Inclusion: Can your business afford not to be inclusive?

Posted 07 September 2021 by
Kevin Wood

Building a strategy for inclusion and diversity seems to be on every organization’s to-do list. But why?

Here’s a look at the key business benefits of inclusion and why it matters to everyone – employees, colleagues, and customers.

We’ll also show why organizations need to focus on inclusion, not just diversity. But first, let’s start with some definitions.

What do we mean by diversity and inclusion (D&I)?

Diversity means difference. Race, ethnicity, gender, sexual orientation, age, and cultural background are examples of diversity. For a group of people to be diverse, difference must be present.

Inclusion is the welcoming of difference. It enables and encourages full contribution from diverse people—it values the differences that diverse people bring. Inclusion puts diversity into practice, it makes diversity work. It’s the difference between paying lip service (to diversity) and committing it to action. In an inclusive culture, people can be their true authentic selves without fear of judgement.

What’s the business case for inclusion?

Research provides compelling reasons why inclusion improves organizational performance. Here are five of them:

Improved financial performance

Research by McKinsey & Company (How Diversity and Inclusion Matters, 2020) shows that companies ranking in the top quartile for gender diversity on their executive teams are 25% more likely to have above-average profits than those in the lowest quartile.

They also found that companies in the top quarter for ethnic diversity on their executive teams are 36% more likely to have above-average profits than those in the lowest quarter. McKinsey does emphasize that this research shows correlation rather than causation, but the correlations are significant.

The author of Which Two Heads Are Better Than One?, Juliet Rourke, found numerous benefits to inclusive cultures. Her research concludes that organizations with inclusive cultures are:

2X as likely to match or exceed their financial targets
3X more likely to be high performing
6X more likely to be agile and innovative
8X more likely to achieve better business outcomes

Better decision-making

Diverse groups bring more perspectives to the decision-making process.
Complex problems typically require six approaches, which are evidence, options, outcomes, people, process, and risk (Deloitte 2021). But none of us are equally good at all of them. So, including a range of people with a diversity of approaches covers those different areas.

In the MBTI^® personality framework, one of the preference pairs describes how people make decisions. Some prefer objectivity and logic (Thinking preference). Others prefer a values-driven approach, which considers personal values and/or people’s circumstances (Feeling preference).

Organizational leaders tend to be Thinking types, so you can see how some perspectives won’t be included. It might not be intentional, but it’s the way that many organizational cultures currently operate.

Thriving employees

Inclusion makes diversity work. Inclusion means difference (diversity) is both invited and heard.

Without inclusion, people feel like they don’t belong, or that their unique contribution is not known, heard, or recognized.

And without belonging, the potential to flourish is diminished. When inclusion is in place, everyone feels accepted not just for what they do but how they do it, too. They’re accepted for who they are. This might be intangible, but a sense of belonging contributes to higher employee performance, satisfaction, and well-being.

Higher retention rates and more talent hires

Do you know what millennials think about D&I and job selection?

PricewaterhouseCoopers does.

In their 2017 research, 80% of millennials said a company’s D&I policy is an important factor in considering a job offer. Ziprecruiter (2019) found that organizational diversity efforts affected 86% of millennial and Generation X employees’ decisions to work there.

When people take a job, they want to join companies that hold similar values to the values they hold personally. This affects both the available talent pool for recruitment and retention rates. Being without a D&I strategy, or getting it wrong, can have a negative effect on a large proportion of our largest workforce demographic.

Social expectation

The social justice movements that have recently taken hold have gained mass, momentum, and visibility. More organizations now see that too many people are excluded from many areas of society, and that bias is embedded in many systems and processes.

The social argument for inclusion goes deeper than financial results or other traditional ‘measures’ of business success. It’s about doing the right thing by people. As the above point about retention shows, people now expect their employers, and more so their direct managers, to be demonstrably committed to inclusion. It’s not an exception anymore. And this expectation is sure to increase as workforce demographics continue to shift.

Why is diversity not enough?

Many organizations talk about diversity and inclusion together, and some of the above points refer to diversity alone. But, as we saw earlier, we only get diversity’s benefits if diversity is put into practice—that is, if inclusion is actively practiced.

Diversity just doesn’t work without inclusion.

Inclusion is the lever. It’s the condition in which diversity is welcomed and the benefits of diversity are realized. You can have the most diverse team in the world, but unless every team member is fully included and contributing meaningfully, it really doesn’t mean very much.

This is the case for inclusion.

Inclusion makes sure that the benefits of diversity are realized. The real measure of success in this area isn’t whether a quota of people from different categories are employed. It’s whether they feel listened to and valued through a positive workplace experience.

Diversity of thought: why you should focus on it

Given the many differentiating elements that comprise diversity and the need to exercise inclusion, of diversity and inclusion, what can we—the people development professionals and business psychologists—legitimately focus on in this vast area? What are we qualified to talk about?

Dr Rachel Cubas-Wilkinson, Senior Consultant with The Myers-Briggs Company, answers it like this. “An inclusive culture is one where diverse employees can thrive and bring their unique self to work. The less visible aspects of diversity—thinking styles, lived experiences, work styles, personality types, and values—together form what we call ‘diversity of thought’. This vein of diversity can contribute significantly towards the organization forming an inclusive culture, realizing the benefits of diversity, and being able to recognize the uniqueness of each employee. By broadening our definition and understanding of diversity, we, as learning and development practitioners, can make a stronger difference in the diversity, equity, and inclusion landscape.”

In Diversity and Inclusion Revolution: Eight Powerful Truths, Deloitte writes that ‘diversity of thinking is the new frontier’ because it’s the end goal. It transcends everything else.

Diversity of thought recognizes individuals and the unique pathways of their lived experiences, their psychological and personality preferences, and their perspective. Inclusion then creates the conditions for people to contribute their diversity and bring that strength of perspective diversity to the table. Done right, it helps both diversity and diverse employees to thrive.

For practitioners, this is an area to contribute. This is where we can truly make a difference in the inclusion landscape.