IBM, Qantas, SpiceJet, Coca-Cola – all these companies are examples where diversity plays a significant part in their turnaround stories. Of course, it wasn’t diversity alone. IBM needed product innovation, Qantas needed operational efficiency and financial discipline, SpiceJet needed a drop in oil prices, and sparkling beverages helped out Coca-Cola. But there is no denying that ‘diversity & inclusion’ was a catalyst in the turnaround in fortunes of these companies; if not always the cornerstone on which their success was built.
Diversity, as a concept, cannot be studied one-dimensionally. It is not as simplistic as having equitable representation from people of different sex, age, race, demography, etc., and that yields innovation and an upturn in business. There is a certain complexity to diversity and inclusion; certain truths associated with the concept. To study these truths, Deloitte articulated the eight powerful truths about diversity and inclusion from their work with about 50 organizations and their 1 million employees. The study titled “The diversity and inclusion revolution: Eight powerful truths” was featured in the January 2018 Deloitte Review.
We explain the eight truths in this article:
Truth #1. Diversity of thinking is the new frontier
It has become important to think beyond the horizons of demographic diversity. Cognitive diversity (or diversity of thinking) is the new frontier. Research suggests that that cognitive diversity enhances innovation by about 20 percent and reduces risks by about 30 percent. Academically, this concept is known as deep-level diversity. It involves aspects of diversity which are psychological and are more intrinsic than surface-level. Differences in personality, attitudes, beliefs, values, and lifestyle bring a diversity of thinking.
The diversity of thinking has to go hand-in-hand with demographic diversity. A Deloitte research has proven that “high-performing teams are both cognitively and demographically diverse.” It is the role of HR to maintain demographic diversity and create mechanisms to measure actual deep-level diversity to have truly diverse teams.
The research points out, the three reasons why diversity of thinking is powerful are:
- It helps create a stronger and broader narrative about the case for diversity, one in which everyone feels a part of a shared goal
- It accurately reflects people’s intersectional complexity
- It recognizes that demographic diversity is useful as a visible indicator of progression towards diversity of thinking
Truth #2. Diversity without inclusion isn’t enough
Tangible diversity and inclusion goals should have measures of both diversity and inclusion
Diversity does not yield innovation without inclusion. When people feel psychologically safe in an environment, that organization is deemed to be inclusive. “At its highest point, inclusion is expressed as feeling confident and inspired,” the research points out. When people feel confident to express divergent opinions is when innovation happens. In the words of Vern Myers, “Diversity is being invited to the party. Inclusion is being asked to dance.”
To measure inclusivity of the organization, it is important to have a common definition and shared an understanding of the concept. Deloitte defines the concept through four related yet discrete items:
- Fairness and respect
- Value and belonging
- Safe and open
- Empowered and growing
Truth #3. Inclusive leaders cast a long shadow
Inclusive leaders lead to a 70% increase in experiences of fairness, respect, value, and belonging; psychological safety; and inspiration
A leader’s behavior can create a gap of 70 percent between people who feel highly included and the proportion of those who do not. According to research by Deloitte, inclusive leaders lead to a 70% increase in experiences of fairness, respect, value, and belonging; psychological safety; and inspiration. An increased feeling of individual inclusiveness leads to a 17% increase in perceived team performance, 20% increase in decision-making quality, and 29% increase in collaboration. Inclusive leaders cast a long shadow, and there are six signature traits which distinguish them from others. These are:
- Cognizance of bias
- Cultural intelligence
Truth #4. Middle managers matter
According to the Deloitte whitepaper, middle management is a historically un-serviced group in the context of diversity and inclusion. Executives have learnt from their experiences of working in different environments; middle managers, more often than not, are not given a chance to learn and understand. They are given directives to follow, and this leaves a lot left to be desired. Resultantly, change doesn’t quite happen. The middle manager cohort is extremely important for the change to happen successfully. There are six different personas that change agents have to engage with when facilitating change (Opposed, Unaware, Unaware: Anxious, Unaware: Fatigued, Supportive and Committed), and all these personas are dealt with differently.
Truth #5. Rewire the system to rewire behaviors
Diversity training has been gaining in popularity across organizations. According to Deloitte, one-half of mid-size US companies and nearly all the Fortune 500 mandate diversity training. However, not all of them are reporting positive outcomes. It is because training is merely a “scene-setter,” as Deloitte puts it when it comes to behavior change. To change people’s behavior, organizations need to adjust the system. Deloitte suggests four steps to make the adjustment:
- Use data to pinpoint leaks in the talent lifecycle
- Identify and remodel vulnerable moments along the talent lifecycle
- Introduce positive behavioral nudges
- Track the impact
Truth #6. Tangible goals make ambitions real
The intangibility of results is the reason diversity and inclusion missions aren’t always taken seriously. Make the objectives tangible, and ambitions become real. The impact of diversity and inclusion goals is tied to four conditions, according to the research:
- Communication: Communicate what the goals do and do not mean
- Coverage: Goals should have measures of both diversity and inclusion
- Accountability: The goals can only work if decision-makers are accountable
- Reinforcement: These goals are effective when tied to rewards and recognition
Truth #7. Match the inside and the outside
Replicate your efforts in workplace diversity and inclusion to customer diversity and inclusion as well. Company practices which promote equality lead to an upturn in business returns. According to research, one-half of customers were influenced to make a purchasing decision in the past 12 months because of an organization’s support for equality. Be equitable, and vocal about it. Customers value when you do good.
Truth #8. Perform a culture reset
“Most organizations will have to transform their cultures to become fully inclusive,” argues the whitepaper. Research reveals that inclusion maturity in companies is low despite their aspiration to have an inclusive culture in the future. That happens because organizations approach it in a piecemeal way, adopting a programmatic way to diversity and inclusion. Programmatic is the second level of diversity and inclusion maturity. The four levels go as –
Substantial cultural change happens at Level 3 when leaders vocally address the barriers to inclusion. Role modeling inclusive behaviors are the starting point of cultural transformations. Tick-the-box diversity programs won’t really result in real change.
Often enough, the direct, tangible contribution of an organization’s D&I efforts is difficult to ascertain. Even if it is really difficult at a microscopic level, it can be observed at a macro level. Diverse organizations have been found to be more innovative, faster at decision-making, and successful over others.