Establishing diversity and inclusion at workplace is hard work but pays off dividends in the long run. Some people have the misconception that diversity and inclusion is a charitable endeavour. When you have people like these in senior positions, they might feel obliged to partake in diversity and initiative efforts due to pressure from social activists or concerns about being relevant. However, diversity-for-the-sake-of-diversity is a wrong mindset to adopt this practice as a core part of your business practice.
In the business world, diversity is the idea that the workforce should more accurately represent the members of the broader society. This means that if a population is comprised of 50% women and 15% ethnic minorities, a company should ,in theory, have an employee makeup that is quite similar. This argument is particularly made by proponents of diversity, who advocate for quotas. The fine line here is that companies need to actively encourage that underrepresented groups actively apply for positions while ensuring that such hiring and promotions are based on merit, as opposed to the merely to fill a quota.
Some aspects of diversity may include:
Inclusion is the idea that the workplace allows individuals from diverse backgrounds to participate and have a seat at the table. For instance, this could include ensuring that the opinion of people from minority groups are actively sought out while redesigning corporate culture or company values. Or it might include regulations about what type of humour is workplace appropriate and to have a policy against racist, sexist or misogynistic remarks. It is possible that an organisation can be diverse but not inclusive, and vice versa. Both of these concepts are important, but to paraphrase the famous diversity trainer Keynona Matthews, ‘’ diversity gives people a space in the room but inclusion ensures people have a seat and a voice.’’
The concept of diversity and inclusion is related closely to the concept of meritocracy. The Merriam Webster Dictionary defines meritocracy as “a system in which the talented are chosen and moved ahead on the basis of their achievement.”As you may have guessed, a true meritocracy does not exist because we all have implicit biases.
Consider the study by Katherine DeCelles which found that African Americans who ‘whitened’ their names received 15% more call backs compared to the control group. Another report on gender stereotypes by the Harvard Business Review in 2018 found that during subjective evaluations, women were perceived as ‘bossy’ whereas men were seen as ‘assertive’.
These biases negatively impact the experience and performance of minorities at work which leads to adverse effects such as less social mobility, workplace happiness and confidence. This leads to the logical question of how diversity and inclusion efforts benefit businesses in overhauling workplace culture. Below are some salient benefits:
Studies show that innovation flourishes when there is a diversity of thought. Innovation requires that a problem or concept is seen from a different perspective so that conventional thinking can be overcome, leading to breakthroughs. A common misconception about diversity initiatives is that attracting people based on their skin colour, gender or other minority status doesn’t help with diversity of thought. However, different groups go through different life experiences which naturally results in different ways of thinking.
Non-diverse groups may face the problem of confirmation bias as they all may think similarly. With no external perspectives to consider or different personality types to challenge them, the result may be a stagnation of ideas. Often times, teams will end up having to bring on external consultants or crowdsource to get new ideas. This can partly be solved by recognizing your biases and taking action steps towards a team that is equally diverse and inclusive. As cognitively diverse teams solve problems faster, socio-economic class and educational backgrounds become equally important when creating a team with different perspectives.
We live in a globalised economy where businesses work across borders. Consider these factors:
All of these factors are creating a world where we increasingly need to work with people who are different from ourselves. The need to appreciate and understand diversity is essential, particularly when it comes to leading diverse teams. Wattpad, for instance, was able to expand internationally through a diverse workforce which helped give them a global perspective.
The ability to deal with and lead people from other cultures is now an essential skill for entrepreneurs who have ambitions that go beyond their borders. Even within your country, it is likely that the talent pool you have access to consists of people from different nationalities. Studies show that Silicon Valley tech workers are mostly foreign born, with estimates being around 57%. These groups and individuals all come with their own set of ideas when it comes to work, culture and relationships. Managing diverse groups would require one to account for these differences.
Women make up around half the population in most societies. In multicultural countries such as the US and UK, self identified ethnic minorities comprise 40% and 14% of the respective populations.These groups constitute a significant amount of human capital that can transform businesses for the better. There is currently a talent shortage across a number of roles, particularly in technology, which could be filled with outreach processes and hiring practices that are more inclusive.
In addition, having more women in management and senior leadership positions helps with the financial success of a company, particularly for startups. A study by the Boston Consulting Group found that although women co-founders secured less in investments, they generated more in revenue for every dollar of funding. A gender-focused analysis of five years of investment and revenue data showed that on an average, startups founded or cofounded by men earned $2.12 million dollars compared to their female counterparts which earned $935,000. The story was different when it came to cumulative revenue. Male-led startups earned $662,000 compared to female-led ones which generated a cumulative revenue of $730,000.
Creating apprenticeships targeted towards women, disabled people or ethnic minorities may help to address such structural inequities. This would aid you in the process of hiring talent that is not only very capable but also will be faithful to your company’s vision and values. Moreover, such practices would also give your organisation a pioneering status in creating leaders of tomorrow who channel the diversity of thought and life experiences to create value-based services or products.
From a moral perspective, diversity and inclusion may also fall under corporate social responsibility. So it may be argued that such efforts improve your relationships with internal and external stakeholders but also while seeking government contracts. In the media space for instance, the Oscars were boycotted in 2016 by various actors who cited a lack of diversity as the cause. Some government representatives around the world are also calling for certain diversity targets to be met before contracts and tenders are handed out. Many companies have pledged to do so but here again, the problem lies in a somewhat obsessive fixation on numbers rather than improving company culture.
With customers becoming more educated, conscious and driven by social justice,there is also a push from the public to see more representation of diverse ethnic groups in the companies that they buy from. Public outcry in the form of boycott is a common measure used against companies that exhibit hostility towards minority groups. An example of this was the Chick-fil-A same-sex marriage controversy, in which the CEO Dan Cathy made public comments opposing the right for LGBT couples to be married. This resulted in some business partners severing ties with the food chain.
Whether you want to strengthen your relationship with current customers or case reach out to a broader demographic, a commitment and advocacy for diversity and inclusion initiatives is usually met with a positive response. Sometimes known as in-culture or diversity marketing, the idea is to have people in your team who actually reflect your customer or target market. This can help in a few ways:
The point here is not to say that a man cannot completely understand what a women demographic would be interested in or vice versa. Similarly a caucasian person cannot empathise with certain values of black or Asian culture or a perfectly able person being able to comprehend the needs or insecurities of a disabled person. People have different life experiences which can’t always be accurately empathised with through conversations or market research. Sometimes, you need somebody who has lived the experience to really get the nuances and intricacies of the needs and wants of certain groups.
A corporate culture where people do not have to think twice before speaking their mind provides a safe environment for exchanging ideas. By creating such a culture that is conscious and inclusive, you get the following benefits:
Founders, CEOs and business leaders need to think critically about these factors before crafting their own diversity and inclusion initiatives. Whether you are part of a corporation or run your own small or medium business, it is time to be vocal about these issues and realise that the debate around diversity is not simply an HR matter or something reserved for social activists. It is our moral and corporate responsibility to improve the well-being of our employees. This way we may hope to take incremental steps towards sustainable leadership and a long-lasting organisational change.
Stefan Beiten is a lawyer, international entrepreneur and investor from Berlin. With more than 20 years of experience, Stefan is an expert in building, scaling and managing successful businesses.