Building Better Businesses Through Diversity and Inclusion
By Brittany Brander
Business is more than products or profits. It has a role as a corporate citizen, a role to better the communities it operates within, to ensure that the people and environment it impacts are better than before—to be a part of creating shared prosperity. When we talk about shared prosperity, we talk about the opportunity, security, and belonging that every person has access to in order to achieve their full potential. And part of that is ensuring that there is access and opportunity for every person—no matter their race, orientation, gender identity—to be a part of an organization that not only values diversity but takes meaningful action to break down barriers and systems and build strong, innovative, and profitable businesses through diversity and inclusion.
But while this sounds very good, the reality is that inequality exists. From gender inequality to racism, it exists within our society, and because the door between our businesses and society is porous, inequality can be a problem within business, too.
Diversity and inclusion = innovation, competitiveness, and good returns
Solving not only the inequality problem but the inequity problem, too is not just a social issue; it’s an economic one. It’s no secret that the business case for diversity and inclusion is well known and strong. We know that diversity makes our businesses more innovative, competitive, and profitable.
A well-cited study by the Boston Consulting Group found that companies that have more diverse teams have on average a 19% increase in revenue because of the innovation potential. McKinsey & Company supports this in their research on diversity, finding that companies in the top quartile for gender diversity are 21% more likely report higher financial returns compared to their peers, and this figure increases to 33% with racial diversity. The reverse is also true: companies within the bottom quartile perform worse than their peers on both these indicators.
In fact, when you take any indicator—women-founded enterprises, gender and racial diversity on leadership teams and boards, income and social mobility, wage gaps, the list could go on—you’ll find that diversity and inclusion is often linked to better decision-making, robust innovation, increased productivity, higher employee retention and satisfaction, and higher revenues and profit margins.
The remaining gaps
And yet, even when armed with this business case, there remain gaps in moving from knowing that diversity and inclusion is the right thing to do to taking actionable steps to reduce inequality in our businesses. Let’s highlight a few.
First, one of the most fundamental gaps is addressing the mental block to acknowledging there is a problem of inequality—and inequity—in the first place. Social inequalities are very present in our society, and those have crept into business—as they have in every area of society—and they can show up in our hiring and promotion strategies, communications plans, product development processes, etc. However, often that acknowledgement can be perceived as though there is a problem with the business itself. This isn’t the case. Inequality is a collective problem and one that we all must own. And when we do, we can take conscious action towards addressing those areas where it shows up in our businesses, achieving not only equality but equity within our businesses but also society as a whole.
Second, diversity and inclusion can also often be perceived as a “soft” issue. Over time, our language has shifted from a hard focus on issues such as gender inequality or racism to softer, more euphemistic language around “belonging” or “inclusion”, which can lead to more subjective conversations that don’t really define the problem or offer clear opportunities for a solution. Additionally, because this is often perceived as “soft”, it isn’t seen as a core business strategy to drive value and simply one of the many items included in an employee manual, for instance.
Third, addressing inequality requires deep organizational change through a solid and raw understanding of where inequalities show up in business operations. However, it can often be found that there is some honest confusion about what steps are necessary to make change. For example, should leaders implement quotas? There is considerable debate around whether quotas are effective in advancing diversity within organizations. If quotas are up for debate, should leaders consider merit-based hiring? Even this tactic is complex and can be performative.
Additionally, standard strategies such as unconscious bias training have been shown not to help build equitable business practices as these focus too heavily on the individual responsibility rather than respond to what is truly a systemic problem. There are still many upstream barriers to systemic change, including the awareness, opportunity, or even access to employment, skills development, or other training opportunities to help underrepresented groups gain access to these opportunities.
Closing the gaps and building better business
The good news is that there are several solutions that leaders can try to begin to break down inequitable systems, close these gaps, and build new processes and systems that enable every person in their organization to achieve their potential. Here are five good ideas.
- It starts at the top. Equity is a good strategy, and successful diversity and inclusion strategies start at the top. As a leader, signal the importance of diversity not only in your organization but its value and importance to you personally and acknowledge that it is not only the right thing to do for your team, it is also one of the best strategies to increase business performance. Take a look at how some Alberta businesses in the airline, finance, or communications sectors, for example, are taking the lead on this to demonstrate both the corporate and personal value of diversity and inclusion.
- Be open, curious, and courageous. Approach diversity and inclusion from a place of curiosity and openness. Ask questions. Look at your processes, plans, and existing policies and get honest with yourself and your teams about where inequality shows up and who is disadvantaged or underrepresented. From this place, you can get tactical and practical about finding the opportunities to break down and address those barriers.
- Be deliberate in your hiring strategy. When developing hiring systems and onboarding processes, think very deliberately about who you’d like to attract, and how and where you advertise those job opportunities. For example, if you are looking to attract more women to your organization, consider the language you use in your job description that speaks to their values and priorities, think about where they might find a posting, consider where women might be on or offline, and make sure your opportunity is available to them.
- Think differently. This is a good time to push for innovation. COVID-19 has not only provided us with an opportunity to think differently and explore new opportunities in how we do business in the future but also to look at how we build equality into those products, services, policies, and practices.
- Do business with like-valued companies. When procuring goods and services from suppliers or other vendors, consider partnering with those companies that have made diversity and inclusion a priority within their operations and have taken actions to this effect. Additionally, it is important to provide key mechanisms to your employees to report any bad actors and be able to take action based on those reports.
It can be overwhelming to know what to do, which steps are the right ones, and how to know if you are making progress, especially in a world where missteps and mistakes are not often met with forgiveness. For leaders looking for a place to start, reach out to the experts for advice and guidance, study and apply best practices, assemble advisors and diverse colleagues for ideas and feedback on proposed initiatives or responses, test and iterate. Above all, be authentic and curious in your intention and courageous and productive in your action. When in doubt, let the principle of right over fast be your guide. Your teams—and your bottom line—will be better for it.
This story is adapted from the August 25, 2020 episode of the Business Council of Alberta podcast, hosted by Brittany Brander and Scott Crockatt.
Building Better Businesses
Building Better Businesses
If COVID Has Taught Us Anything, We Need Each Other
If COVID Has Taught Us Anything, We Need Each Other