Equity and inclusion don’t come automatically with more diversity. And this increases the cost to run your business.
The pressure for action in DEI is high, with employees quitting in droves over non-inclusive executive behavior, new board diversity regulations, and requirements from VC and investment firms, just to name a few. The knee jerk reaction for most companies has been to try to increase diverse representation. Some now publicly publish representation metrics. According to Board Prospects, the percentage of black board members appointed before and after the murder of George Floyd rose from 10.1% to 18.5%. Still, many are saying not enough has been done when it comes to diversity, equity, and inclusion (DEI). Why? Because “diversity,” “equity,” and “inclusion” are not interchangeable concepts. In fact, increasing diversity without inclusion and equity is increasing your people costs exponentially.
The compounding costs of the revolving door of diverse talent
*A 2021 mthree survey
**A McKinsey study of industries with highest executive diversity: tech, finance, and healthcare
*** Linkedin poll of 65k+ professionals
In order to fix the vicious (and expensive) cycle of harm, you must look internally to create inclusion and equity within your organization.
To mitigate the negative effects of a systemic problem, you must create systemic change.
Imagine the process of diversifying a garden.
You can spend all the money you want to plant new varieties of plants in your garden, but if your foundation, the soil, has the wrong mixture or is lacking the right nutrients, your new plants will die. You must strategize. You study the needs of the new varieties so you can give them the specialized care they require to thrive. Perhaps you add a greenhouse for those that need more water, humidity, or protection from the elements, or a fence around certain areas to keep animals out.
You invest energy into shifting how the garden system runs, and commit to the ongoing additional care in order to make sure the plants you have introduced have an equitable chance of survival.
Increasing diverse representation without setting up inclusion and equity within your organization is much like planting new varieties of plants in a garden that has not been prepared to support their survival and success. This includes hiring diversity managers without providing them with a budget, a team, or decision-making power. It can also take the form of failing to fire a longstanding C-level executive with a track record of racist, ableist, homophobic and/or xenophobic behaviors.
When running a business, measure what matters (beyond diverse representation)
If you’re running a business, and you know that some of your plants require a consistent soil PH of 5 to survive, is guessing really the best way to keep them alive? Or, claiming you are “taking active steps to lower the PH,” like having meetings about it or looking out for wilting?
No, if you’re serious about your business, you consistently monitor and adjust the pH. In much the same way, you must proactively quantify and improve equity and inclusion.
In fact, research shows popular diversity programs move the DEI needle in the wrong direction, when conducted without ongoing accountability measures in place. Unconscious bias trainings, for example, elicit backlash and decrease equity and representation.
So, how do you measure inclusion (versus engagement) and equity?
Inclusion data comes from employee feedback – especially those that are experiencing exclusion. Unfortunately, engagement is not a good substitute, because engagement represents the symptoms, while inclusion represents the core issues. Measuring equity, on the other hand, is about understanding the gaps in your organization – opportunity gaps, pay and raise gaps, recognition gaps. Both require demographic data to ensure fairness across various groups, particularly those of historically marginalized identities.
In our next post (Measure what matters to create accountability: Inclusion and Equity) we break down inclusion into its subcomponents and discuss best practices on collecting this feedback. We also talk about how to think about equity, how often to monitor it, and why it’s so important to start tracking these metrics continuously. If you’re struggling to get employees to self-identify, we cover this, too. See you there!