Why diversity isn’t just another box to tick – let’s talk ROI

Diversity is a hot topic in boardrooms today. No wonder: One recent HBR study that examined 1,700 organizations across eight countries found that in every country studied, increased diversity equaled increased innovation - and the more dimensions of diversity represented, the stronger the relationship. 

Companies with above-average diversity experience see 19% points higher innovation revenues and 9% points higher earnings before interest (EBIT) margins. These benefits are recognized in the procurement function, where supplier diversity programs have had a growing footprint for some time.

I’m quite passionate about diversity. I sit on the board of advisers for the International Association of Outsourcing Professionals (IAOP) Women Empowerment, Leadership and Diversity Chapter, among many other endeavors for promoting diversity and inclusion in the workplace.

So I find it frustrating that despite all the upside in having a diverse workforce, less than 40% of organizations foster enabling conditions. These conditions include fair employment practices such as equal pay, participative leadership, top management’s support of diversity and open communication practices.

It’s not just a case of inequality – it’s a lost revenue opportunity.

So, how can we do better?

Here are some great suggestions from another HBR article on how to create a successful workplace diversity program, along with my observations:

Focus on intervention, not just bias reduction: Tooling up employees to actively intervene in bias situations builds confidence and awareness and increases collective accountability.

Invite non-managers to foster communication across the organization: Organizations’ diversity efforts often focus on recruitment and promotions - though realistically, these are just symptoms of wider issues in organizational culture. To understand and target the root of the problem, organizations must include employees at all levels in the hierarchy.

Keep the conversation going to stay accountable: Many organizations today are treating the push for diversity simply as ‘a box to tick’, and once the action is completed it can be put aside. Yet to be truly effective, this needs to be an ongoing conversation with results measured over time.

Be flexible - in both content and delivery: Every organization is unique, with different needs and challenges. While you should start with a plan, be sure to talk to employees to hear their challenges, interests, and biases, and incorporate this feedback into the program as you go. Feedback is key.

What do you think, and what have you observed? I’d be interested in hearing your feedback.

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