Companies have focused on improving the diversity of their executive leadership and talent pool for years, with progress at a slower pace than many leaders and directors aspired to. It has become increasingly evident that improving diversity without enhancing inclusion does not allow the value of diversity to be fully realized.
This poses two key questions:
- Why is inclusion so important?
- Why is inclusion so difficult to advance?
Many business leaders use “diversity and inclusion” as a single phrase or use the words interchangeably. Understanding the difference between the two may be an important starting point for organizations to achieve better outcomes.
- Diversity covers a wide range of characteristics which people were born with or have acquired, such as gender, race, ethnicity, disability status, military or veteran status, or sexual orientation, among others.
- Inclusion ensures all members of an organization feel welcomed with equal opportunities to connect, belong, grow, contribute, and advance their skill sets and careers, while feeling comfortable and confident being their authentic selves.
Diversity is about traits while inclusion is about feelings and behaviors.
Diversity and Inclusion Challenges for Organizations:
- Articulating Strategic Goals. Many organizations have primarily focused on diversity because it is easier to quantify and measure. But defining and prioritizing strategic approaches to inclusion can differentiate business results.
Creating Accountability at the Board Level. Many organizations lack accountability in board and executive oversight of diversity, and especially inclusion. In reviewing the charters of a group of Russell 3000 board committees, most focused on diversity and demographic composition; only a few made reference to inclusive organizational culture or practices. Conversations with directors confirm that boards may not consider diversity and inclusion as separate concepts.
“Having a diverse workforce is critical to achieving business success. With diversity of people comes a myriad of perspectives and unique points of view, which drive more innovation and help us reach our business goals. We recognize the importance of an inclusive culture to continue to build upon the power of diversity for our company.”
– Sona Chawla, President, Kohl’s Corporation; CEO Perspectives Fellow, 2010
- Broadening Performance Management Scorecards. Scorecards evaluating the performance of organizations and individual leaders tend to focus on lagging measures of diversity, instead of leading indicators that address inclusivity. By developing a set of metrics that address progress on key inclusion topics — such as trust, respect, courage, fairness, flexibility, humility, empowerment and commitment – companies may be able to better predict and address issues around employee engagement and retention.
The Importance of Inclusion
So why is inclusion so important?
One reason lies in the struggle to attract and retain top talent, particularly in a low unemployment environment. Based on a 2017 survey by Deloitte and the Billie Jean King Leadership Initiative1 of over 1,300 full-time employees from companies across the United States:
- 80% reported that inclusion is important when choosing an employer.
- 39% reported they would leave their organization for a more inclusive one; among millennials it was more than 50%;
- Nearly 33% of millennials reported they had left an organization for one they viewed as being more inclusive;
- Across all respondents, 47% said “an atmosphere where I feel comfortable being myself” was the most valued aspect of workplace culture.
A stronger sense of connection and belonging that allows employees to leverage their unique strengths and skills is often rooted in everyday experiences with direct managers, peers, and teams.“Today’s talent can choose which employers they want to work for. An inclusive work environment means a place where everyone feels accepted, able to speak up to share insights, and provide more value to the organization.”
– Opella Ernest, SVP, HCSC Operations, Health Care Service Corporation; CEO Perspectives Fellow, 2018; Leading Women Executives Fellow, 2013
How to Achieve a More Inclusive Environment
What can companies do differently to address these challenges and achieve a more inclusive environment?
Develop a Framework of Desired Attributes and Behaviors. A framework can be tailored to reflect the unique aspects of the organization or may leverage existing ones. Catalyst, Salesforce, Korn Ferry and the Society for Human Resource Management (SHRM) are organizations which have identified important traits and behaviors of inclusive leadership.
Set the Tone at the Top. Fostering an inclusive environment must start at the top, with executive leaders consistently communicating that everyone in the organization has a critical role to play. Inclusive behaviors can be embedded in key aspects of the talent lifecycle of recruitment, assignments, performance management, compensation and succession planning, so that it becomes an integral part of the culture and talent processes.
