There’s no question hiring a diverse workforce is critical. But when it comes to diversity, equity and inclusion, DEI, you must look at the whole picture. That’s because each of these three words has meaning and importance. You can’t achieve success without shaping a plan that takes them all into account.
Diverse organizations are stronger
Let’s start with what has now become increasingly obvious. Diverse workforces make organizations more collaborative, productive and innovative. According to McKinsey’s Diversity Wins report, “There is ample evidence that diverse and inclusive companies are likely to make better, bolder decisions—a critical capability. For example, diverse teams have been shown to be more likely to radically innovate and anticipate shifts in consumer needs and consumption patterns—helping their companies to gain a competitive edge.”
McKinsey’s latest analysis “reaffirms the strong business case for both gender diversity and ethnic and cultural diversity in corporate leadership—and shows that this business case continues to strengthen. The most diverse companies are more likely than ever to outperform non-diverse companies on profitability.”
Companies with greater gender diversity on executive teams are 25 percent more likely to experience above-average profitability. In the case of ethnic and cultural diversity, the findings are equally compelling. More diverse companies outperform on profitability by a whopping 36 percent.
Why isn’t hiring enough?
It’s tempting to think hiring is the sole solution, but that is far from the whole answer. HR-focused writer Riia O’Donnell describes it this way, “If diversity is the noun, then inclusion and belonging are the verbs that make it happen. You can hire as many people from disparate backgrounds as you like, but if they don’t believe they belong, or if their points of view are not included in the culture, you’re just checking off items on a list.”
Karen Brown, founder of the diversity and inclusion management consulting firm Bridge Arrow, posits that, “Most business leaders understand the diversity part of diversity and inclusion. They get that having a diverse workforce is important to customers and critical to succeeding in a global market. It’s the inclusion part that eludes them—creating an environment where people can be who they are, that values their unique talents and perspectives, and makes them want to stay.”
It’s clear diversity initiatives must take inclusivity into consideration, but there’s another piece to this puzzle: equity. To explore the full meaning of this word, the University of Iowa offers a definition that can apply to any organization. “Equity refers to fair and just practices and policies. Equity is different than equality in that equality implies treating everyone as if their experiences are exactly the same. Being equitable means acknowledging and addressing structural inequalities—historic and current—that advantage some and disadvantage others. Equal treatment results in equity only if everyone starts with equal access to opportunities.”