Diversity strategy. Why it’s not enough.
- 27th March 2017
- by Innes Miller
Diversity and inclusiveness (D&I) in the workplace is an ever-growing CEO issue. Greater numbers of companies have embraced it, but what needs to evolve to drive success?
Diversity and inclusion takes different forms and some organisations have made it a priority. By doing so, they have successfully changed their culture and human capital profile, benefiting the organisation more widely in the process.
According to McKinsey, companies in the top quartile for gender or racial and ethnic diversity are 35 percent more likely to have financial returns above their national industry medians. In the United Kingdom, McKinsey found that for every 10 percent increase in gender diversity, EBIT rose by 3.5 percent.
The message to organisations is to embrace diversity to remain competitive. To embed D&I takes more than a few soundbites or words in the annual report. Strategy on its own is not enough, it requires an approach designed to positively impact all levels in the organisation. Senior management have responsibility for setting the overall direction and strategy. To ensure its embraced, they may also choose to involve employees from across the organisation to develop initiatives that are tailored to the needs and profile of individual business units or functions.
Initiatives must be authentic with all employees playing a role and understanding the benefits. An ongoing communication programme and performance indicators should be
applied to help employees understand the positive implications. Management can develop a more inclusive workforce by creating diverse management and leadership teams. By doing so, individuals in these positions will have more of a chance of making an impact. But, to ensure the organisations approach to D&I achieves the support it requires, individuals must be selected based on their performance and personal attributes.
By creating diverse teams, organisations can think and act differently. Creativity and innovation can be achieved by bringing together individuals from different backgrounds with different perspectives and life experiences. Individuals must be encouraged to be themselves and from there they should be empowered to share their ideas. Being in environment where they can discuss not only their similarities but also their differences, creates honesty and openness. This in turn drives better business performance.
Most importantly, strategy must be accompanied by business change and sustained effort. Strategy on its own is not enough. It should start by understanding the diversity profile today, defining where the organisation would like to be and progress by developing initiatives that are born at the top, but that very quickly have a widely recognised positive impact across the organisation.