Ensure Oversight at the Board and Executive Level. Accountability at all levels, with tools and mechanisms for measuring progress, are essential. It is also important to ensure oversight of diversity and inclusion by the board and executive leadership, and may include:
- Assessing how diversity and inclusion are embedded in strategy, performance, risk management, talent and succession planning, with quantitative and qualitative measures to define success and monitor progress.
- Reviewing the organization’s evaluation and compensation processes to ensure they are conducted with a focus on fair and equitable outcomes.
- Evaluating board performance in embodying inclusive leadership traits and conducting inclusive governance practices through the annual board self- assessment, or as part of the Governance Committee’s mandate.
“Driving inclusion is a shared responsibility between executive leadership and the board, but the roles are different. Management develops the strategy and executes the inclusion mission. The board exercises oversight and holds itself, management and the organization accountable.”
– Melvin Williams, President, Nicor Gas; CEO Perspectives Fellow, 2016
Evaluate How Employees View Company Culture. Evaluate how people throughout the organization assess the company’s inclusive culture. While the tone at the top is critical, it is also important to understand the “mood in the middle” and the “buzz at the bottom”. A 2015 Gallup study, State of the American Manager: Analytics and Advice for Leaders2, reported that managers account for at least 70% of the variance in employee engagement scores.
A company’s engagement survey can incorporate questions to address inclusion and determine gaps between cohorts. Statements might include:
- I feel valued and respected as an individual;
- I have a strong trust in leadership;
- My manager allows me to leverage my unique strengths and skills.
Pulse surveys can measure how managers, teams and team leaders are performing.
Some companies have established a baseline to identify what actions are required to address culture gaps, by monitoring the correlations between inclusion, engagement, and retention and then measuring and monitoring progress.
Develop Ongoing Training. Training and development tools may include:
- New hire orientations that define expectations for inclusive behavior from Day 1.
- Milestone training programs that discuss inclusive leadership behaviors with the greatest impact at specific leadership levels.
- Awareness and education of unconscious bias in everyday behaviors, perhaps with employee resource groups, inclusion councils, executive leaders, or individual teams.
- As an example, in late 2018, A Day of Understanding was championed by a group of CEO Action signatory companies3 as a day-long dialogue to embrace differences, provide education and insight and build more inclusive cultures inside and outside of the workplace. As an employee from a large global consulting organization noted:
“While I understood my company embraced an inclusive culture, the opportunity to collectively pause for a day to discuss such challenging topics as unconscious bias and sense of belonging, as well as to hear my colleagues share their life experiences and be vulnerable, was incredibly special. I did not want the session to end.”4
To attract and retain top talent, organizations must respond to the needs and priorities of the rapidly changing workforce and business environment. Organizations that clearly articulate and execute strategies that advance both diversity and inclusion can differentiate themselves at a time when corporate purpose is being redefined and broader stakeholder considerations are being elevated.5
Why not commit to a laser-focused effort to cultivate an inclusive culture in your organization? Unleashing the power of your increasingly diverse workforce and achieving better business outcomes by advancing a culture of inclusion is a winning strategy in any scenario going forward.
- Unleashing the Power of Inclusion: Attracting and Engaging the Evolving Workforce, Deloitte University Leadership Center for Inclusion and Billie Jean King Leadership Initiative, 2017
- State of the American Manager: Analytics and Advice for Leaders, Gallup, 2015
- CEO Action for Diversity & Inclusion Hosts Largest Conversation About Bias and Understanding in the Workplace and Beyond, December 7, 2018
- Deloitte’s Day of Understanding: Advancing our Inclusive Culture, LinkedIn, Dr. Terri Cooper, December 12, 2018
- Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy that Serves All Americans’, Statement on the Purpose of a Corporation, August 19, 2019
By Deborah DeHaas, Director and Advisor, Corporate Leadership Center; Vice Chairman and National Managing Partner, Center for Board Effectiveness, Deloitte