Diversity Investments: Managers' Role In Creating Inclusive Spaces

A mutual fund is invested by managers in a diverse range of stocks, bonds, and other securities. This type of fund is a collection of funds from numerous investors, which are then invested in securities like stocks, bonds, and money market instruments. While there is a strong business case for diversity, equity, and inclusion, and diverse teams are better able to innovate and anticipate shifts in consumer needs, there is no empirical evidence that a more diverse workforce improves a company's performance. However, companies can benefit from diversity if leaders create a psychologically safe workplace, combat systems of discrimination, and embrace the styles of employees from different identity groups.

Leaders must build trust and create a safe workplace

Diversity, equity, and inclusion (DE&I) are increasingly important topics in the business world. While there is a strong business case for DE&I, it is important to recognise that simply hiring a more diverse workforce will not automatically improve a company's performance. Leaders must build trust and create a safe workplace where employees feel free to express themselves. This involves actively combating bias and systems of oppression, as well as embracing a variety of styles and voices within the organisation.

Creating a safe workplace means fostering an environment where employees feel comfortable bringing their whole selves to work. Leaders can achieve this by setting the right data-driven targets for the representation of diverse talent and ensuring that these targets are well-communicated throughout the organisation. It is also crucial for leaders to hold themselves and other managers accountable for progress on DE&I initiatives.

To build trust, leaders should adopt a systematic, business-led approach to DE&I that is tailored to the needs of their company. This may involve setting evidence-based targets and utilising core-business leadership to drive change. Leaders should also strive for transparency and fairness in processes such as promotions and pay.

Additionally, leaders should promote openness and encourage employees to address microaggressions. This can be facilitated by establishing norms for welcoming behaviour and providing resources for identifying and addressing discriminatory behaviour. By prioritising DE&I and creating a safe, inclusive workplace, leaders can drive better business performance and enable their organisations to prosper.

Actively combat bias and systems of oppression

Actively combating bias and systems of oppression is crucial for creating an equitable and inclusive workplace. Here are some steps that managers and leaders can take to address this issue:

Building Trust and Safe Spaces

Foster an environment where employees feel safe to express themselves without fear of discrimination or retaliation. Encourage open dialogue, respect different viewpoints, and ensure that all employees feel valued and included.

Challenging Unconscious Biases

Unconscious biases are deeply ingrained and often unintentional. Leaders should educate themselves and their employees about these biases and actively work to identify and challenge them. This may involve regular training, promoting cultural competency, and encouraging self-reflection.

Addressing Structural Inequalities

Examine and challenge the power structures and policies within the organisation that perpetuate oppression and discrimination. This could include discriminatory hiring practices, promotion criteria, or unequal access to resources and opportunities. Work towards creating equitable processes and providing equal opportunities for all employees.

Promoting Diversity and Inclusion

Diversity goes beyond numbers; it's about ensuring that a variety of styles and voices are embraced within the organisation. Encourage employees to bring their authentic selves to work and value their unique contributions. Foster an environment where different cultural backgrounds and identity-related knowledge are celebrated and utilised for organisational growth.

Holding Leaders and Managers Accountable

Diversity, equity, and inclusion (DE&I) efforts should be driven by leaders and managers. Hold them accountable for promoting inclusive behaviours, addressing bias, and creating equitable processes. Ensure that DE&I goals are integrated into performance evaluations and that leaders are provided with the necessary tools and training to effectively lead diverse teams.

Continuous Learning and Improvement

Creating an inclusive workplace is an ongoing process. Regularly seek feedback from employees, especially those from underrepresented groups, to understand their experiences and identify areas for improvement. Use this feedback to inform policy changes, training programs, and initiatives that promote a more inclusive and equitable environment.

By actively combating bias and systems of oppression, organisations can create a workplace where all employees feel valued, respected, and empowered to reach their full potential. This not only benefits individual employees but also enhances organisational performance and innovation.

