Reports of the Death of DEI are Greatly Exaggerated…

Just as a puppy is for life, not just for Christmas, so LGBTQ+ inclusion efforts (and, indeed, all inclusion work) must be for all twelve months of the year, not just for Pride Month.

As we enter another June, doubtless this month we will again see many an organisation making a visual show of support for LGBTQ+ inclusion, and the rights movement that kicked off in earnest with the Stonewall Riots 55 years ago.

But, just as inevitably, there will also be widespread cynicism that, in many cases, this amounts to a PR exercise in “rainbow washing” (or what I call “optical inclusion”), masking a lack of meaningful commitment – externally and, in particular, internally – year-round.

And, in cases where that is true, it is a huge missed opportunity.

For this lack enduring commitment and action not only hinders the progress of LGBTQ+ inclusion; fundamentally, it also damages both the current success of the organisation and its ability to future-proof itself. Alongside the immediate erosion of customer goodwill which occurs when an organisation’s sincerity is called into question, there is also a failure of corporate stewardship by neglecting to create an inclusive workspace in which innovation, creative problem-solving and superior risk identification can flourish.

Organisations are agents of change, with the reach, influence, resources and durability to make a positive difference in the context of social justice. But it is not a one-way street: equally, organisations themselves stand to benefit, as the pay-off from following inclusive workplace practices is real and significant.

Research published earlier this year by Open for Business , based on its 2023 survey of the 290 largest American, British, German and Australian listed companies, shows that, on average, the top 25 most transparently LGBTQ+ inclusive companies are 2.3 times more profitable than the 25 least so. That is a massive boost to the bottom line.

Nor is this effect limited only to LGBTQ+ inclusion, of course; ALL inclusion makes a positive difference to corporate performance. For example, 麦肯锡 ’s report, ‘Diversity Matters Even More’, published in December 2023 and based on a survey of 1,265 companies across 23 countries and six global regions, concluded that companies with demographically diverse executive leadership teams achieve materially higher financial returns, with those in the top quartile for gender and ethnic diversity showing, respectively, a 39% and 27% likelihood of financial outperformance.

Equally, as well as inherent human characteristics, diversity of traits acquired through experience – such as industry background, career path, international postings, areas of study etc – all also carry a potential supercharge effect for companies that adopt the inclusive practices needed to unlock their potential.

With the evidence being so persuasive, it is curious, then, that more organisations do not push back more loudly against the unfounded claims that Diversity, Equity & Inclusion creates both an unfair, unmeritocratic outcome at the individual level (some such claims even alleging that DEI really stands for “Didn’t Earn It”) and, at the entity level, a negative effect on the financial performance of organisations that support it (with the “go woke, go broke” mantra) – reportedly, dozens of shareholder proposals even have been submitted by the US National Center for Public Policy Research, alleging that target companies are abandoning their fiduciary duties to shareholders by pursuing DEI.

Contrarily, as the statistics quoted above show, a company would actually be failing in its fiduciary duty to shareholders, which of course is to maximise their wealth, by NOT meaningfully supporting DEI in its workplace.

Inclusive practices allow individuals to contribute fully and, in so doing, create teams which are more than the mere sum of their parts. Just as a sports coach understands that each player adds different value and needs different inputs to help that value be realised, so a smart people manager knows that treating their team members equitably, rather than equally, is essential to get the best out of them; they are human first, resources second. So ‘one size fits all’, in the form of unfettered enslavement to meritocracy, merely results in sub-optimal (individual and team) performance.

In view of this, it is hardly surprising that, according to a report published last year by?Accenture, US companies leave the eye-watering figure of over USD 1 trillion on the table every year by not having sufficiently inclusive work cultures, due to factors like high turnover rates, low productivity and low engagement.

So, in the interests of their current and future success and robustness, organisations need to rise above the “war on woke” agenda of organisations with a penchant for describing DEI as a leftist revolution disguised as a plea for social justice, even apparently likening it to Mao’s Cultural Revolution in China! Because, alongside the social justice aspect of DEI, there is also a clear commercial imperative.

No less a voice than Jamie Dimon, CEO of J.P. 摩根 , effectively acknowledged this in a speech at the World Economic Forum in January this year. After proclaiming himself to be “not woke anything”, he observed that J.P. Morgan is nevertheless “thoughtfully continuing our diversity, equity and inclusion efforts.”

By breaking down the systemic barriers which compromise the value that diversity – of perspective, experience and heuristics – offers, companies can empower their people to minimise any felt need to codeswitch, self-edit or self-segregate, and any reluctance to embrace “constructive conflict” by challenging received wisdoms and the status quo. And in so doing, organisations can escape the quicksand of excessive homogeneity that underpins destructive outcomes like groupthink and unconscious bias.

So, when June comes to an end and all of the rainbow flags are packed away, organisations must not mothball their inclusion efforts with them. LGBTQ+, and all other forms of difference, are the lifeblood of corporate advantage – and through a genuine year-round commitment to DEI, organisations can create and maintain a psychologically safe work environment in which what Matthew Syed has superbly called “rebel ideas” are actively encouraged, valued and embraced.