About 40 years ago, organizations in the United States and in other parts of the world began to seriously consider the implications of an increasingly diverse workforce. At first, these considerations were primarily for legal reasons, as more inclusive laws were passed. The conversation changed in 1987, when the U.S. Bureau of Labor Statistics published “Workforce 2000: Work and Workers in the 21st Century.” In these last 25 years, the diversity conversation has gone from primarily legal to primarily moral to primarily business.
Still, diversity and inclusion (D&I) has remained somewhat “off to the side” of leadership. D&I is viewed as a good thing to do, even important, but it is still separate from the core of leadership. We believe the continuing demographic changes, increasingly globalized workplace and marketplace, rapid changes due to the information revolution, and growing importance of people-related intangible assets have moved inclusion to the center of leadership in this decade.
Many companies are looking more closely at several D&I issues:
- How little the demographics of senior management ranks have changed despite 40 years of attention to diversity.
- The growing body of research that links diversity and inclusion to measurable business success; the companies that get D&I right are gaining a competitive advantage, and those that don’t run the risk of becoming obsolete.
Smart organizations realize they need to get their leaders fully engaged in creating inclusive climates that work for a diverse workforce and customer base. There are four actions leaders can take to get an “inclusion dividend.”
- Increase self-awareness about the unconscious, unintentional biases that permeate behavior, and decision making. Leaders need to stop defending their intent to be non-biased and instead get interested in the impact their unconscious biases have on their staff and customers. Extensive research from Harvard, Benaji, Gladwell, Kahneman, Steele, Thayler, and others conducted over the last 10 to 20 years has proven that we are all biased. It is a waste of energy to argue over this fact—implicitly or explicitly. The central issue is to develop techniques to minimize bias.
- Look for and interrupt the insider-outsider dynamics that can permeate interactions and team dynamics. We all have the experience of being both “insiders” and “outsiders.” Leaders tend to have more insider group memberships than outsider memberships and, therefore, a lower level of awareness of these dynamics. Insider-outsider dynamics and unconscious bias “feed” each other and can profoundly impact the ability of increasingly diverse and global teams to work together effectively.
- Weed out aspects of the culture and systems—both formal and informal—that are relics of the past, reflect unconscious bias, or unnecessarily favor some groups over others. Culture can be seen as organization-wide, but it is also local to divisions, departments, and teams. All leaders shape the culture of their teams, and they need to be very conscious and intentional that their team’s culture is welcoming and inclusive.
- Directly and explicitly link inclusion to business goals and leverage inclusion to improve business results. Every leader should understand how inclusion affects their business. There is both an internal impact (recruiting, retention, productivity, and full engagement), and an external impact (client relationships, marketing). A leader needs to communicate this clearly to their team.
This is not just about feeling good; it is about creating a climate that is productive and allows for innovation. Albert Einstein said, “We cannot solve a problem by using the same kind of thinking we used when we created them.” Leaders need to make this happen by creating cultures that encourage full engagement of a wide variety of perspectives.
In an increasingly competitive business world where growth is less predictable and margins are tight, an important distinguishing factor is the ability to leverage human capital. The percentage of intangible assets of the S&P 500 has gone from 17 percent in 1975 to 81 percent in 2009.
Intangible assets include things like IP, ideas, and relationships. This heightens the importance of most companies’ biggest investment: people. Inclusion is now at the center of a leader’s ability to harness this resource. When they do it well, your company receives an inclusion dividend.
