Even by the volatile standards of 2020, it has been a rollercoaster year for workplace diversity and inclusion (D&I), which is increasingly considered to play a key role in enabling business resilience.
As Toby Mildon, D&I expert and author of Inclusive Growth, explains: “Having an inclusive and diverse culture enables organisations to bounce back more effectively. They become more resilient as there’s more diversity of thought, which leads to better creativity and innovation in decision-making and in finding new ways of going forward.”
However, the events of the current year have so far left a mixed legacy in D&I terms. After the coronavirus crisis struck, for example, many employers either cut their D&I budgets and dedicated personnel or shifted resources into general firefighting and keeping the lights on.
But this situation was certainly not true of all organisations. In fact, Stephen Frost, chief executive of D&I consultancy Frost Included, describes it as a “tale of two halves” and divides employers into three clear categories in evidence long before COVID-19.
How companies can do D&I right
The first group comprises businesses that undertake what he calls Diversity 101. This means their activities are mainly compliance driven, which includes undertaking gender pay gap reporting. The second set consists of Diversity 2.0 companies, which generate a lot of marketing noise, but do little of meaning beyond a series of public relations initiatives. The third, and by far the smallest, category is made up of Inclusion 3.0 organisations that embed D&I into all their decision-making processes and activities.
There’s a real risk that employers try to put sticking plasters over something that really needs surgery
At the start of the lockdown, says Frost, D&I largely fell off the agenda among employers in the first two categories as it was simply seen as an additional cost, while those in the third doubled down on it to inform their decision-making.
But since the killing of George Floyd and the resurgence of anti-racism and the Black Lives Matter movement, the situation has changed again. Mildon explains: “It’s reignited D&I activity in many businesses, especially around race and ethnicity, so those who had previously taken their foot off the accelerator have put it back on. But the results have been mixed, with examples of both good and bad practice.”
A key concern is employers simply make heartfelt statements and contribute to pertinent charities without addressing the real challenges faced by people in their own workplaces.
Why companies must fix their own culture first
Daniele Fiandaca, co-founder of culture change consultancy Utopia, points out: “There’s a real risk that employers try to put sticking plasters over something that really needs surgery. We’ve seen lots of leaders talk about their own journey and agree that society must deal with systemic racism. But we’ve not seen so many saying their own company culture needs fixing and here’s what they’re going to do to make it more inclusive.”
As a result, there is real anxiety that over time as the news focus inevitably shifts elsewhere, current levels of enthusiasm may fade, leading to the issue falling off the corporate agenda again, at least among those employers not in Frost’s Inclusion 3.0 group.
“I’m concerned this will all be a bit short lived and things will soon move on,” says Mildon. “If we are heading towards a deep recession, businesses are going to have to make some really difficult decisions. The danger is they’ll revert back to basics and D&I won’t be on the agenda, even though an inclusive culture would ultimately make them more resilient as high-quality decision-making is vital during times of crisis.”
Suki Sandhu, founder and chief executive of executive search firm Audeliss and D&I consultancy Involve, agrees. “The whole point of D&I is to make the business more resilient,” says Sandhu. “It’s about mitigating risk by accessing new skills and backgrounds and viewpoints, which gives you different perspectives and helps cover your blind spots so you can arrive at the best solutions for the organisation.”
How D&I can boost profitability
Natasha Broomfield-Reid, diversity, inclusion and wellbeing lead at law firm Mills & Reeve, also points to McKinsey & Company’s Delivering Through Diversity report, which makes a clear connection between D&I and profitability.
For example, the top 25 per cent of companies surveyed that had a good gender mix at executive level were 21 per cent more likely to demonstrate above average profitability. This figure rose to 33 per cent if ethnicity and race were used as markers.
But Broomfield-Reid points out: “If any organisation is truly focusing on its people, D&I has to be at the heart of your activities, not just an add-on. Inclusion is ultimately where you want to get to, but diversity also has to be recognised within that so you can access different backgrounds and experience, and give people a voice.”
For those organisations keen to embed such approaches into their company culture, she recommends auditing each business function to understand current practice and where it is falling short. Listening to the lived experience of employees is also just as vital when developing a long-term D&I plan, which needs to cover the entire employee life cycle and processes, ranging from talent acquisition and management to the supply chain.
Why the CEO must champion diversity
Another key consideration is ensuring the chief executive is seen to support the D&I agenda. “You don’t necessarily need to know exactly what the plan is, but you do need to make a public commitment about why it’s important to the organisation and how you intend to get there going forward, such as undertaking a listening exercise to create a strategy,” says Mildon. “The CEO has to walk the walk and model behaviour as we’re talking about a culture shift here and people always copy the behaviour of those above them.”
As daunting as such a proposition may sound on the verge of an economic downturn, Sandhu believes that ultimately it is about laying the groundwork now to reap the benefits in the long term.
“It goes back to the business case: if a diverse workforce is more productive, creative and innovative, this can only be a good thing for businesses going forward as we’re going to need all the support we can to get through what some have described as being the greatest recession of our lifetime,” he concludes.