Beyond Diversity: Why Employers Must Create Inclusive Corporate Cultures

Beyond Diversity: Why Employers Must Create Inclusive Corporate Cultures was originally published on Vault.

“People fail to get along because they fear each other. They fear each other because they don’t know each other. They don’t know each other because they have not communicated with each other.”

As with so many of Dr. Martin Luther King Jr.'s quotes, this statement resonates with a multitude of scenarios we all encounter almost daily. Unity, understanding, and success depend on communication—on making decisions informed by diverse perspectives. Including a diverse range of people and points of view in important conversations is essential in virtually every context. Corporate America, particularly, is trying to embrace this idea more than ever, as evidenced by an increased push for diversity and inclusion.

Deloitte's 2017 Global Human Capital Trends report found that two-thirds of the 10,000 corporate leaders who participated in the survey indicated that diversity and inclusion are “important” or “very important” to business goals. But what exactly does “diversity and inclusion” mean? We hear those words frequently, but what impact do they have in practice? 

As we reflect on the work that has been done to promote equality and fairness in every aspect of society—and the work we still must do—let's explore what an inclusive workplace looks like and how employers can gain a deeper understanding of these crucial issues.

Diversity Versus Inclusion

We often use diversity and inclusion interchangeably, but they're not merely two sides of the same coin. When we hear the word “diversity” we typically think of diverse groups of people differentiated by such factors as:

  • Race
  • Ethnicity
  • Gender
  • Religious views
  • Sexual orientation
  • Ability
  • Age
  • Level of education

But an employer’s efforts to hire across these (and numerous other) groups does not inherently equal inclusion. In fact, a far more productive conversation might frame the notion of inclusion as the evolution of diversity.

A blog on the talent assessment platform McQuaig by Eve Davies-Greenwald summarizes the relationship between the two:

“Diversity often comes first and is about getting the right mix in the workplace. It recognizes the need for different voices and viewpoints to be present within the company. Inclusion is more about what you do with that diversity once you have it on your team…[it] is the extent to which all employees feel like they belong in the organization.”

Inclusion means more than hiring diverse employees. It means valuing their perspectives, experiences, and skills—recognizing the importance of their different backgrounds and transforming them into active participants in the business. It means including everybody on the team in important conversations, in shaping the company's culture, and in driving innovation.

Inclusion IS Innovation: Why D&I Matters

Diversity and inclusion matter because people matter. As a growing multitude of people demands actionable, lasting inclusion in every facet of society, employers are evolving to meet those demands for a workforce that is increasingly representative of a more diverse world.

The Deloitte article, “The diversity and inclusion revolution: Eight powerful truths”, by Juliet Bourke and Bernadette Dillon, seeks to help leaders achieve a truly diverse and inclusive culture within their organizations. One of those truths is that “diversity without inclusion isn't enough.” The research indicates that, for a corporate culture to be inclusive, all people must be treated with fairness and respect; they must feel valued and as if they belong; they must feel safe to speak up, and they must feel empowered to grow.

The research also finds that organizations with inclusive cultures are two times as likely to meet or exceed financial targets, six times more likely to be more innovative and agile, and eight times more likely to achieve better business outcomes.

Therefore, there is also a business incentive for employers to cultivate a diverse and inclusive culture. Research from Bersin by Deloitte (a business unit within Deloitte Consulting spearheaded by Josh Bersin, world-renowned human resources and talent management expert) also substantiates the business impact of diversity and inclusion. According to Bersin's findings:

“The companies…who we label ‘inclusive' and ‘managed' talent companies, are quite exceptional businesses.  Specifically, over the period we studied, these companies are:

  • 2.3 times higher cash flow per employee over a three-year period
  • The smaller companies had 13 times higher mean cash flow from operations
  • 1.8 times more likely to be change-ready and 1.7 times more likely to be innovation leaders in their market
  • 3.8 times more likely to be able to coach people for improved performance, 3.6 times more able to deal with personnel performance problems, and 2.9 times more likely to identify and build leaders.

In short, these…companies are not just ‘better at HR,'–they are higher performing companies measured by business, financial, and talent outcomes.”

Inclusion brings together myriad experiences, skillsets, and perspectives, and when applied to critical decisions, these diverse points of view encourage creativity, and therefore, innovation.

What Next? Diversity & Inclusion Today

As the conversation shifts from hiring diverse talent to including those employees in the culture—and therefore the growth—of the business, employers must reevaluate their initiatives. This requires honesty, courage, and a willingness to change outdated practices and systems.

Bersin’s strategies include a top-level focus from executive leadership, creating behavioral standards and diversity metrics, and implementing extensive training. In another article, he urges leaders to realize that D&I “is a business strategy, not an HR program”. These initiatives must be ingrained into the DNA of a business—enacted in every department and practice, not just by recruiters and HR managers—if they are to succeed.

The changes employers need to make are systemic, and they will take time. As Bourke and Dillon write: “The challenge lies in translating a nod of the head to the value of diversity and inclusion into impactful actions—and that necessitates a courageous conversation about approaches to date.” The 2019 Global Human Capital Trends report by Deloitte, speaks to the need for companies to reinvent themselves as social enterprises—organizations “whose mission[s] combine revenue growth and profit-making with the need to respect and support [their] environment and stakeholder network.” This integration of business goals and human focus reflects, not just the research, but an overarching shift in society, and paves the way for the future of diversity and inclusion.

Don’t forget to check out Vault’s most recent rankings of the Best Companies for Diversity, to see which employers in the law, banking, accounting, and consulting industries are making the biggest strides in diversity and inclusion.