Why EDI Matters
The Business Case for Diversity, and Beyond
It is now common knowledge in the business world that assembling diverse work teams is important for organizational success. Substantial research has demonstrated that teams of people from diverse backgrounds consistently outperform homogenous groups, as they are more creative, better problem-solvers, and more financially profitable. For example, according to a 2018 report by McKinsey & Company, companies in the top quartile for gender diversity on executive teams were 21% more likely to outperform companies in the fourth quartile on profitability and 27% more likely to have greater value creation. And at the board of directors level, more ethnically and culturally diverse boards were found to be 43% more profitable. The value of diverse teams is also intuitive: of course people from different cultural backgrounds, genders, and other intersecting identities and lived experiences contribute an array of talents and distinct insights to teams leading to innovative solutions to problems and making businesses more successful.
While the business case for more diversity is significant, in isolation it is insufficient. Equity, the value and practice of meeting the needs of distinct groups for greater collective wellbeing, is needed as a driving force. An organization that only embraces diversity in the workplace in pursuit of profits fails to grasp the greater purpose: social responsibility to co-create more equitable communities, starting with the workplace. When the search for diversity is motivated only by interest in the bottomline, efforts fail because in time they reveal themselves as hollow and unsustainable due to the inability to appreciate how to cultivate an equitable and inclusive workplace, which enables diverse teams to shine. This is demonstrated by ongoing difficulty hiring diverse teams, assertions of a hostile workplace climate, and high turnover. Simply stated, people need to feel valued to do their best work, and the benefits of diversity in an organization are lost if there are not organizational structures in place to value diversity. Equity as a core, mission-aligned value, sets the foundation needed for a thriving, diverse organization and communicates to employees and external stakeholders alike that you value their wellbeing. Diversity in the workplace in combination with well-designed practices for equity and inclusion are essential because these efforts empower people to bring out their best and simultaneously allow the organization to demonstrate its core values, beginning with employees.
Organizational equity may be understood within the context of an institution as employees of different social identity groups (by race, gender, ability status, etc) achieving similar measured outcomes in an organization even as methods in process may be distinct for different groups. Equitable outcomes may be measured by indicators such as rates of mentorship, professional development and leadership opportunities, positive performance evaluations, promotions, bonuses, salary raises, and other coveted experiences that may advance one’s professional capacities and career track. Equity is also developed with policies and practices of an organization designed not as one-size-fits-all, but rather as flexible to attend to the distinct needs and interests of different identity groups. For example, culturally-specific marketing, recruitment, or employee engagement initiatives, if designed well, will more effectively speak to the needs and interests of the specified group being attended. (To which do you respond with more attention: a personal message addressing you directly or a general circular message?). Equitable strategic planning takes into account data that indicates who is underrepresented or underserved and how in order to seek tailored ways to meet the sometimes specific needs of distinct groups and create greater balance on an institution-wide scale.
Organizational inclusion, then, may be understood more at an interpersonal level in which the normed behaviors of members of an organization have created a culture that values difference, whether by background, appearance, lived experience, or perspective. A culture of inclusion is established when there is collectively a high degree of psychological safety, in which people feel valued, connected to their colleagues, and empowered to take risks such as expressing their ideas openly, even if they diverge from popular opinion. Research shows that psychological safety is a cornerstone of effective work teams because when employees feel free to be themselves, make mistakes, receive constructive criticism, and learn, they improve, are more engaged, and more productive, (Edmondson, 1999). Inclusion strategic planning essentially analyzes employee engagement across all levels of an organization to see if diverse work teams are commonly feeling heard, valued, supported, and meaningfully engaged at work in order to help all employees be at their best.
EDI Mission Alignment
The diversity of face(s) an organization presents to the world communicates a lot about its core image and values. The more investment made to standardize equitable policies and to foster inclusive workplaces, the more the organization will attract and engage diverse teams in a virtuous cycle. And if an organization’s mission values social responsibility or serving humanity, then it is important to appreciate that the integrity of the core organizational identity itself is underpinned by the people who work there – that is, by how it creates and sustains a diverse, equitable and inclusive workplace.