Time and time again, organizations are told about the importance of developing an inclusive culture. But, do they understand how to get there?
Despite the fact that research proves that organizations with inclusive cultures are six times more likely to be innovative and able to anticipate trends and disruption in business, and twice as likely to meet or exceed financial targets, only 12 percent of organizations around the world have reached full maturity.
FEI Daily spoke with Stacia Sherman Garr, Vice President, Bersin by Deloitte, about the mistakes organizations make when attempting to address diversity and inclusion, and the steps they can take to do better.
FEI Daily: We know the research demonstrates that inclusive organizations outperform their peers, so why is it such a challenge for many organizations?
Stacia Sherman Garr: It really stems from the historical approach to diversity and inclusion.
If you think about how many organizations have approached it, it’s been focused on compliance. That’s what our research found is still the case in many instances. We find about 40 percent of organizations primarily focus on compliance with legal rules or regulations. That’s one component. I think the second component, is that organizations focus on education. They create a bunch of programs. At least if you’re talking about in the United States, it’s targeting specific people of ethnic backgrounds.
Now, while I think that’s good and our research would show that it’s part of the solution, it won’t actually change how people engage with each other or the expectations within the culture. It really is just a starting point. I think the challenge is that there’s been so much focus on either compliance or on recognizing differences and there hasn’t been a focus on driving an inclusive culture overall throughout the organization. That’s a hard thing because culture shift is a real challenge.
FEI Daily: What are some of the reasons that programs aren’t effective?
Sherman Garr: What we find is that the programs need to be much more about enabling individuals to do something different as a result of the information or activities that they’re participating in. An example would be, for instance, unconscious bias: how to identify it in yourself, how to think through the thought patterns that you have, and how to potentially do something different.
Similarly, one of the most important dimensions that we identified in the survey was that the organizations provide individuals with resources to present their authentic selves. That comes down to, number one, understanding who I am. And, number two, knowing how to represent my authentic self. It isn’t just the presence of awareness, the awareness of a certain holiday for instance, or that people have different backgrounds. That’s all well and good, but I think it really is about how we help people take action so they themselves can help create that culture of inclusivity. That’s a distinction that’s important.
FEI Daily: Why is it so critical for organizations to make diversity and inclusion a key component of their business strategies?
Sherman Garr: A relatively easy approach is to point to research such as ours and say, “We know that in organizations that look like us, big global companies, that more diverse and inclusive organizations tend to be more agile, more innovative, and more likely to hit their financial targets.” I think that’s going to apply to any organization that’s out there.
In terms of the specific things that are happening these days, we know that as organizations become more global we have individuals who are working across different cultures, with different cultural expectations and backgrounds, yet we’re putting them together on teams and expecting them to be highly productive. An awareness of that diversity of background, of thought and experience, and making sure that people have the skills to make everyone feel included, and to make sure the different perspectives are accepted and are valued.
I think the other side of it is that as we’ve seen increased globalization we’ve also seen increased competition for talent. As organizations are digging through, being aware of where unconscious bias might be influencing their hiring process. Or just the fact that their conditional sourcing pools might not be adequate and looking at other types of sourcing pools.
FEI Daily: What can executives do to create an inclusive culture?
Sherman Garr: In our maturity model the next level is around leaders owning diversity and inclusion. The first thing is to recognize that they have a critical role here, that they are responsible for owning this. In many organization they’ll say, “That’s something that HR does, or something our diversity and inclusion group does.”
We’ve also seen that they consider diversity and inclusion when hiring new individuals, making sure that they’re considering people from a variety of backgrounds. That they’re guarding against unconscious bias in the hiring process. Similarly, when we look at internal successions, raises, or promotions, having an awareness of potentially where a bias may be creeping in and calling that out, and making sure that there’s a discussion about it.
The third point would be around driving some level of accountability in the organization: senior leaders talking about the organization, its vision, its purpose, its strategy. Then having regular conversations on how the organization is doing in meeting that strategy, and any strategic measurements that the organization is using as well. Our research shows that effective leaders talk about the role of diversity and inclusion with their employees and how it makes the business stronger.
FEI Daily: Only 12 percent of organizations around the world have reached full maturity – what do we mean by “full maturity” in this case?
Sherman Garr: That’s what we call the inclusive culture. In those organizations, everyone is seen as owning diversity and inclusion. We asked one organization “Who owns diversity and inclusion in this organization?” They said, “Well, that’s a really hard thing to answer because as soon as we bring someone into the organization, from our onboarding forward, they’re told that they’re responsible for creating a diverse inclusive organization as an individual.”
Similarly, the leaders talk about and have examples of how diversity and inclusion is critical to the overall business strategy. These organizations are very clear about what their overall strategic measurements are in terms of understanding their realistic success with diversity and inclusion initiatives. Then they talk very broadly with both leaders as well as employees about how the organization is doing on that. There’s a high degree of accountability. Then, related to that concept of accountability, we tend to see them report into a seat lead executive. Whereas at the other levels of maturity we tend to see it reporting to HR.•