Co-Founder and Chief Talent Officer at FlexTeam.
Getty
The business case for diversity and inclusion is clear — diversity in thought correlates directly to increased economic output. But without a chief diversity officer or chief diversity and inclusion officer, it falls to HR to lead on diversity and inclusion.
There are a multitude of known strategies for improving diversity and inclusion, including creating policies and practices that tackle unconscious bias, improving company culture and securing buy-in for D&I strategies. In addition, I recommend engaging on-demand consultants and advisors as part of your D&I strategy.
The Business Case For Diversity And Inclusion
McKinsey found that companies with diverse executive teams achieved 53% higher returns on equity than less diverse teams, Similarly, Morgan Stanley found that the share price of companies with more women in their workforce (and in senior positions) outperformed companies with fewer women.
McKinsey also discovered that companies with the most gender-diverse executive teams were 21% more likely to have industry-leading profitability, while companies with ethnically/culturally diverse executive teams were 33% more likely to outperform on profitability. More importantly, McKinsey illustrated the penalty for diversity failure: Companies at the bottom for both gender and ethnic/cultural diversity were 29% less likely to achieve above-average profitability.
Improving diversity and inclusion clearly leads to improved business and economic performance. What's not as obvious is how to improve diversity and inclusion.
Complexity Of Implementing D&I Strategies: Tackling Systemic And Structural Issues
Diversity and inclusion is complex. Start by objectively defining and measuring diversity and inclusion goals. Given the business case for D&I, all executives should work to increase diversity and foster a culture and environment where every employee feels welcome. Authentically incorporating D&I into your corporate culture is necessary to ensure that your D&I strategy is embraced and successful. This, in turn, helps HR create a recruitment strategy for attracting a more diverse pool of candidates — and build a robust talent pipeline to attract, develop, mentor, retain and sponsor diverse leaders and workers at all levels.
Unconscious Bias Training Isn't Enough
Unconscious bias training makes individuals aware of how stereotypes and biases impact behaviors and decision-making. Training executives and employees to overcome racism, prejudice, bias and discrimination is a start, but it's not enough. D&I strategies must also tackle systemic and structural issues (SSI) — complex issues that allow biases to persist in the workplace and throughout society.
HR professionals need to ensure that evaluations for hiring and promotions are done by multiple leaders using objective variables, lessening the effects of the systemic bias of preferring to hire people who look similar to themselves. Diverse search and evaluation committees can be helpful, if truly diverse — one token woman, trans, black or brown person doesn't count.
Sponsorship Programs Are Better Than Mentorship Programs
Sponsorship programs are an effective way to overcome network gaps, another systemic and structural issue that further increases inequality. CNBC reported that up to 80% of jobs are secured by networking. Most people leverage their network ("who they know") to secure even a first-round interview — and diverse candidates usually have smaller, less powerful networks to leverage.
While mentors serve as advisors who help mentees shape their ambitions and plans, sponsors take a direct role in sponsee advancement. Sponsors are senior-level leaders who advocate for sponsees, helping them earn promotions and raises and get credit for their successes. Sponsors put skin in the game, using their network and connections to advance sponsees via guidance and, crucially, endorsement.
Sponsorship or advocacy programs should contain elements to support the roles and development of both sponsors and sponsees. For example, create structured leadership programs for sponsees and formulate a thoughtful selection process for sponsors, positioning sponsors as agents of D&I change to lead to economic gains. Lastly, build in strategic touchpoints and guidance for sponsor-sponsee interaction.
These are just a few D&I strategies that every company should implement today. As Ellen Pao says, we also need more radical solutions to tackle D&I. But these strategies move slowly, and economic gains will take time to manifest.
On-Demand Consultants And Advisors As A Short-Term D&I Strategy
Melinda Gates founded Equality Can't Wait on the premise that it'll take 208 years to achieve gender equality at the current rate. We need to do more to tackle diversity and inclusion — and companies who don't will stagnate as competitors with clear and effective D&I strategies will increase economic output. Working with diverse on-demand consultants and advisors is an unconventional D&I strategy, but an effective one.
Firms like ours (FlexTeam) and Business Talent Group exist to keep women engaged during the mid-career period when many choose to leave the traditional workforce — a decision often driven by caregiving for children or elderly parents. By reengaging women who have left the traditional workforce, you make a direct impact to keep the workplace more diverse.
But beyond that, corporations that need to move quickly to increase diversity are turning to on-demand workers, consultants and advisors as part of their D&I strategy. These on-demand thought leaders from diverse backgrounds — backgrounds that your company lacks — can tackle high-value projects for your company. By engaging diverse thought leaders to assess and react to technology trends and challenges, your company can start to manifest economic gains from diversity of thought while working on longer-term, wide-ranging D&I strategies.
A Better Future
Diversity and inclusion should be an integral component of your management strategy. Today's executives and HR leaders need to engage diverse on-demand consultants and advisors as part of a multiprong strategy to tackle the complex, systemic, structural problems at the root of D&I issues.
Are you heading toward stagnating business performance or are you leading your organization toward a better future and improved economic performance?
Forbes Human Resources Council is an invitation-only organization for HR executives across all industries. Do I qualify?
