The diversity and inclusion revolution: 8 powerful truths

Most leaders now believe that having a diverse and inclusive culture is important to business success. In fact, two thirds of a recent Deloitte survey of 10,000 global leaders tell us so. But here’s the rub: far fewer know how to achieve that goal.

An exception is Qantas CEO, Alan Joyce. who attributes the spectacular transformation of Qantas to its ability to harness diversity and inclusion. How did it happen? According to Joyce: “We have a very diverse environment and a very inclusive culture,” and those characteristics “got us through the tough times . . . Diversity generated better strategy, better risk management, better debates, [and] better outcomes,” said Joyce.

To give practicality to this insight, and thus close the gap between aspiration and reality, we have distilled eight powerful truths from the Qantas case study as well as our research and work over the past seven years with more than 50 organisations, with a total of more than one million staff.

1. Diversity of thought is the new frontier. We need to look beyond demographic parity (eg gender and race) to the ultimate outcome – diversity of thinking. Diversity of thinking is a wellspring of creativity, enhancing innovation, reducing risks and smoothing the implementation of decisions by creating buy-in and trust. Demographic diversity is not an end in itself, but a proxy for the end game.

2. Diversity without inclusion is not enough. Simply put, diversity without inclusion is worth far less than when the two are combined. In fact, organisations with inclusive cultures are twice as likely to meet or exceed financial targets, three times as likely to high performing and six times as likely to be innovative and agile.

3. Inclusive leaders cast a long shadow. The behaviour of leaders significantly impacts how included employees feel, with the effect even more pronounced for those who identify as part of a marginalised group. And inclusive leadership translates into higher levels of team performance, collaboration and quality decision making.

What differentiates inclusive and exclusive leaders? In essence, open-mindedness, a deep-seated commitment to fairness, the alteration of personal behaviours and organisational practices to eliminate biases, and the careful management of diverse teams. It’s a critical capability but rarely do leadership programs assess and develop inclusive leadership.

4. Middle managers matter. In the context of diversity and inclusion, middle management is an historically underserviced group. While many executives have been afforded time to learn, reflect and debate – middle managers are usually given directives and treated as a single mass. Without the deliberate and sensitive engagement of middle managers, this critical layer will remain a permafrost.

5. Rewire the system to rewire behaviours. Diversity training has become the mainstay of diversity and inclusion interventions. A realistic aim of such training is to raise awareness. The problem is that much more is expected: the elimination of inappropriate conduct, the inculcation of inclusive behaviours and improvements in an organisation’s diversity profile. To achieve those goals, organisations need to rewire policies, processes and practices across the full employment lifecycle, ie from recruitment to exit.

6. Tangible goals make ambitions real. Nothing ignites greater debate than the setting of targets and quotas. Should they be mandated? What should be the consequences of achievement or failure (Remuneration? Promotion?). Without appropriately crafted tangible goals for both diversity and inclusion, ambitions will remain ephemeral wishes.

7. Match the inside and the outside. Customer diversity has often been largely overlooked, with the lion’s share of attention devoted to employee diversity. And when customer segmentation is considered, it is more in terms of a customer’s financial profile than who customers are as diverse individuals. As a consequence, services and products often reflect a stereotypical view of the customer and fail to recognise the pulling power of messages supporting equality.

8. Perform a culture reset, not a ‘tick-the- box’ program. The final truth is the most sweeping and underpins all seven previous truths: Most organizations will need to transform their cultures to become fully inclusive. Whilst an overwhelming majority of organizations aspire to have an “inclusive” culture in the future, Deloitte’s survey results have found that actual maturity levels are very low.

There is a groundswell of global energy directed toward the creation of workplaces that are more diverse and inclusive. But some communities have become mired in divisive debates about equality (e.g. LGBTQ, race and religion). Workplaces have emerged as a venue in which these disparate pressures have been manifested and discussed. Caught in the middle, workplace leaders around the world lament feeling ill-equipped to navigate these swirling waters.

To address these eight powerful truths, we propose seven powerful actions:

  1. Recognize that progress will take a culture reset.
  2. Create shared purpose and meaning by broadening the narrative to diversity of thinking and inclusion.
  3. Build inclusive leadership capabilities.
  4. Take middle managers on the journey.
  5. Nudge behaviour change by rewiring processes and practices.
  6. Strengthen accountability, recognition, and rewards.
  7. Pay attention to diverse employees and customers.

At Deloitte, we believe all voices deserve to be heard. Watch our video, Many voices, one song: https://youtu.be/YDQ4yluaiGQ

*This article was originally published in AFR Boss Magazine under the title Diversity benefits need an inclusive approach


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