In the last year, there has been a large uptick in the number of companies that have exuded their intention to build more diverse and inclusive teams and workplaces. The unfortunate reality is much of this action has been spurred by racial violence, particularly the murders of George Floyd and Breonna Taylor by police officers last summer.
“It’s hard for me to think of movement, any movement, that has not been accelerated based on tragedy,” Michael Bush, CEO of Great Place to Work, says. “I wish people could do it just based on equality and equity and treatment of human beings, but it just hasn’t been true.”
Bush is uniquely qualified to assess not only the current rise in focus on diversity, equity and inclusion in the corporate world but on how to best incorporate those values effectively in an organization. Bush joined Great Place to Work in 2014 and eventually ended up buying the company and turning it around financially. As he took on a greater leadership role, Bush noticed that his own company was labeling companies as great places to work without incorporating an emphasis on more diverse and inclusive workforces.
“So, we changed all of our algorithms, the way that we rank companies, the way we analyze the employee experience by using demographic comparisons and rewarding companies that had a consistent experience across all demographic groups,” Bush says.
Diversity Leads to Improvement
Of course, better incorporating metrics of workplace culture is not just checking a box for Great Place to Work, as its research has consistently shown that more diverse teams simply outperform less diverse teams, with the gap only widening, according to Bush.
“Diversity drives innovation,” Bush says. “Companies need the help of all employees to make sure they’re feeling safe and that they’re value[d] and are going to be needed to help the company innovate. Frankly, I have not met a company yet that has the diversity of thought and lived experiences that it needs to create the innovation that diversity, equity, inclusion and belonging will bring.”
More diverse work environments not only create more innovative thinking and foster a more supportive culture, they also create more buy-in from employees, which ultimately leads to better performance.
“When you have a company full of people who are trusted, cared for, respected and valued, they are going to give 100% to your company,” Bush says. “That’s why companies who have a culture closer to that outperform those who [don’t].”
Having a larger range of people within the employee base, including in leadership roles, also makes for better problem solving.
“Not only do diverse teams have better decision-making capabilities, but research shows that they perform better as well,” Manar Morales, president and CEO of the Diversity & Flexibility Alliance, says.
Morales, who was an employment litigator before starting the DFA, is constantly looking at the intersection between workplace flexibility and its impact on diversity, and advises companies on how they can better perform in both areas. That means doing more than creating marketing campaigns and press releases.
“Organizations need to look beyond mission statements that include diversity and inclusion and make authentic and tangible commitments towards improvement,” Morales says. “I advise leaders to peel back the layers and ask, ‘Well, what exactly are we doing to improve?’ We need to see more concrete actions towards creating cultures that support diversity and inclusivity.”
Such a lack of introspection and action can be harmful during all parts of the business cycle but particularly in times of distress. According to a 2019 research report from Great Place to Work, “historically marginalized groups are often first to feel the effects of a business running into trouble,” with restructuring activities often creating a wide schism in experience between different demographics. This gap can further exacerbate the challenges of a downturn for a company. According to Great Place to Work, “companies with consistently inclusive workplaces thrived before, during and after the Great Recession, earning a 4x annualized return” between 2006 and 2014.
As the U.S. economy continues to grapple with the negative effects of the COVID-19 pandemic, being able to traverse a recession will be more important than ever. But companies also need to have a longer-term perspective. According to both Bush and Morales, what companies do (or don’t do) about improving DE&I now will greatly influence who will want to work for and with them in the years to come.
Building and Maintaining DE&I
Despite the evidence supporting the need for more diverse workforces, many companies struggle to actually do more than state their intention to improve. However, that doesn’t mean there aren’t concrete strategies that can be utilized to address the problem. To begin with, being purpose-driven is critical.
“These purpose-driven companies, they actually feel like ‘better for the world’ matters and that they can’t be successful in the long term without addressing some of the complex issues that society faces,” Bush says. “You can’t say you care about your employees and not be taking clear action to minimize the negative impact that your firm might be having on the environment. You can’t ignore social justice issues if you care about your people as people. If they are just ‘employees,’ then you can ignore these external factors. But, if they are just ‘employees,’ good luck with your inclusion and belonging effort.”
Much of the responsibility for this must fall on leadership. Making DE&I initiatives a leadership imperative avoids isolating such actions to only certain parts of a company.
“It should not be siloed. It needs to be really integrated into the culture of the company,” Morales says, suggesting that DE&I should be incorporated into bonus decisions in order to tie it to everyone’s success.
Since leaders need to take on a key role in promoting DE&I at all times, they must be even more active in times of distress. That means avoiding the last in, first out policies that can more disproportionately affect employees from historically marginalized groups, according to Bush, but it also means keeping a people-first approach overall.
“If you’ve made gains in diversity and inclusion up until 2019, it’s [really] easy [for] one reduction in force to erase all those gains,” Bush says, noting that companies must not look only at what’s needed to get through the recession but what will be needed to thrive on the other side as well.
In the same vein, as Morales points out, many companies claim that they recruit the best talent, but that can’t be the case if they limit their recruiting scope.
“If you say as a company, we attract top talent, that top talent is diverse. You can’t say we attract top talent if you’re only attracting white men. That’s only a portion of the talent pool,” Morales says.
What Gets in the Way
Part of improving is identifying what’s getting in the way, and there are many factors that hold companies back. Unconscious and implicit biases both play a major role and often can be further entrenched when leadership, rather than really examining the reality, refuses to acknowledge or address its shortcomings and becomes defensive.
“To write [unconscious bias] off and just say, ‘Oh well, we all have it, therefore we don’t have to care about it,’ is not the response that we want to see. It’s that we all have it, therefore, we have an obligation to do something about it,” Morales says.
According to Bush, this also ties into the unfortunate reality that some people choose to believe things that aren’t true. For example, he says some leaders will argue that improving diversity and inclusion threatens profitability, even if the evidence doesn’t support such a claim.
“There are some leaders and managers who are creating an inferior, unfair experience for people in certain demographic groups, some consistently across all demographic groups, and you have to work with those leaders … and determine for yourself if they want to change.” Bush says. “And if they don’t want to change, you should get them out of the company.”
That last part is often the most difficult, as accountability is usually a key missing ingredient, according to Morales.
“Where companies fail is they don’t build in any accountability,” Morales says. “Everybody within the organization should be accountable to advancing diversity and inclusion within the organization.”
Creating that accountability has to be based on actual measurements of success and not just a look at peer companies, Morales says, noting that when companies just evaluate themselves against their competitors, they fail to move the needle since most industries are falling short. This causes companies to focus on sending out statements and enacting initiatives aimed externally rather than really examining how their internal structures contribute to the structural inequities of society.
For companies dedicated to really improving, asking questions about their own employees’ experiences and examining their own processes is the first step to making actual change. That means paying attention to when bias creeps in and evaluating the processes behind employee evaluation and advancement, according to Morales, who says it is particularly important to get feedback on the experience of underrepresented groups.
Asking questions is not enough, however, as companies need to turn the information they gather into action and continually measure progress in addressing the problems that are uncovered. The metrics will be different for each company and influenced largely by how intentional an organization is with its efforts. That means avoiding check-the-box conversations like unconscious bias trainings as the sole strategy for improvement.
“I remain hopeful that progress will continue. I wouldn’t do the work that I do if I didn’t think that progress could happen … but change has to be intentional,” Morales says. “We’ll start to see that change happening as companies move to investing more and understanding that diversity and inclusion can’t just be a statement you put on your website.”
Phil Neuffer is managing editor of ABF Journal.