Wednesday, 17 June 2020

Diversity & Inclusion: The Time is Now!



By Ramez Lasheen: Managing Consultant, Partner Group at Gallup | Guest Lecturer


Every human life is unique and valuable. Every person brings a unique set of talents, strengths, and skills with them that make the shared human experience far richer, more varied, and more vibrant. This much should be self-evident.

Yet, cities around the globe continue to erupt with anger and protest - protest against persisting injustices, institutional discrimination, and racism. Now, it is important we loudly and repeatedly affirm the ethical and moral imperative of nurturing diversity and inclusion in our cultures.

The moral case should be enough, but, happily, there are other, supporting arguments for diversity and inclusion. For example, Gallup has been researching the workplace for over four decades and has identified that diversity and inclusion are intimately linked with better business outcomes for firms.

In one study, Gallup established that having gender-diverse teams improved financial outcomes for business units in two companies: one, an electronics retailer with more than 500 stores, and the second a restaurant hospitality company with 284 locations. The combination of improved employee engagement and gender diversity resulted in 46% higher revenue in the first company, and 58% increases in net profit in the second. 

Building diverse and inclusive work environments fosters trust between employees and managers and increases their willingness to speak up. This in turn enhances the bond between an employee and their firm and increases their overall engagement. Employees who work in engaged, diverse teams are more inclined to stay with a company compared with employees in less diverse teams.


 Gallup’s analysis of these factors has covered more than 82,000 businesses and divisions, and 1.8 million employees in 230 organizations spanning 49 industries in 73 countries.  This clearly established that higher engagement levels are associated with safer workplaces, lower turnover, lower absenteeism, lower shrinkage, higher quality, higher productivity, and higher profitability[1].

Importantly, diversity without inclusion, is not enough. Teams that were more inclusive, yet less diverse, performed better than teams that are diverse but not inclusive.

What do we mean by diversity and inclusion? Diversity represents the full spectrum of human differences. It often describes demographic factors, such as race, religion, gender, sexual orientation, age, socio-economic status, or physical disability. However, diversity is much more than the visible differences among people.

Many companies choose a broader definition of diversity that also encompasses personal differences such as lifestyles, personality characteristics, family composition, education, or tenure within the company. Academics and professionals acknowledge that these kinds of differences also imply differences in world view, perspective, opinions, and approaches to decision-making, all of which should be considered under the umbrella of diversity.

Inclusion, on the other hand, refers to the extent to which diverse employees are valued, respected, accepted and encouraged to fully participate in an organization of which they are a part. Inclusiveness can be a strategy for using each person’s unique and individual strengths to increase an organization’s productivity, profit, and performance. In inclusive environments, individuals are appreciated for their unique characteristics and therefore feel comfortable sharing their points of view and other aspects of their true and authentic self[2].

            Many organizations now run Diversity and Inclusion (DNI) programs, some for many years. In the US, 55% of workers even strongly agree that their organization has such a program, but 45% of same workers say they experienced some form of discrimination in the previous year[3].

Boardrooms remain dominated by middle-aged, white men. In Germany, according to the AllBright Foundation’s annual report on family owned companies, the typical executive leader is a 55-year-old, white German man with an economics or an engineering background, who was educated in Western Germany[4].

Furthermore, only 14% of senior executive positions in publicly traded companies in Germany are held by women (vs EU average of 17%), and women hold only 30% of management positions in general (vs EU average of 37%)[5]. People with a history of migration (based on current and former citizenship or one parent being a migrant) represent around a quarter of the population in Germany, and yet, only 15%[6] are in management positions, their representation in the higher ranks of firms at leadership levels, leaves much to be desired.

Many diversity and inclusion programs therefore simply aren’t delivering. This led Gallup to develop a framework on diversity and inclusion and to work with organizations to guide them on their transformation journeys. We developed solutions designed to increase the diversity at the source, through Talent Based Hiring. While employed, we help companies foster Strengths based cultures that underscores inclusion and increases engagement. Furthermore, we have assisted companies with cultural transformation programs, aligning their cultures with their core values and their mission and vision statements.

Aside from the positive commercial impact of effective DNI policies, employees who feel they are part of diverse and inclusive workplaces are likely to have more positive overall life experiences. This is not surprising, given that people spend a third of their waking hours at work, and having a good and a stable job correlates positively with a gamut of indicators, starting with basic financial security through to improved mental health and wellbeing.

We also know that a diverse and an inclusive workplace fosters better human interactions, helps tear down prejudices and builds bridges between groups. In the present climate, what could be more important than that.

The issues associated with race, equality, diversity, and inclusion run deep. They are in most cases institutional. They do require a collective social, political, and legislative effort to resolve. But as we cast around for substantial actions to take, companies have a unique opportunity, where their contribution can tangibly improve the lives of many and society at large.

Martin Luther King once said: “The time is always right to do what is right”. And if, somehow, that moral imperative is not enough, making diversity and inclusion an integral part of a company’s DNA is not just good PR, it is also good business.



[1] Gallup Meta Analysis, 2016

[2] Definitions of Diversity and Inclusion are from Gallup Diversity & Inclusion Perspective Paper

 

[3] Gallup Diversity & Inclusion Perspective Paper

[4]  The typical board member in German family owned business is 93% male, 90% White German, born around 1965, 76% educated in Western Germany, 45% Economist, 36% Engineer. AllBright Annual Report, “Die deutschen Familienunternehmen: TRADITIONSREICH UND FRAUENARM” June 2020.

[5] “Only 1 manager out of 3 in the EU is a woman.” Eurostat. EU, March 8, 2019. https://ec.europa.eu/eurostat/documents/2995521/9643473/3-07032019-BP-EN.pdf/e7f12d4b-facb-4d3b-984f-bfea6b39bb72.

[6] Estimate based on 2019 migration figures from the German ministry of migration and refugees, BAMF and the German Economics Institute, DIW, report on leadership on the private sector.

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