What’s The Big Deal With Diversity?
Excited and nervous, I entered the hotel lobby to check in for the first big corporate conference of my career. When I was in college, networking was emphasized as one of the most important things I could do as a business person. Conferences and events would allow me to network, meet people, and make new connections. I was excited to gain new perspectives from people in different professions with diverse lifestyles and ideas. I checked into my hotel room and started to get ready for the first keynote of the conference.
My alarm went off letting me know it was time to head downstairs and mingle with the other attendees of the conference. I took one last look in the mirror, gathered my business cards to hand out, and headed down to the conference hall ready to network. When I walked in, I was greeted by a much different group of people than I expected. Here I was, a young woman, surrounded by what looked like a few hundred middle aged white men. I knew that this was expected in the corporate world, to a degree. But I thought I would be surrounded by a more diverse group of individuals. There were people from all over the country and the world here, so why did everyone look the same?
I wasn’t going to judge a book by it’s cover (or a room by first glance), so I began to introduce myself to some of the people in the room and get to know them. There were people of high caliber who had a wealth of knowledge and advice to share with me. I met a lot of great people that day and learned a lot of things that would help me in the future of my career. But when I went back up to my room that night and began processing my day, I still felt uneasy about the monotony of the room.
Something Isn’t Right Here…
The next day, I went down to the conference hall to continue my networking and attend more sessions and keynotes. I took notes on each session, trying to gain as much knowledge as I could in the short time of the conference. However, I noticed myself taking notes on more than just the information from the sessions. Who were the speakers? What were their backgrounds? How did they get to where they are, and what influenced them along the way? That uneasy feeling I got the first day only grew bigger as I attended more sessions. I went through all my notes afterwards and it turns out that 80% of the speakers that I saw at the conference were white males. I needed to know why that was. I wondered if it was the industry I was in, that specific conference, or if the corporate world in general was really lacking diversity that much.
What’s The Problem?
After returning home, I couldn’t stop thinking about what I noticed. I dug in further and found that 96% of all Fortune 100 companies promote diversity efforts through mission and value statements on their websites (1). These statements usually talk about the importance of diversity in the workforce and can include metrics on the makeup of the workforce. Some companies will show awards or public recognition of diversity and may include internal efforts such as employee resource groups or councils. Employee Resource Groups, or ERGs, are groups within the company that provide support, education, advocacy, mentoring and more.
There is no doubt that there is effort being made in the diversity and inclusion space. American Express promotes that women comprise over 50% of their global workforce (1). Apple states that 53% of new hires in the US are from historically underrepresented groups including women and people who identify as Black, Hispanic, Native American, or Native Hawaiian (2). Going into work everyday, I was surrounded by people from all backgrounds, genders, and ethnicities. The problem isn’t diversity in the workplace or the employee workforce. The problem is diversity in the leadership of these companies. There is a lack of tangible proof that the diversity and inclusion efforts companies are implementing are making a difference in corporate leadership positions.
Looking deeper into the leadership and C-suites of Fortune 100 companies, only 25% of total C-suite positions are held by women. Only seven out of the hundred companies have a female CEO and nine out of the hundred have no women in their C-suite at all (1). The statistics are even more grim for racial and ethnic diversity. Racially diverse executives make up only 16% of total C-suite positions and 26 companies have no racially diverse executives in their C-suite at all. 84% of Fortune 100 CEOs are white (1). Clearly, diversity is an issue in the C-suites of top organizations.
Does Any Of This Really Matter Though?
Yes! Diversity and inclusion isn’t just something companies need to have for vanity’s sake. Diversity and inclusion positively impacts the success of a company and their bottom line. Data suggests that diversity correlates with better financial performance. A study done by Catalyst showed that higher representation of women in C-suite positions results in 34% greater returns to shareholders (3). A study done by McKinsey & Company showed that companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above national industry means. They also found that for every 10% increase in racial and ethnic diversity on senior-executive teams, earnings before interest and taxes rise 0.8% (4). Their research shows a clear linear relationship between racial and ethnic diversity and better financial performance.
It’s not all about the money either. Diversity and inclusion has a positive impact on many aspects of organizational performance. For one, it heightens employee satisfaction within companies which can, in turn, reduce employee turnover. Having a more diverse representation of people in the workforce fosters positive attitudes and behaviors in employees. A larger presence of minority group members in a workplace boosts other minority group member’s confidence and self esteem. Allies are also extremely important when looking at employee satisfaction. Someone in a minority group that knows they will be supported and accepted for who they are in the workplace increases their quality of life. A study done by the Center for Talent Innovation found that 24% of LGBTQ+ workers credit their decision to come out professionally to allies in the workplace (5). The Human Rights Campaign Foundation found that 1 in 4 LGBTQ+ workers have stayed in a job primarily because they are very accepting. They also found that 1 in 10 LGBTQ+ workers have left a job because they felt the environment was not accepting of them (6). Seeing real life action and acceptance in the workplace is more effective than just implementing a non discrimination policy.
So Diversity Works, Now What?
Diversity and inclusion is certainly an important topic that affects all businesses and there is plenty of proof to show that diversity can positively impact a business. But how do we implement this diversity to get to the positive impact? Adding a statement to the company website or implementing a non discrimination policy will only do so much. We need to take real action if we want to make a difference in the workplace, especially if we want to penetrate the leadership level of large companies and inject diversity into the C-suites. There are a few things that individuals and companies can start with to create more diversity and inclusion in the workplace:
- Internal Education
The first step in a well rounded diversity and inclusion plan is effective education. While most companies already have a diversity training program in place, they aren’t necessarily effective. Boston Consulting Group did a study and found that 89% of respondents said their company has a diversity program in place, yet only 27% said that they actually benefited from the program (8). Ineffective programs waste money, bandwidth, and time.
