DISMISS DIVERSITY AND INCLUSION INITIATIVES AT YOUR OWN PERIL

At the HFS International Women’s Day Diversity and Inclusion Roundtable, a resounding point was continuously made: the current generation of senior managers and executives have long seen diversity and inclusion (D&I) initiatives as a political choice rather than a strategic necessity. The result is that too many enterprises are only paying lip service to promote diversity and inclusiveness in the workplace. If you don’t make a concerted effort to bring people with a wider range of genders, sexual orientations, abilities, and ethnicities into your workforce and then make the newcomers feel welcome and valued, they will eventually damage their company’s reputation and bottom line by losing talent and customers.

This PoV explores the broader socioeconomic changes turning D&I into a necessity for enterprise managers and executives, what you stand to gain from genuine D&I drives, common mistakes enterprises make on the D&I front and how to mitigate them, and what’s at stake if you continue to only pay lip service to promote previously marginalized groups in the workplace.

The new world order is here—and many business decision makers seem to be asleep at the wheel

No enterprise operates in a social vacuum. The world is experiencing tectonic shifts in relationships, attitudes, and standards. Enterprises must be aware of these shifts, stay ahead of them, and adapt. The shifts include:

• Technology. Social media and multi-channel communications are bringing people closer, which ensures constant communication and sharing, which means that little can be buried for long. Heightened visibility makes enterprises more accountable to the public and the law.
• Social movements. Immense social change is being wrought—not without conflict—by popular movements like #MeToo, heightening people’s awareness of inappropriate behaviors and attitudes toward their colleagues and holding employers to a higher moral standard.
• Demographic change. Younger generations have different values than those of their managers and executives. These are the employees and consumers of the future, and they will set the moral standards enterprises must meet to attract and retain them.
• Legislative change. Gender, racial, and sexual discrimination is increasingly legislated against across geographies, incurring heavy fines for transgressors. Mandatory reporting, such as the Gender Pay Gap in the UK, will heighten scrutiny against larger companies.

D&I isn’t just the right thing to do—it’s also eminently sound business sense

Moral arguments for getting more women or people with disabilities into the workforce won’t sway many enterprises—unless they are run by individuals from marginalized groups. For those enterprises still not convinced, there are persuasive economic arguments to consider instead.

• Multiple studies show that companies with higher diversity indices also have higher revenues. Recent studies have demonstrated that companies with higher-than-average diversity indices had higher innovation revenues than their more homogeneous peers. Getting more perspectives into the room catalyzes innovation and creativity, so promoting such change should be a no-brainer economically.

• In a digital economy, the best ideas will win. In a hyperconnected economy with infinite consumer choices, buyers will go for the most attractive variant. As such, marginalizing those with unusual ideas will only harm your enterprise.

• Your consumers are growing more diverse; the people serving them should, too. HFS’s Digital OneOffice and Hyperconnected Enterprise models state that enterprises that don’t become consumer-centric will lose out in a digital economy. By extension, if you’re trying to become consumer-centric, you won’t be able to do so without the diversity of your workforce mirroring that of your consumers unless you only serve one demographic.

Enterprises aren’t pulling their weight on the D&I front

The examples of companies saying one thing in public in the fight to seem socially relevant but undermining themselves in practice are rife. This duplicity isn’t always conscious malice, and more often than not it is simply a generational ditch that’s hard to climb out of. Many managers and executives likely aren’t even aware of how they’re damaging their businesses with their casual prejudices. Some damaging actions and attitudes include:

• Not implementing change from the top-down. If you are a leader that thinks it’s acceptable to crack jokes about women, ethnic minorities, people with disabilities, or the LGBTQ+ community, you disseminate the idea that it’s fine to do so. If there’s a training or awareness meeting, clear room in your calendar to ensure attendance. Otherwise, you risk creating an environment in which some employees will feel unhappy or threatened and eventually leave, with potentially awkward publicity consequences.
• Thinking that your D&I responsibilities end at recruitment. They don’t. Hiring people in order to meet D&I targets is easy enough and is often a box-ticking exercise. It’s what you do afterward that counts—do you put them into leadership positions with decision-making power or (at least) make them feel comfortable? Gender and other quotas can help rectify past injustices, but the efforts only begin there.
• Not setting internal D&I targets for your company. It’s said that “what gets measured gets done.” Companies, especially smaller ones not subject to gender pay gap and other such reporting, must set and pursue internal diversity goals. They should also be honest enough to publish their goals and their progress toward them. Such self-regulation isn’t ideal, but it’s a start.

D&I should be common sense, but it isn’t, so here are our tips for what you can do differently

We understand that it’s hard to stop being a relic of the past. For those interested in creating a genuinely better future for their employees and their business, here are some tips on driving real diversity and inclusion.

• Engage more directly with your employees to uncover issues. Let go of hierarchy and speak to even the least senior employees to understand their day-to-day problems. Don’t dismiss attitude issues—reprimand perpetrators and make an example of what happens to the intolerant. Help the ignorant learn how to be better. Most importantly, allow your employees to be more vocal about what could be better in your organization and fight to eradicate the office politics that keep them quiet.
• Don’t push young employees to “unlearn” the qualities that differentiate them from older managers. Young recruits are being managed by (usually older), non-inclusive individuals, a worrying trend for the pace of change in organizations. Young recruits are often managed by older individuals who have operated under older practices for so long that their natural tendency is to expect newer employees to assimilate into the existing culture instead of thinking about how to create a new one that incorporates a new generation of employees with different skills and talents. Managers must make a conscious push to foster such new ideas.
• Don’t be afraid of affirmative action. Not just in the commonly known racial sense, but for any historically marginalized group. Don’t be afraid to introduce some bias in your recruitment and promotion strategies to put people with different genders, orientations, ethnicities, and abilities into positions of power. There’s a lot of damage to be undone from unconscious bias, and conscious bias (within the law) can help. According to the World Bank, six countries have equal rights for men and women, and the parity we imagine in the world’s richest countries is fiction.

The Bottom Line: Diversity and inclusion are of paramount importance to the people you want to hire and sell to—if you dismiss their values, they’ll dismiss you.

The logic is astoundingly simple. Enterprises only exist because of their employees and customers. Until recently, the alignment between enterprises’ and the public’s values have been generally close. Now, that alignment is largely gone. Things that the corporate world dismisses as utopian are of paramount importance to both future employees and consumers. If enterprises cannot—or are not willing to—refashion themselves in the new moral mold society demands, the consumer will win and buy from enterprises that do. It’s up to today’s managers and executives to decide what’s more important for them—holding onto a wrongly idealized past and undeserved privilege, or securing the continued existence of their business.