The impact of diversity, equity and inclusion on business

The murder of George Floyd and the subsequent rise of the Black Lives Matter movement, combined with the Me-Too movement, has raised awareness of diversity, equity, and inclusion (DEI) issues in various fields and institutions. provoked action. These movements challenge the status quo and demand accountability and justice for marginalized groups who face discrimination, harassment, and violence. As a result, many organizations are launching or launching DEI initiatives to foster more inclusive and respectful cultures, address systemic barriers and bias, and promote equity and representation in policy and practice. We are strengthening it. However, in many cases these efforts still perform well. As we have experienced over the past few months, the lack of direct linkage to the core business makes them susceptible to layoffs as soon as the pressure lifts or the economic environment becomes tougher.

One of the challenges facing DEI initiatives is the difficulty in measuring their impact on organizational performance. While there is ample evidence that DEI delivers benefits such as innovation, creativity, customer satisfaction, and employee engagement, it is often difficult to quantify and attribute these outcomes to specific DEI actions. It Is difficult. This can limit some organizations' willingness to invest in his DEI, especially when there are budget constraints or competing priorities. Therefore, DEI practitioners and advocates need to develop clear and consistent indicators and indicators that can demonstrate the value and effectiveness of DEI efforts.

A new study conducted by TechTarget's Enterprise Strategy Group (ESG) and sponsored by Amazon Web Services addresses this issue by quantifying the impact of a well-executed DEI strategy. This global survey evaluated 2,000 business strategists and their organizations' DEI efforts through questions focused on the benefits of DEI on business outcomes and performance. Based on the responses, ESG categorized organizations into four maturity levels: “Emerging,'' “Emerging,'' “Evolving,'' and “Advanced.'' These levels reflect the degree of DEI integration and alignment with business strategy. According to this research, DEI programs can improve an organization's competitiveness, agility, innovation, and brand recognition. The study also shows that, as you might expect, the maturity of your DEI program matters. Because organizations with the most mature programs realize the highest return on investment.

The core principles that ESG emphasizes as important in building DEI maturity are:

DEI strategy should be regularly discussed with employees within the scope of the organization's mission. This provides transparency and builds trust in your organization and its DEI efforts.

The DEI strategy must be co-owned by human resources (HR) and other line-of-business leaders. Of course, HR can help your organization succeed with DEI. Still, the maturity model advocates a collaborative approach that puts DEI at the core of the business and drives responsibility for success across the organization.

Your DEI strategy should evolve over time as your organization progresses. Your organization's DEI strategy can't remain static, as businesses themselves are constantly changing, as are external factors. Understanding the evolving landscape allows for a better targeted approach to your DEI strategy. COVID-19 is a great example of an external stressor that has impacted DEI strategies and goals.

DEI goals should be SMART (specific, measurable, achievable, realistic, and timely). Setting quantifiable goals is essential to success. DEI should be no different than any other business priority, such as profitability or security, where quantifiable goals guide execution.

Mature organizations should take responsibility. Accountability is essential to success. Without accountability from the top, organizations tend to get distracted by other seemingly more pressing business issues.

Empowering employees is the key. The maturity model shows that organizations that don't provide regular training, or only train on a few topics, will prevent their DE&I programs from having a true transformational impact. .

Organizations need to find additional means (besides training, goal setting, and communication) to foster a culture of DEI. The maturity model considers the presence of corporate sponsor affinity groups as a characteristic of DEI leaders.

Once this study was able to isolate organizations that were leaders in DEI, the impact of a well-executed strategy was clear when looking at both the success of DEI strategies in action and their business impact. did.

• 75% of leaders believe that investing in DEI has a very positive impact on the competitiveness of their business. However, only 28% of his early organization agreed with this statement.
• 63% of leaders and 30% of starter organizations attested that their DEI efforts had a pervasive positive impact on agility and innovation. Additionally, 68% had a significant positive impact on brand awareness (64% had a broader impact on recruitment and retention).
• 71% of leaders view DEI ROI very positively, compared to just 24% of early-stage organizations.

Not surprisingly, a mature DEI strategy will improve your organization's diversity numbers.

Leaders recorded a 33% increase in representation compared to the earlier organization in terms of the proportion of managers and new hire members from one or more underrepresented groups. We all know that increasing diversity within an organization takes time and effort. It's much more than just hiring, it's about building an inclusive culture. This is why AWS starts with inclusion, not diversity. Without an inclusive culture, you are pouring water into a leaky bucket. You may be able to hire diverse talent, but you can't retain it.

74% of underrepresented individuals working in leadership organizations were more likely to agree that their organization highly values ​​diversity. This figure dropped to 36% of his early organizational individuals. Additionally, 68% of employees who work in leader organizations and belong to underrepresented groups strongly agree that they feel a sense of belonging in their organization, whereas in early organizations He had 34%.

Beyond the outcomes that respondents directly associated with DEI initiatives, the study also showed a strong positive correlation between DEI program maturity and a variety of positive business outcomes. This is an important finding of the entire study. While a DEI strategy can have positive outcomes for an organization's diverse makeup and inclusive culture, his mature DEI strategy has a tangible, positive impact on the business.

• 71% of leaders report that they typically outperform their competitors in the marketplace. This compares to only 34% for early-stage organizations. On average, leaders enjoy a time-to-market advantage of 4 months.
• Leading organizations reported an average increase in market share of 11.7% over the past 12 months, compared to a 7.7% increase for emerging organizations.
• 36% of leaders report exceeding revenue expectations for the most recent fiscal year by 10% or more, compared to 14% of emerging organizations.

This study is a great first step toward providing real data that leaders can use to advocate for budgets to support DEI initiatives. That said, there is other direct data that we can all understand that points to the risks of not making diversity and inclusion a priority.

Not having a diverse organization can pose several risks to a company's performance, reputation, and innovation. A lack of diversity can lead to a homogeneous culture that stifles creativity, limits perspectives, and reduces opportunities for learning and growth. A lack of diversity can alienate potential customers, partners, and employees who value inclusivity and social responsibility. On the other hand, diverse organizations can benefit from a variety of skills, experiences, and perspectives that can enhance problem-solving, decision-making, and innovation.

Immigration and naturalization have made the U.S. population more diverse and multicultural, with an increasing proportion of racial and ethnic minorities and foreign-born workers. This will be reflected in the structure of every organization over the next five years. But diversity alone is not enough. Inclusion and equity are also essential to enabling talent to thrive in organizations that foster growth, engagement and retention rather than high turnover.

Disclosure: The Heart of Tech is a research and consulting firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this column. The author has no financial relationship with any company mentioned in this column.