said about making the business case for inclusion and diversity so everyone just understands it better.
Large organisations have made diversity and inclusion a key talking point in their corporate communication and employer branding initiatives. The ground realities might still be far from ideal but incremental efforts and results have been in place for years now. Large organisations are leading the charge and it is a positive sign.
Then again, whether it is the stand up comedy circles or startups both Indian and American, repetitive complaints of the pervasive ‘dude-bro culture’ have been deafening. If we are all making so much effort in ensuring that minority races, religions, and genders become the new normal in our workplaces, why is it still the ‘next big thing’ for most organisations? How do memos like the one from Google even find place in popular discourse?
Perhaps a business case and dollar and cent ROI is what it would take for many of us to see why a solid diversity and inclusion strategy it is not institutionalised charity by a long shot. Sometimes, all it takes is cold, hard data to prove a point. According to a Forbes Insight study, 56 percent of organisations strongly agreed that diversity helps drive innovation. The study also finds that a diverse and inclusive workforce can also help ensure that a company’s products and services are respectful of their clients’ cultures and are able to attract global talent. And according to McKinsey, organisations with a diverse board see up to 53 percent higher return on equity and significantly higher earnings.
With statistics like these, surely there must be something more than ‘feel good’ and ‘cool’ about diversity and inclusion effort? The narrative shows that its positive impact can be distilled into two distinct areas:
Your diverse workforce understands your diverse consumer
Most creative, high impact ideas are rooted in personal experience. For any consumer facing company, it is essential to understand the biases, reservations, aspirations, and ambitions of its consumer. Consumer insight is one way to do it, but the personal experiences of your workforce can deliver the personalised experiences you want your consumers to have. And today, your consumer base is the most diverse that it has ever been in the past. A quick scan of TV channels are proof that as opposed to the ‘90s cable TV explosion that catered singularly to the urban elite, today, media caters to tier-two and three cities, to religions and communities that were once disconnected from mainstream popular culture.
Organisations that capitalise on its diverse voices and include these voices in decision-making are the ones that will truly thrive in our new inclusive societies.
Tangible benefits beyond marketing to consumers – IQ, EQ, and employer brand reputation
Cross-cultural intelligence drives better decision-making and emotional quotient driven client servicing. But the intellectual capital of a diverse, homogenous workforce is also known to propel creativity, innovation, and initiative. It encourages authentic engagement with your clients, consumers, vendors, partners, and potential workforce.
It also enhances your organisations’ reputation, making it more attractive to the hyper clued in, empathetic millennial generation. According to a Deloitte study whose results were published in Fast Company, “Millennials view diversity as the blending of different backgrounds, experiences, and perspectives within a team, which is known as cognitive diversity. Millennials view cognitive diversity as a necessary element for innovation, and are 71% more likely to focus on teamwork.” The study also found that a whopping 83 percent of millennials are actively engaged when they believe their organisation fosters an inclusive culture.
So there is ROI after all!
Clearly, effective diversity and inclusion measures and measurement processes prove that it is good for bottom lines. I do think that the narrative needs to change a little. When the C-suite and HR team relates its diversity and inclusion policies to its workforce, it must communicate the business benefits too, instead of just a charitable, feel-good cause. That is perhaps the only way to make workplace diversity and inclusion a business imperative, a new normal and not something that can be debated in memos that sound like they were written in the 1920s.