DEIB Part 1: Why should your organization embrace Diversity, Equity, Inclusion and Belonging?

By Tess Zachary

This series will address some basic information about DEIB and help you to see where your organization, event, or club can implement DEIB Strategies. We have broken this content into three (3) parts:

Part 1: Why should your organization embrace DEIB?

Part 2: What is DEIB?

Part 3: Belonging – How can your organization become DEIB?

In each part, I will provide resources and some ideas for promoting DEIB in your organization. Sometimes it can be difficult to know where to begin. While I am not an expert, I’ve had the benefit of some exceptional training and mentorship as I tried to navigate this road for various organizations, and I wanted to share some of the things I’ve learned to help others find a way to begin adopting DEIB into their lives and the culture of their organizations.

Introduction

It is 2023, and we all know surrounding ourselves with people just like us prevents us from growing, and diversity gives us the benefit of a broader point of view. 

Despite it being 2023, some organizations decide that saying “Everyone is welcome” is enough of an effort. While saying “Everyone is Welcome” may reflect a genuine, well-meaning desire for inclusivity, I don’t believe it is enough, and that sentiment certainly doesn’t acknowledge, appreciate, and celebrate differences, where everyone feels a sense of belonging and benefits from a safe, healthy, and positive environment. It is not enough to merely say everyone is “allowed” to come. I believe you must actively remove barriers and make people welcome if you truly want a diverse environment, or you risk just reaffirming the majority.

So, what’s the problem? 

While specific Non-profit and Not-for-profit stats don’t exist, we can look to business for our cues. 

According to McKinsey and Company, in the United States, businesses spend Eight Billion dollars on DEI training each year. Yet still, according to a 2021 BCG Study, up to 75% of employees don’t feel any personal benefit from them.

One reason that may be is because training alone won’t combat personal bias. You need time and focus to address biases and promote an intentionally inclusive environment. Furthermore, leadership should model and drive DEIB initiatives, and collect DEIB data to ensure decisions are data-driven.

Understanding your own and your team’s implicit/unconscious biases is key to opening doors to equity. (Note: Project Implicit offers a tool to test your implicit associations about race, gender, sexual orientation, and other identities.)

Organizational Roadblocks

Sometimes doing the right thing is enough for an organization, and sometimes organizations need data-driven evidence to decide DEIB is important. 

Some data driven talking points: 

• According to Gartner, “differences of age, ethnicity, gender and other dimensions foster high performance.” The organization predicts that through 2022, 75% of companies with diverse and inclusive decision-making teams will exceed their financial targets. (2019, Gartner)
• A McKinsey report showed that companies in the top 25% for racial/ethnic and gender diversity were 35% and 15% more likely to have financial returns above their national industry medians, respectively. The report also finds a linear relationship between racial and ethnic diversity and better financial performance: for every 10% increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8%. (2015, McKinsey & Company)
• The World Economic Forum has found that companies with above-average diversity scores drive 45% average revenue from innovation, whereas companies with below-average diversity scores drive only 26%. (2019, WeForum)
• According to Josh Bersin’s research, companies with high levels of diversity and inclusion are exceptional businesses with 2.3 times higher cash flow per employee over a three-year period. They are 1.8 times more likely to be change-ready and 1.7 times more likely to be innovation leaders. (2015, Josh Bersin)
• Diversity leads to increased performance, better problem solving, and are more successful in completing tasks. (2008, Phillips, Liljenquist & Neale)
• The benefits of gender diversity are kind of hidden, and because they’re hidden, they’ve been underutilized. (2022, Yang, Tian & Woodruff)
• Diverse companies have a 19% higher innovation revenue.  (2018, HBR Lorenzo, Reeves)
• Ethnically diverse companies are 35% more likely to outperform, while gender-diverse companies are 15% more likely to do so. (2022, McKinsey & Company)
• Companies in the top 25% for racial/ethnic and gender diversity were respectively 36% and 25% more likely to have superior financial returns. There’s still work to be done when it comes to the leadership ranks. The study noted that “ethnic diversity in leadership teams progressed slowly” in Gartner’s 2014 data set and “even more slowly” in its global 2017 data set. (2015, McKinsey and Company)
• Diverse teams outperform individuals about 87% of the time during business decision-making processes. In fact, diverse teams were also shown to make decisions faster than individuals. Gender-diverse teams are especially effective, outperforming individuals 73% of the time, compared to 58% for all-male teams. (2020, Cloverpop) 
• Based on the research of Katherine W. Phillips, Katie A. Liljenquist, Margaret A. Neale the Kellogg School of Management at Northwestern University: “…research finds that socially different group members do more than simply introduce new viewpoints or approaches. In the study, diverse groups outperformed more homogeneous groups not because of an influx of new ideas, but because diversity triggered more careful information processing that is absent in homogeneous groups. The mere presence of diversity in a group creates awkwardness, and the need to diffuse this tension leads to better group problem solving, says Katherine Phillips, an associate professor of management and organizations at the Kellogg School of Management. She and her coauthors, Katie A. Liljenquist, an assistant professor at Brigham Young University, and Margaret A. Neale, a professor at Stanford University, demonstrate that while homogenous groups feel more confident in their performance and group interactions, it is the diverse groups that are more successful in completing their tasks.” (2010, Phillips, Liljenquist, Neale)