One way to increase the effectiveness of a diversity program is to make it optional for employees. This may seem counterintuitive but it works. People often respond to mandatory courses with resistance and don’t like to be pressured to feel or think a certain way. By making education programs optional while providing incentives to those that complete it, it allows the employee to feel like the choice was theirs. It is also important to make sure the education is not a one time training session. One time measures in isolation often don’t make a lasting impact and fail to change the underlying culture at a company.
“becoming anti-racist and creating an anti-bias lens is like the gym. It’s a lifetime commitment of training and dedication which builds your strength, endurance, and changes your body and mind.” — Christina Blacken
2. Tangible Action
Education without action helps no one. In order to make a real difference in the workplace, we must put our thoughts into actions. Create a culture in the workplace that employees want to be a part of everyday. While businesses can’t always give a day off to employees for every holiday, recognition of important dates from all cultures and religions, such as Kwanzaa, Eid-Al-Fidr, and Juneteenth, makes employees feel like they matter and allows them to celebrate their culture and authentic selves. Hosting events or giving back during times like Black History Month, Pride Month, or Martin Luther King Jr. Day is another way to celebrate employees from all backgrounds.
On a smaller scale, Employee Resource Groups (ERGs) are a great asset for employees. ERGs are centered around a specific idea or group of people such as women, people with disabilities, the LGBTQ+ community, veterans, etc. ERGs allow people to express themselves and feel heard in a safe environment and also provide support and professional development for employees. Whatever actions an organization decides to take, make sure that they are long lasting actions that continue to increase culture over time.
3. Real Accountability
In order to create lasting change in the workplace, companies must be held accountable. Creating diversity programs without measuring their success or impact leads to wasted resources and little change. The first step is to establish clear goals and metrics and start to monitor their progress. Establish time periods (ex: monthly, quarterly, yearly) where these metrics and existing policies and programs are reviewed. Reevaluate what is working and what isn’t working and make changes.
In her TEDTalk, Janet Stovall creates a great analogy for this:
Think about this: when salespeople forget what they’re doing and don’t come up with their numbers, what do we do? We give them a little time, maybe we give them some training. But then if they don’t hit those numbers eventually, we fire them.
If a product isn’t selling or someone isn’t doing well at their job, changes are made and ideas are reevaluated. Companies should be doing the same thing with their diversity programs. This is also a time when companies should be surveying their employees. Metrics and data can only show so much, but talking to your employees will give you first hand accounts of what works and doesn’t. Don’t waste valuable resources on programs that your employees say are ineffective. Last but not least, hold leaders and managers responsible for their decisions and be transparent with your employees about the findings.
The topic of diversity and inclusion isn’t new to most people. What is new is how we approach diversity and inclusion. The more that we talk about these topics and bring them into our daily lives, the more positive change we will see. Gone are the days of empty non-discrimination policies and boring, once-a-year online trainings. It is time for real progress and change to be made and it starts with our leaders.
Sources
- Larcker, David F. and Tayan, Brian, Diversity in the C-Suite: The Dismal State of Diversity Among Fortune 100 Senior Executives (April 1, 2020). Rock Center for Corporate Governance at Stanford University Closer Look Series: Topics, Issues and Controversies in Corporate Governance No. CGRP-82, Available at SSRN: https://ssrn.com/abstract=3587498
- Inclusion & diversity. (2021). Retrieved February 16, 2021, from https://www.apple.com/diversity/
- The Bottom Line: Connecting Corporate Performance and Gender_Diversity (Rep.). (2004). Catalyst. doi:https://www.catalyst.org/wp-content/uploads/2019/01/The_Bottom_Line_Connecting_Corporate_Performance_and_Gender_Diversity.pdf
- Hunt, V., Layton, D., & Prince, S. (2015). Diversity Matters (Rep.). Mckinsey & Company. doi:https://www.mckinsey.com/~/media/mckinsey/business%20functions/organization/our%20insights/why%20diversity%20matters/diversity%20matters.pdf
- Hewlett, S., Sears, T., Sumberg, K., & Fargnoli, C. (n.d.). The Power of “Out” 2.0: LGBT in the Workplace (Rep.). The Center for Talent Innovation. doi:https://coqual.org/reports/the-power-of-out-2-0/
- A Workplace Divided: Understanding the Climate for LGBTQ Workers Nationwide (Rep.). (2018). Human Rights Campaign Foundation. doi:https://hrc-prod-requests.s3-us-west-2.amazonaws.com/files/assets/resources/AWorkplaceDivided-2018.pdf?mtime=20200713131850&focal=none
- Williams, Joan C., et al. “Why Diversity Programs Fail.” Harvard Business Review, 14 Sept. 2020, hbr.org/2016/07/why-diversity-programs-fail.
- Cuellar, Marjolein, et al. “Proven Measures and Hidden Gems for Improving Gender Diversity.” BCG Global, BCG Global, 8 Jan. 2021, www.bcg.com/publications/2017/people-organization-behavior-culture-proven-measures-hidden-gems-improving-gender-diversity.
