The recent anti-racism movement has brought about not only the need but a true urgency for us all, as individuals, leaders, and industry drivers to learn more and embrace the often uncomfortable and tough issues of race and inclusive diversity. In fact, these have a direct impact not only on how we show up as leaders, but also on the strength of our companies’ financial bottom lines.
From Diversity to Inclusion
While many have been using the buzzword of diversity as either an added value to their company’s mission, as a new HR recruiting approach, or as an additional requirement for their Board member’s nomination, for most the crucial distinction between diversity and inclusion is still missing.
Diversity is focused on creating a wider representation of people and backgrounds. These can be by race, gender, age, education, or sexual orientation—to name a few of the forty-two dimensions of diversity in the workplace.
DIVERSITY: Focusing on creating a wider representation of people and backgrounds.
INCLUSION: Integrating, including, and leveraging the differences of a diverse workforce to create real added value. But creating diversity does not imply that you are integrating, including, and leveraging these differences to create real added value. That is inclusion. While the first step towards creating inclusion is to recognize and understand the need to bring in diversity, without inclusion these efforts will not be productive or sustainable.
Creating an environment that allows all stakeholders—employees, the field, customers, and vendors—to feel valued, respected, accepted, and encouraged to fully participate is the only way to have an inclusive culture that can foster the sense of belonging. This then leads to more innovation, trust, teamwork, and higher productivity that, in turn, generates a higher financial performance. So make sure that your organization’s end goal is not just diversity but creating an inclusive culture.
From “Checking a Box” to “Cultural Transformation”
The short-sighted approach of diversity as a “check box” provides to many the immediate “relief” of having accomplished their part. It is true that adding an African-American to your Board of Directors, committing to hire more C-suite women of color, or hiring a Chief Diversity Officer are indeed great first steps. But let’s be clear in managing the expectations that one could get from these initial actions: You are broadening the representation in your team, but are you letting them play in the game?
A recent Gartner research study shows that only 36 percent of chief diversity officers have reported that their organization has been effective in building inclusive diversity. Why? Because hiring a Chief Diversity Officer does not change your culture into an inclusive organization.
The same goes for adding more multi-racial people into your C-suite or Board of Directors. These are extremely positive steps but only if combined with an intentional, solid commitment of your organization’s leadership to create an inclusive culture. This starts with the leaders—CEOs, C-suite, and Board of Directors on the company side and field leadership on the other. An organization’s cultural change starts with its leadership’s cultural transformation. Remember, organizations do not change, people do.
To become an inclusive leader—with a new type of leadership style capable of fostering, managing, and effectively leveraging diversity—industry leaders must be prepared to learn and/or fine-tune some new and critical skills. The first step is to accept and embrace the vulnerability for many to showcase, without judgment or fear of retaliation, that they do not know what to say or do as they can’t relate to or fully understand the racial sensitivities of their diverse teams, employees, and/or field members. Courage is one of the three most important traits of an inclusive leader.
The next step is to start acknowledging and identifying their biases. As human beings, we all have biases. But being biased is not the issue; making important company decisions based on dangerous biases is.
A direct selling industry CEO recently shared that he struggled with knowing what to say and do about diversity with his teams and employees. In fact, he was born and raised in a geographical area within the US that is predominantly white and had no racial diversity around him growing up in his community. When he became a leader within the industry, his network and the people he hired were all like him. So, it was not that he was intentionally biased. But now that he had identified this, he did not know what to do about it. The courage of this CEO to acknowledge his blind spots as well as his desire to identify and learn how to build cognizance is the second most important trait of an inclusive leader.
This is one of the most challenging hurdles for many leaders who have always been the “know-it-all” and “do-it-all” for their organizations. Take a moment here to reflect if you can relate to this CEO’s example. Your vulnerability and courage to share with your teams, employees, and field that you might not know, but want to learn, or need others’ help to do so, is the first step towards becoming an inclusive leader. Too often the burden of identifying and addressing unconscious bias is on the people who are the recipient of these biases. Making an intentional effort to shift that responsibility is crucial in your leadership success.
3 Practical Steps to Create Inclusive Diversity
1) LEARN: Strengthen your personal knowledge by reading and getting trained. Also, listen to your employees and your field to find out about gaps, key issues, and important biases through anonymous assessments or surveys, followed by focus groups, community gatherings, and other meetings that are facilitated by expert professionals in this area.
2) BE: Acknowledge and own up to your own biases. Show up to the conversations, share with others, and be involved in the process versus asking only others to be. Create weekly or monthly forums for exchanges and stay consistent in your efforts. Embody the value shifts in your daily behaviors as a DEI champion and in your immediate business prioritizations, making this an important strategic initiative for your organization. Start training your executives formally and professionally.
