Changes in the workforce and society have transformed the talent landscape, making inclusion a true business imperative.
A traditional view of diversity and inclusion (D&I) is to be “equally accepting and integrating individuals of all genders, races, ethnicities, religions and sexual orientations,” as Drs. Christie Smith and Stephanie Turner state in their 2016 report, The Radical Transformation of Diversity and Inclusion: The Millennial Influence. While this perspective laid the foundation for building more diverse workplaces, the vision for what constitutes D&I is changing.
New research indicates that an inclusive culture “leverages every individual’s passion, commitment and innovation, and elevates employee engagement, empowerment and authenticity.” The concept of inclusion means embracing and encouraging diverse points of view and experiences as much as it does supporting demographic diversity. This vision enables organizations to leverage the unique insights of their employees and potentially propel their business forward.
Why Does Inclusion Matter?
Workforce demographics are changing, and organizations must find ways to harness the potential of every employee. Millennials are on track to represent one of the largest demographic groups in the workplace, and they are rapidly rising through the management ranks into senior leadership positions. In stark contrast to previous generations, Millennials place high value on a diverse and socially minded workplace. According to a 2016 report from the Deloitte University Leadership Center for Inclusion, 83 percent of Millennials surveyed said they are actively engaged when they believe the organization fosters an inclusive culture, while two out of three say their organization’s purpose is the reason they chose to work there.
Millennials, however, are only part of the demographic mix. As economic pressures compel Baby Boomers to delay retirement, and longer life spans create the potential for people to stay in the workforce longer, organizations are beginning to face an aging workforce. Additionally, women, regardless of their generation, comprise 46.8 percent of the U.S. labor force (49.6 percent globally) and 51.5 percent of U.S. management, professional and related positions (“Statistical Overview of Women in the Workforce,” Catalyst 2016). Finally, the global nature of business and preponderance of organizations that consider themselves global entities make religious, gender, generational and other types of diversity a business reality.
A Tool for Business Success
Inclusion isn’t just the right thing to do—it’s the smart thing to do. In fact, inclusion can lead to better business performance. In a Bersin by Deloitte, Deloitte Consulting LLP study, the highest performers among 450 companies studied considered inclusion a hallmark of their talent strategy. Among their achievements: 2.3 times higher cash flow per employee over a three-year period, 1.7 times greater likelihood to be innovation leaders in their market, and 1.8 times greater likelihood to be change-ready.
Other organizations have realized similar positive results, including:
- 15 times increased sales revenue through activating a D&I strategy;
- 42 percent increased team collaboration through developing inclusive leaders that build an inclusive culture;
- 31 percent increased responsiveness to customer needs through increasing scale of new insights and guarding against groupthink; and
- 83 percent increased ability to innovate through identifying the right employees to tackle pressing problems.
How do you build a more inclusive culture? Deloitte Consulting LLP has developed a values-based approach to unleashing human potential in an organization. This approach starts with your organization’s stated values, then looks at how those values drive a culture, how employees connect to those values through that culture, and ultimately, how you leverage six “activators” to help unleash human potential.
First Things First: Consistency Is Key
A key principle of this values-based model is that your “outside” should match your “inside.” In other words, the values you state and promote externally in the marketplace should match the experience of your people internally. If they don’t, that dissonance can erode the culture and harm your ability to achieve business results.
Given that premise, there are six activators—three internal and three external—that are critical to enabling inclusion in an organization. Internal “core” activators, including leadership, culture and analytics, represent the “insides” of an organization:
Leadership looks at how your leaders “show up” in their behaviors and interactions with employees, including how they hire, promote and engage with them day to day. Leadership is influenced by the underlying leadership competency model, leadership development programs and performance management.
Culture is the organizational water we all swim in. This activator looks at what you’re doing to create a culture that is truly inclusive, one that draws from the diverse backgrounds, experiences and demographics of your people, both the seen and unseen. And it considers how that inclusive culture in turn drives innovation, commitment, engagement and productivity. Culture is influenced by the employee experience you create through learning and development, benefits offerings, performance management and other core programs.
Analytics is about driving accountability for inclusion at all levels of the organization. This includes two major components. First, behavioral changes happen when you measure them. Inclusion analytics should combine a set of quantitative and qualitative measures that link inclusion to your business strategy, and then be transparent across the organization to show how you are moving the needle on inclusion. Second, accountability is driven through the tools and programs you have in place that require and incentivize employees, managers and leaders to be inclusive and walk the talk.
How do you know if your inclusion efforts are working? One way is to look for results in terms of your organization’s unique business outcomes. The overarching inclusion value chain leading to those outcomes might look like the graphic above.
Measurement along each link of the value chain lets you gauge the effectiveness of the inclusion strategy both within your organization and in your market.
External “differentiating” activators—including customers, brand, and community and partnership—make up an organization’s public “face” and should align with the internal values your company promotes.
Customer diversity, like employee diversity, can help your business innovate and grow. It considers how you engage new and diverse customer populations, not only in the products and services you offer, but also in how you develop those products and services.
Brand is often the most obvious reflection of your company’s values in the marketplace. This encompasses not only how you market and represent yourself visually, but also how you talk about your values, how you engage in social media, and how customers and employees talk about you.
Community & Partnership looks at how the corporate partnerships you have invested in match your stated values as an organization. This includes things like supplier diversity, community investments, corporate social responsibility activities and the like.
Together, these six activators present a holistic approach to inclusion centered on your organization’s values. The world we live in is changing rapidly, bringing work, workplaces and the workforce along with it. What is your organization doing to adapt and thrive? Building a diverse, inclusive organization is a means to that end: a way to attract highly qualified people and free them to do their best work, so both they and your business can prosper. iBi
Kristen Puchek is a leader in Deloitte Consulting LLP’s Human Capital practice, specializing in diversity & inclusion, organization and talent strategies. “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. See www.deloitte.com/us/about for a detailed description of Deloitte's legal structure. Certain services may not be available to attest clients under the rules and regulations of public accounting.