• Mixed-gender teams produce more novel and impactful work. (2022, Yang, Tian, Woodruff)
• Increasing the diversity of leadership teams leads to more and better innovation and improved financial performance. In both developing and developed economies, companies with above-average diversity on their leadership teams report a greater payoff from innovation and higher EBIT margins. Even more persuasive, companies can start generating gains with relatively small changes in the makeup of their senior teams. (2017, BCG) 

Specific to Business 

Here are some ways in which diversity and inclusion help business:

1. Access to talent: Because so many hires are through referrals, a diverse workforce provides more channels for acquiring talent. Think of each employee as a vector in a network who can attract new talent. To attract the best available talent, those personal networks must be plentiful and deep. (2016, Makers Conference Sandberg, Goler) This absolutely applies to non/not-for-profit structures according to Volunteering data in the US shows that volunteers also look like those who engage them – White (26.4% versus 19.3% Black, 17.9% Asian, and 5.5% Latinos/as), educated (65.3% with at least some college education), and women (27.8% versus 21.8% men). 
2. Variety of perspectives: Diverse workforces include people of varying gender, age, religion, race, ethnicity, cultural background, sexual orientation, languages, education and physical and mental abilities. A workforce with varying perspectives is ideal when planning and executing a business strategy in global regions that mirror that diversity since team members have a clearer understanding of their markets. (2016, Makers Conference Sandberg, Goler)
3. Inclusion has powerful neurological effects: Neurological research proves employees are more productive, innovative, and collaborative when they feel valued. Diversity, rather than homogeneity, increases the feeling of being accepted as part of a team in many ways — one of which is that people who might otherwise feel marginalized or different feel more included. Another outcome is the increased creative output from groups with diverse perspectives; individuals meld their ideas, resulting in something fresh and new. (2015, Bersin)
4. Faster problem-solving: A Harvard Business Review study found that teams solve problems faster when they are more cognitively diverse. They share thought processes, educate one another in new ways of thinking and problem-solving, and they all become more flexible. Each member brings something different to the challenge, and when one approach takes too long, another is bound to be quicker. 
5. Better decision-making: A Cloverpop study found that when diverse teams of three or more people made a business decision, they outperformed individual decision-makers up to 87% of the time and made decisions with a 60% improvement over non-diverse teams. This factor is further enhanced with greater gender, ethnic and age diversity.

So, there is clearly a business case for DEIB, even if your group, organization, or event is resistant. To learn more about DEIB and what it means to organizations, read Part 2: What is DEIB exactly?