Investing in Inclusion and Diversity
The concepts of diversity and inclusion are frequently touched upon in conversations about the performance of businesses and nonprofit entities. Diversity manifests itself when we value differences of race, gender, ethnicity, national origin, culture, sexual orientation, age, religion, disabilities and perspectives. Inclusion refers to promoting and valuing the contribution and integration of all individuals and cultural groups and recognizing that personal and community barriers exist to achieve this.
Both concepts complement each other when acting on the right to be different. Organizational development research supports the need for establishing a culture that respects differences as it has been shown to impact performance significantly. Beyond theory and values, diversity and inclusion can be material to a company, and a firm’s achievements and growth are influenced by these factors. Global consulting firm Deloitte published a study in 2018 entitled “The diversity and inclusion revolution” in which they identified up to eight areas within which businesses can look towards diversity and inclusion to create positive impacts on strategy, risk management and the optimization of results.
Non-profits have also approached this discussion through their investment assets. A Knight Foundation sponsored study on asset management and performance entitled “Diversifying Investments” presents cutting-edge approaches of integrating inclusion and diversity criteria in managing investment portfolios. How does investing broaden the discussion? The interests of nonprofit endowments and investment reserves represent billions of dollars in company ownership and they are increasingly aligned with the worldwide adoption of the United Nation’s Sustainable Development Goals (SDG). These are 17 postulates that emphasize actions towards sustainability.
The SDGs were developed through meetings among governments, private companies, non-governmental entities and citizens, were participants discussed common social and environmental challenges. The 17 SDGs arose from these meetings, and they address diversity and inclusion issues through goal 10 on the Reduction of Inequality, which calls for companies to: 1) educate about the benefits of diversity and inclusion, 2) provide decent work conditions through the value chain, 3) avoid tax evasion mechanisms, 4) promote the development of cooperative projects, and 5) encourage management practices that respect and safeguard the rights of people with disability. SDG 10 shows that diversity and inclusion should be a strategic priority for companies and can be fundamental in achieving sustainability.
To undertake successful business projects, we must learn that diversity is directly linked to innovation and that it applies to both for-profit and non-profit contexts. In principle, the greater the diversity of the workgroup, the greater the number of needs they will be able to meet. In practice, many businesses have already put this idea in place. A 2013 Harvard Business Review article revealed that 85% of companies with annual income above $500 million recognize diversity as a key driver of innovation. Also, that leaders exhibiting inclusive behaviors, achieve a 3.5-fold increase in their employee’s contribution to innovation. Within these contributors to innovation women and LGBTTQ employees, show the largest increases, regardless of race and ethnicity, even when women are on average inferiorly remunerated when compared to men.
The National Council of Nonprofits highlights a prominent section on its website that aims to educate on why diversity, equity and inclusion are key aspects for nonprofit organizations. The council recognizes that best practices in strategic planning require maximizing talents, repositioning mission and vision by incorporating diversity criteria, and developing inclusive programs and projects.
I conclude by concurring in thought and action with Jennifer Brown, an outstanding entrepreneur and author of the magnificent book “Inclusion, Diversity, the New Workforce and the Will to Change”. Brown states that beyond the legalistic views that have sought to dominate the issues of inclusion and diversity, the essence of putting it into practice is all about leadership. Leaders must have the will and self-discipline to act in favor of change and keep executing consistently even when faced with the resistance that groundbreaking changes generate.
The author is the founder of Changemaker Consultants LLC, the Changemaker Foundation and a fellow of the Robert Wood Johnson Foundation - Culture of Health Leaders Program.