The overall message is that having an open-door policy does not always let the best people in. Even when diverse talent does get through the door, it takes hard work to get the kind of value out of it that hits the bottom line.
To overcome this challenge, large and midsize companies institute diversity and inclusion departments. And research shows that high-performing companies generate much more measurable outcomes with their diversity and inclusion departments than low-performing companies.
In high-performing companies, these departments consult with executives, managers and HR to attract, engage and leverage the best local and global talent across all dimensions of diversity to produce competitive business results such as penetrating new markets, going deeper into existing markets, and identifying new innovative products and services. In lesser-performing companies, they might focus on just employee branding, image and compliance. Generally, this shortsighted approach does not produce measurable business outcomes.
Furthermore, diversity and inclusion efforts in high-performance companies are more business relevant, strategically integrated, include leadership support across various layers of the enterprise and are guided by business impact metrics. While in some companies, they are part of HR, and in many of these cases, they also have a dotted line to the CEO. In others, they have C-level officer that reports directly to the CEO.
CEOs can help D&I contribute to the company’s overall growth goals by doing the following:
- Give your D&I department long-term goals. Rather than producing programs that offset shortcomings in attracting or leveraging diversity in other parts of the company, charge D&I to act as a consultant, advisor and change agent across the enterprise, to leverage and place talented employees where they fit best.
- Challenge business unit leaders to leverage diversity to produce business results. One airline netted approximately $1 million in revenue by leveraging its faith-based employee networks to identify conference travel revenue opportunities. A healthcare organization built a facility for its lesbian, gay, bisexual, and transgender (LGBT) community after recommendations from the company’s LGBT network to the construction teams. Today that clinic is providing services to over 500 transgender patients annually, generating profitable and growing monthly billable services.
- Require all group leaders to track at least one business-relevant diversity and/or inclusion metric. Base it on their sphere of control and show how they are including and leveraging diversity to help achieve specific business goals. For example, sales can show how they leverage organizational diversity to increase revenue among a target demographic; marketing can show how they increase touch-points in new markets or approach current markets in new ways; and global teams can show how they leverage regional differences to identify opportunities or innovations from around the world.
No matter where your company is today in its D&I journey, these simple steps will quickly provide competitive advantages now and prepare your firm for a diversity-rich future.