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Diversity And Inclusion: A Business Case

Adrian Dixon

February 12, 2019

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Data-Driven Approach to Diversity, Equity, and Inclusion Download

Are you trying to make a case for diversity and inclusion in your organization?

No organization will actively reject the idea that diversity and inclusion programs are good things for their business.

Once you get past the “OK, no one is outwardly saying no to this idea” phase, you get to more complicated ground, though: what are companies actually doing about diversity?

And then you come to this: can you actually build a business case around diversity and inclusion? What does that look like?

Follow the bouncing ball

The first important situation is simply dealing with standard organizational process. To put anything in play at most companies, you need to present a business case.  Being asked to develop and present a business case can be a difficult situation when it comes to diversity and inclusion, because the very concept seems morally indisputable. You can have a situation where the majority wants to understand essential business concepts such as cost, duration, involvement, KPIs, ROI. The minority then feels further diminished by having to argue for such a basic human tenet.

What’s worse: a proposal for a diversity and inclusion business case getting rejected could be negatively perceived by one or more minority groups; at that point, there could be a mass exodus from the company. If a diversity and inclusion program is viewed as in line with the corporate vision or mission but then is rejected, that is unabashedly hypocritical. This will impact your talent strategy.

Clearly this is a challenging space — so there needs to be an extremely clear focus and explanation around these core areas:

  • Why: The rationale and purpose for the diversity plan
  • How: The process for its unfolding
  • What: The definitions of success for it

We’ve outlined the key things that need to be established — so now the question is, how do you do that?

Convince the Chief Executive

This one goes without saying, hopefully. An organization ultimately mimics the actions of its most influential decision-makers. If a diversity plan seems like lip service to the C-Suite, it will seem like lip service to everyone else eventually, and further widen the divide in your organization. The CEO especially needs to be proactive about asking for updates and holding people accountable.

Base it on research

Thankfully, much research does exist on the fiscal, bottom-line value of diversity in the workplace. Know it and use it.

For example: McKinsey research from January 2015 has shown that companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians. Aspects are visually represented here:

As you see above, companies in the bottom quartile in these dimensions are statistically less likely to achieve above-average returns. As McKinsey overall summarized this:

“… when companies commit themselves to diverse leadership, they are more successful.”

Remember: we’re discussing financial returns in the context of diversity here; this is crucial for any business case presentation, because any business case presentation needs a bottom-line tie to be successful and approved.

There’s more, also courtesy of repeated McKinsey research:

That’s a list of benefits and rationales around diversity management. Feel free to use these in your business case presentation.

Think about some core questions

They include:

  • Who are your natural champions, especially among executives?
  • Has the CEO embraced or said no to a diversity program in the past?
  • If yes/no, what were the issues that came up then?
  • How well-known is the current set of issues with diversity among the senior leadership team?
  • What sorts of other projects and initiatives have gotten the most senior leadership backing and why?
  • Who among decision-makers might offer the most resistance?

Starting with questions like that allows you to strategically think about your approach — if the business case will ultimately be an official presentation, you need to spend some time beforehand targeting certain members of the decision-making team in casual (or networked) settings to lay some groundwork.

An important additional consideration

The vast majority of decisions in corporate North America are made by an extremely homogenous group of individuals with similar opinions and backgrounds. There can be a tendency in that group to think of diversity and inclusion issues as “an HR thing” or simply “a diversity thing,” which can lead the people with true authority to enact change to be a passive audience. The goal is for these leaders to be an active audience. The true call to action here is simple. If you are a white male decision-maker within your organization, consider the above: the research and what it proves, and the business case and how it can unfold. Don’t just consider it and kick it to HR. Consider it as a legitimate business advantage which can grow your bottom line. And then start thinking about how best to reach the people you need to reach and actively move this forward.

What about tech?

One of the challenging aspects of promoting D&I is that recruiting teams are often insanely busy, and so they can have a tendency — human nature — to fall back on like-minded, like-sounding, like-activity-doing candidates, especially with a slew of resumes in front of them. Who wants to look at 500 resumes if Ben went to the same school as the SVP of Product, right?

You can absolutely use technology to make the screening process easier. In fact, the current stage of where AI and machine learning are within the market is probably best used for screening/top-of-funnel type activities.

Then there’s the issue of previous searches. Maybe you’re growing pretty fast (hopefully!) and the first time you had an open role, you went with the Ben described above, because of like-minded characteristics. Well, when you hired Ben, there were 15 other qualified candidates, and some of them represented a diverse pool. A standard ATS is “dumb” software; it can’t easily go back into the old candidates and pull them up for new roles. But a process called “rediscovery” is “smart” software — it can go back into your ATS and find qualified candidates for new roles.

Those are two tech applications back to saving recruiter time and being able to more thoughtfully consider diverse hiring approaches. Should go without saying here, but you also need to make sure whatever tech stack you use all integrates together, otherwise you’ll run in circles on that for a while and won’t get much/anything done around diversity.

A final consideration

Please remember that “diversity” doesn’t just mean race and gender; it also refers to cognitive diversity, as people who run secretive labs at Facebook (!!) have acknowledged.

And beyond just racial diversity, gender diversity, and cognitive diversity … also consider diversity of interests. You don’t want people where work is their whole life. It might feel like you want those people because they will be more productive, but those people also burn out very quickly and don’t offer you the productivity you seek. Hiring managers are increasingly starting to realize this.

And finally, the idea of “inclusion” goes beyond hiring. You do want to include the right people on the team, and foster that sense of being together, but “inclusion” also means creating a sense of what academics call “psychological safety,” both during the hiring process and once someone is an employee.

What else would you add on the pursuit of diversity and inclusion?