Diversity and Inclusion (D&I) is no longer about filling a quota. Today, D&I is recognized as a key way to boost profits and increase innovation. It simply makes business sense.
McKinsey’s 2015 Diversity Matters report revealed a strong correlation between diversity and financial performance. According to the findings, companies in the top quartile for ethnic and racial diversity are 35% more likely to perform above the industry median compared to those in the bottom quartile, while gender-heterogeneous companies outperform by 15%.
And, in the U.S., every 10% increase in racial and ethnic diversity among senior executives leads to a 0.8% increase in EBIT (earnings before interest and taxes).
Top of the Priority List
Given this potential to impact business, it’s not surprising that CEOs are taking notice. The 2017 Deloitte Human Capital Trends survey found that the number of executives citing diversity as a top priority had jumped by 32% since 2014. This is crucial because although HR plays a key role in implementing D&I changes, long term success requires a cultural and strategic shift.
Like any company-wide push, prioritizing diversity means securing senior buy-in, pinpointing clear objectives, setting targets and measuring results. But in addition to jumping through standard management hoops, there are some specific ways to build successful D&I programs:
Banish Brain Bias
While overt bias against individuals or groups is generally easy to spot, people are sometimes unaware of their own unconscious bias, for example, unwittingly hiring people who are like themselves.
While educating people about unconscious bias and helping them identify it is an obvious first step, it’s not enough.
To overcome bias, organizations must move away from what psychologists call System 1 thinking, where decisions are emotional, instinctive, subconscious and based on gut feelings. Instead, what’s required is System 2 thinking, which is rational, deliberate, rules-based and takes more work.
From a recruitment standpoint, this means having a structured format for interviews during which all candidates are asked similar questions, followed by a an analysis process.
Turn to Technology
To influence change, organizations need to be able assess where they are today and measure results. Earlier in November, for example, Apple shared an update on its efforts with the release of its Diversity and Inclusion Report, which revealed that between July 2016 and July 2017, half of all new hires at the company were from “historically underrepresented groups in tech.” People analytics are a vital tool for spotting these types of improvements, as well as identifying problem areas.
By analyzing data throughout the recruitment process, organizations can identify where people are underrepresented, and plug those holes with new hires. The same principle holds true for all areas of talent management — analytics can uncover patterns in gender or racial bias in performance reviews, compensation and rewards.
Lead From the Front
Deloitte identified six traits that epitomize inclusive leaders: courage, cognizance of bias, curiosity, cultural intelligence, collaboration and commitment. Still, it’s up to HR to recognize and foster these traits.
It’s important to recognize that diversity encompasses differences in cognitive and emotional make-up as well as race, color, sex and sexuality. When it comes to nurturing future leaders, today’s leaders need to resist looking for carbon-copies of themselves. For example, leaders need to be self-aware of their own work style, and accept that they need to collaborate with people that work differently to create a better team.
While D&I is increasingly getting acknowledged as a good business practice, even those making it a strategic priority have a long way to go. The key is ensuring that D&I becomes a standard part of leadership development, and is seen as a core leadership skill.
This article originally appeared on ReWork, a publication exploring the future of work.