DEI Leaders are the new Chief Profit Officers (and other musings on DEI)

By Cathrin Stickney, Founder & CEO of Parity.Org

Diversity, equity and inclusion have been thrust into the spotlight as of late –?but for mixed reasons. DEI budgets are being slashed due to economic conditions, political rhetoric is taking hold, and a lack of measurement to demonstrate an ROI for the work being done. But government and business leaders can’t be so quick to throw DEI to the wayside. Instead, we need to put DEI front and center in all of these conversations for a different reason: as a way to drive superior business outcomes.?

What does DEI do for a business? Help drive revenue!

Studies have shown that diverse teams are more innovative, more creative, and more profitable. They are better able to understand and meet the needs of a diverse customer base. And companies that prioritize diversity and equity are better positioned to attract and retain top talent. Every company should be looking for their competitive edge – and I’d go as far to say that a DEI leader is the new Chief Profit Officer.?

But it even goes beyond profitability and innovation. Sodexo, a business services company with more than 400,000 employees, wanted to know the impact of gender parity at the department level. In a 2018 study, they collected and analyzed data from 50,000 of their managers from 70 global departments to see the impact of maintaining gender balance in leadership at the department level. They found that in those entities where women represented 40% - 60% of leadership: operating margins increased by 8% points, customer retention by 9% points, employee retention by 8% points; safety by 12%, and employee engagement by 14%. According to data collected by the EEOC, the same goes for racial diversity. The proof is in the pudding. Business leaders just need to listen, take action and reap the benefits.?

What DEI is not: a threat?

Some people in positions of power feel threatened by diversity efforts. They believe if one person gets a promotion to a coveted position, it means that someone else was unfairly shut out. It’s uncomfortable for some, but we should be reminded that no one seemed to think it was unfair when a white man was promoted into an executive position, so why does that change when that person is a woman or person of color??

But discomfort is not a good enough reason to dismantle DEI efforts. In fact, it's exactly why these efforts are so necessary. The discomfort that some may feel is a symptom of a deeply ingrained system of inequality that has existed for centuries. DEI work is about acknowledging that inequality and working to address it. It’s simply about creating a level playing field for all people, regardless of their race, gender, sexuality, or any other factor. Because when there’s a truly level playing field, it naturally follows that a more diverse range of people ends up getting hired. And as we now know… it’s good for business!?

What’s next? Buck the trends

So what can we do to reverse trends that are threatening DEI efforts? First, start with education. Many people simply don't understand what DEI work entails and may see it as another line item on a balance sheet that yields intangible returns. Others may see it as a threat to their own power and privilege. Programs should stress that DEI efforts are a way to build a more successful business and a stronger, more inclusive society for everyone.?

By 2045, only a couple of decades from now, the non-hispanic white population will become a minority in America. In many cities and states, we’re already there. Less-than-equal representation of non-white, non-male employees at the leadership level is counter-productive and counter-intuitive, and largely contributes to the overall pay gap between them. These gaps in representation create life-long economic disparities that result in higher rates of poverty among women and people of color throughout their lives and throughout retirement.?

In Conclusion…?

DEI work is not a one-time, check-the-box effort. It requires ongoing commitment and investment, both in terms of resources and mindset. It means being willing to have uncomfortable conversations, challenge our own biases and assumptions, and actively work to create a more equitable workplace. It takes a skilled set of diversity and inclusion experts to elevate the culture and put in place practices that enable all employees to reach their full potential. And?the outcome is fruitful, not only for society, but for the businesses that bring the conversation to the forefront, and practice what they preach.