3) DO: Develop your own and your team’s Cultural Intelligence (CI) through professional experts’ trainings and workshops. Establish the link between your business and your D&I strategy by connecting the KPIs and creating accountability across the entire organization. Track and measure your KPIs to make sure you stay on course with your financial and cultural objectives simultaneously. Remember this is a journey, not a sprint.
The third and probably the most important inclusive leadership trait is knowing and effectively operating multi- and cross-cultural interactions in a conscious and mindful way. This is called having Cultural Intelligence (CQ). Over the past decade, as we shifted to prioritizing EQ over IQ, CQ is now the new leadership must-have.
Many organizations invest in various initiatives to create growth within their organizations, but very few see their internal leadership development and their organization’s cultural alignment and transformation as areas that drive their business’ KPIs. Often one of the most critical missing links is the disconnect between the leadership/cultural diversity KPIs and the financial KPIs. While the first are often in forms of statistics driven by Human Resources, the second are the strategic business drivers that create sustainable growth and are driven by Boards and CEOs. Until you connect these success indicators and approach diversity and inclusion transformation with the same dedication you approach your sales strategy, there will be no real change.
Interestingly enough, a 2020 study conducted by a non-profit think tank showed that while the majority of senior-level leaders (mainly white males) thought that inclusive diversity is a very important topic, a large number of them see it as “extracurricular.” They expressed that since it is not part of their core work
responsibilities or performance reviews and does not align with their goals to achieve the company’s financial targets, they cannot prioritize it. If you are committed to inclusive diversity, make sure your strategic, financial, and cultural goals are fully connected and aligned so that everyone within the organization can work together towards the same goals.
The Smart Financial Decision to Make Now
Many see diversity and inclusion as more of an HR-related, cultural, social, and sometimes even political issue. In doing so, they are missing the most important aspect of it: its business perspective and financial impact.
To better understand the relevance of inclusive diversity within our companies’ and industry’s financial growth and future success, it is important to first review a few key numbers.
From a global perspective, by 2025, the world’s middle-class population is expected to reach 3.2 billion, with most of the growth coming from Asia, Africa, and Latin America. China and India are predicted to becoming 50 percent of the global workforce soon.
In the US, a 2020 study from the University of Georgia shows that minorities (non-white population) represent more than $4 trillion of our national purchasing power. The largest—and one of the fastest-growing groups—is the Latino/Latina, who represent 50 percent of this number with a 20 percent estimated growth. Asians have the largest projected growth of 29 percent and represent currently $1 trillion in purchasing power. Blacks have a projected 8.5 percent growth with $1.3 trillion buying power. Whites, while still having most of the purchasing power, have a projected single-digit to negative growth.
A 2020 Forbes article points out that companies with inclusive cultures produce a greater proportion of their revenue from innovation (45%) compared to those who do not."
The most recent census shows that more than 50 percent of Americans under the age of eighteen identify as non-white and are racially ethnic. Generation Z is also shown to be the most racially and ethnically diverse of any other generation. Even more than millennials, who are currently the largest represented generation with 45 percent of them being minorities, Gen Z highly values inclusion. As such, their choice of brands, as a customer, is greatly impacted by whether the company has an inclusive brand and culture.
Also, current employment statistics show that four in ten employees are non-white and that by 2023–2025, non-whites will be the majority of the working class in America. As our nation becomes more racially diverse from “the bottom up” of the age structure, there is an absolute necessity to focus on the needs and opportunities of these highly diverse generations.
Additionally, more and more research and reports show the important positive financial impact of inclusive diversity. A 2020 Forbes article points out that companies with inclusive cultures produce a greater proportion of their revenue from innovation (45%) compared to those who do not. This greater innovation-related advantage translates into overall better financial performance. A 2019 McKinsey research study also shows that companies in the top quartile for racial and ethnic diversity were 35 percent more likely to have above-median financial returns.
Whether you operate only within the US or globally, these statistics highlight what the characteristics of the market opportunity from a customer, a consultant, as well as an employee perspective are for us. When you look at your current employee base, your leadership team, your field, and your customers, do they reflect what the US looks like today and within the next few years? If not, what are you currently doing to ensure that your company, your leadership, and your brand will stay relevant and attractive to the next generation? Do you have any strategic initiatives, part of your top priorities today, linked to learning and becoming an inclusive brand and embracing an inclusive leadership and culture?
Everything points to the fact that embracing inclusive diversity is no longer the right thing to do, but the most important strategic decision you need to make and implement today to stay relevant and ensure your organization’s financial growth and sustainability.
*Contributor-submitted article. Articles submitted by contributors and published in Direct Selling Journal do not necessarily represent a DSA endorsement nor do opinions expressed therein necessarily represent those of DSA.