More than half of corporate executives now see diversity, equity, and inclusion as contributing to business success – that’s up from 22% three years ago, according to Heidrick & Struggles’ international survey of 420 executives.
Boards also have a much sharper understanding of how DEI connects with strategy and human capital issues than they did just a few years ago, according to a 2022 National Association of Corporate Directors survey of its members.
Clearly, fostering and sustaining a strong DEI culture has become imperative for many organizations.
Here are three questions to help you assess where you stand and give you actionable tips for how you can incorporate DEI into your team and organization’s culture.
What Are Our Definitions For Diversity, Equity And Inclusion?
Only 20% of companies can clearly and fully define “diversity,” “equity,” and “inclusion,” according to the Heidrick & Struggles survey. The relevance and meaning of diversity dimensions can vary widely among the different places where a firm operates and across industries.
Religious diversity in Singapore is more distinctive than in Morocco, for example. And while tech companies struggle to attract women and people of color, energy companies contend with an aging workforce.
Given that different organizations prioritize varying aspects of DEI, clarity around these terms is essential. After all, how can employees help their organizations achieve strategic DEI objectives, when their meaning is elusive?
Actionable tip: Have your team regularly measure how well these terms are understood in their organizations and report back to the group. Regular assessments and reporting keep DEI on the agenda and promote a culture of learning and adaptation. They also ensure your team’s DEI understanding and awareness evolves with the times.
What Is DEI’s Strategic Potential?
DEI is most frequently perceived as addressing strategic talent issues. United Airlines’ commitment to training more women and people of color to become pilots, for example, addresses a looming talent shortage as aging, white, male pilots are expected to retire in large numbers.
But companies that are most effective at leveraging their diversity have understood that DEI initiatives can do more than win the war for talent. DEI initiatives can fuel learning, change, and innovation.
DEI is central to innovation at companies like MattelMAT -0.9% and REI. Based on a stronger understanding of structural inequality, banks like Citi have successfully re-conceived their financial products and services.
Because DEI tends to primarily be viewed through a talent lens, it’s worth spending some time on the question of whether and how DEI might have a strategic impact if leveraged to generate new products, develop new work methods, create barriers against new entrants, or open new external collaborations.
Actionable tip: Disaggregate data not just in talent analysis, but also in workplace safety reports, service offerings, product harm analyses, and customer satisfaction assessments. This approach could help pinpoint disparities and opportunities that might be concealed in aggregated data. Additionally, when employees and stakeholders see that an organization is committed to collecting and using disaggregated data, it can further encourage people from diverse backgrounds to feel valued, heard, and included.
How Are We Role-Modeling Inclusive Leadership?
Role modeling by senior executives remains one of the most powerful ways to infuse culture in an organization.
Employees learn from observing those they look up to and can identify with, like their bosses and unit leaders. Top executives’ status and seniority make them especially likely role models to their direct reports, and this effect can trickle down all the way to front line employees. So, when executive team members visibly demonstrate personal commitment to DEI, their behaviors can help build a DEI-focused culture.
Yet, only 30% of senior leaders, on average, model inclusive leadership, in contrast to the 57% of executives in DEI-forward firms, according to the Heidrick & Struggles report.
Actionable tip: Leaders could consider sharing their own journey of growth and learning around DEI. Personal narratives foster connections, enhance inclusivity, and exemplify the process of acquiring knowledge. They also have the benefit of cultivating trust and create a safe environment for discussing challenging or sensitive subjects that might otherwise be avoided.
These three questions can not only play a pivotal role in strengthening an organization’s DEI culture; they can also serve as team-building exercise. The process of evaluating one’s understanding of DEI principles promotes open discussions, knowledge sharing, and alignment within the team. Reshaping and harmonizing strategies requires closely working together. Modeling inclusive leadership and sharing personal DEI learning journeys reinforces trust and psychological safety.
Executives aiming to enhance their firm’s DEI culture with these questions on DEI and strategy may find that they also strengthen their team’s culture.
by Corinne Post
On this episode of The McKinsey Podcast, McKinsey senior partners Alexis Krivkovich and Lareina Yee talk with global editorial director Lucia Rahilly about the 2023 Women in the Workplace report—and specifically, the newest research on where progress is happening, where it’s not, and what leaders need to do differently to accelerate the pace of change.
Everyone agrees that leaders can’t reach the top without executive presence — but pinning down a definition is much more daunting. In fact, the fuzzy nature of the phrase is exactly why it’s often used as a fig leaf to keep women and other marginalized people out of plum roles.
Inclusive language is a way of communicating that avoids expressions and words that may be considered discriminatory or exclusive. It aims to embrace diversity and promote a sense of belonging for all individuals, regardless of their race, gender, sexual orientation, ability or any other characteristic.