How does a diverse and inclusive culture impact organizational performance?

I clearly remember a large FMCG company having primarily recruited its marketing team from the capital city in SE Asia with little to no relation with its broader shopper base in the provinces. This created a real disconnect to the very customers they were aiming to serve. Diverse teams can better understand and connect with a diverse customer base. They can identify and address the unique needs and preferences of various customer segments. This understanding can lead to more effective marketing strategies, product development, and customer service, ultimately driving revenue growth.

There is a maturity journey most companies go on, starting with optically diverse hiring to 'tick a box' or hit a target. They then move on to "bring your authentic whole self to work" because they realise you get none of the benefits of diversity if everyone feels pressure to conform. The hardest point to get to is where colleagues from historically underrepresented groups can fully be themselves AND STILL progress to leadership positions. This is where many organisations are struggling.

76% of Gen Z'ers in a recent UK/US study said that diversity and inclusion in a company is important to them - as important as climate change. Companies that don't get with the program when it comes to D&I will be seen as dinosaurs.

A diverse and inclusive culture boosts an organization’s performance and competitiveness by enhancing innovation, decision-making and employee engagement. It also reduces turnover and attracts top talent. Such organizations are better positioned to meet diverse client needs, excel in global markets and navigating multicultural business scenarios, thereby gaining a sustainable competitive advantage while upholding ethical standards.

Every organization has a primary goal of driving its business. Whether its generating revenue, increasing clients, or building awareness, there are numerous studies and business cases showing diversity and inclusion improves financial performance, productivity, and reputation. Despite the evidence, a diverse and inclusive culture is often viewed as "nice to have" and not a value-add. Additionally, a small investment in time and financial resources are required to measure the impacts of a diverse and inclusive culture, however it can be difficult to procure as other business priorities take precedence.

The culture comes from leadership and the leaders are the culture. The leadership in many companies is not diverse and this cannot be changed overnight. Getting a non-diverse leadership team to create a diverse and inclusive culture is why many companies are struggling.

In my experience, in large organisations, any recruitment requires the selection panel to have training in equal opportunities. The difficulty arises with applying the same principles on a day to day basis. Embracing ideas from those who think differently, is often a struggle for those who are used to hierarchies and associated controls. In such situations, to ensure that inclusion actually happens, requires you as a team leader, to work extra hard. Key is creating the right collaborative space that encourages people to trust you and trust that what they say, will be taken in the right spirit. In short: create a fully functioning team, where humility, respect and commitment to joint goals is ‘in’ and the blame culture is definitely ‘out’.

The education of senior leaders needs to be prioritised and sustained - both formal workshops and training but also self-education through books, videos, podcasts. They need to become 'fluent' in inclusion so they can then walk the talk. ERG and Staff network leaders need training and more structure (clear vision, scope, plan, budget) so that the groups become effective at delivering change rather than risk becoming talking shops that add little value.

Organizations can start small to find ways to apply a diversity and inclusion lens when pursuing business goals. As they achieve them, gather evidence and continue to build upon a business case that additional resources applied towards diversity and inclusion will continue to yield results. For example, if an organization wants to hire talent at a specific college, include diverse student organizations in custom, targeted communications inviting them to hiring events. At one organization I supported, this simple step resulted in an increase in diverse hiring, engaged employees and leadership, and increased budget for future efforts.

A leader's actions amplify efforts. Their time is also limited, so start small. Ask them to make the opening remarks during an employee resource group event. Ask them to post about a diversity and inclusion initiative on social media. Ask them to invite their team members to attend an unconscious bias training. As the impacts of these actions build, as well as their own reputation for supporting diverse and inclusive efforts, you can begin to ask for their support in advocating for wider changes to policies and processes. Some examples include investing resources to add gender neutral restrooms on premises or additional budget to improve parental leave policies.

Leaders need to model the way. I always encourage leaders to dig deep and share their own backstory of times when they have been the outsider - how did that feel? Did anyone support you in that situation? (examples of allyship) Share stories of where they have seen allyship in the organisation and the impact of that. Be open and honest about how non-inclusive behaviour has been tackled so that a clear message is sent about what is and isn't acceptable.

A diverse and inclusive culture positively impacts organizational performance by fostering creativity, innovation, better decision-making, adaptability, employee engagement, and customer satisfaction. It brings together a range of perspectives, skills, and talents, leading to improved problem-solving, productivity, and market reach. A diverse and inclusive culture can drive organizational performance by fostering creativity, innovation, adaptability, better decision-making, employee engagement, and customer satisfaction. By embracing diversity and inclusion, organizations can create a more dynamic and competitive work environment that promotes growth and success.