Embrace a variety of styles and voices

Diversity and inclusion are essential for any business, and leaders must embrace a variety of styles and voices inside their organisations. This means creating a workplace where employees feel safe to express themselves and their unique perspectives. It also involves actively combating bias and systems of oppression, such as discrimination and subordination, which can stifle diverse voices.

Fostering an environment where employees feel valued and respected is key to embracing diversity. Leaders should strive to create a culture of trust, where employees are encouraged to share their identity-related knowledge and experiences. This can lead to valuable learning opportunities and improved organisational effectiveness.

Additionally, leaders should promote equality and fairness of opportunity, ensuring that all employees have equal access to advancement and development within the company. This may involve setting data-driven targets for the representation of diverse talent at all levels of the organisation, from executive roles to management positions.

To further embrace a variety of styles and voices, leaders should encourage open communication and welcome feedback from their employees. This includes actively listening to employee sentiment and addressing any concerns or challenges they may be facing. By doing so, leaders can create an inclusive culture that values and supports all members of their team.

Finally, leaders should also be mindful of unconscious biases that may exist within the organisation. These biases can influence decision-making and hinder the inclusion of diverse talent. Regular training and awareness campaigns can help employees recognise and overcome these biases, creating a more welcoming and inclusive environment for all.

Use employees' identity-related knowledge to improve

To improve, leaders should use employees' identity-related knowledge and experiences to learn how best to accomplish the company's core work. This involves creating a workplace where people feel safe and free to express themselves and their identities. Actively combating bias and systems of oppression in the workplace is crucial. This includes addressing unconscious biases and exclusive behaviours that may be reinforced by working remotely.

To create an inclusive environment, leaders should embrace a variety of styles and voices inside the organisation. This means valuing and utilising the diverse talents and perspectives of their employees. During times of crisis, such as the COVID-19 pandemic, fostering inclusion and diversity becomes even more important. Leaders who welcome diverse talents and include multiple perspectives are more likely to navigate their organisations successfully through challenging times.

To benefit from increased diversity, organisations must be willing to change their corporate culture and power structure. This involves addressing issues of equality, openness, and belonging in the workplace. It is not enough to simply hire a diverse workforce; leaders must also create an environment where all employees feel they belong and can bring their whole selves to work.

Additionally, companies should strive for transparency and fairness in promotions and pay processes, as well as in their long-term workforce plans. By embracing employees' identity-related knowledge and experiences, organisations can improve their decision-making capabilities and make more effective strategic choices. This, in turn, can lead to better financial performance and organisational effectiveness.

Diverse teams can better innovate and anticipate shifts

A 2015 McKinsey report on 366 public companies found that those in the top quartile for ethnic and racial diversity in management were 35% more likely to have financial returns above their industry mean. Similarly, companies with greater gender diversity were 15% more likely to have returns above the industry mean. Furthermore, racially diverse workplaces show higher revenue growth than their less diverse counterparts.

Diverse teams are better at making decisions and innovative ideas happen. They can bring a broad array of experiences, perspectives, skills, and networks to the table. This expansive resource base allows them to execute ideas more quickly, efficiently, and cost-effectively. For example, a Disney Park collaborated with the broader Medici Group, tapping into the resources, knowledge, and experiences of other Disney parks and divisions. This reduced the time to execute an idea from 40 weeks to just 6 weeks, improving the park's operational efficiency and adaptability to changing market demands.

Additionally, diverse teams create more unconventional ideas. The more diverse a team is along dimensions such as culture, ethnicity, gender, sexuality, age, experience level, and educational background, the more likely they are to draw inspiration from unexpected places. These idea combinations lead to more innovative and unconventional ideas. An example of this is Wegmans' introduction of cauliflower rice, which was implemented thanks to the inclusive and diverse culture that values input from all employees.

To fully benefit from increased diversity, organizations must adopt a learning orientation and be willing to change their corporate culture and power structure. Leaders play a crucial role in creating a psychologically safe workplace, combating systems of discrimination, embracing the styles of employees from different identity groups, and promoting cultural differences as a resource for learning and improving organizational effectiveness.

Frequently asked questions