Over the years, I have continuously had to build a business case for diversity. But recently, I've begun to detest the idea that I even have to do it. We say "not only is it the right thing to do, but look it also saves us money!" But over time, I realized that the upper echelon wasn't typically listening to the "it's the right thing to do" they were just listening to the "why would I do this financially".
I know I'm biased because discussing diversity only in terms of financials goes against my values. To me, "it's the right thing to do" should be enough. So I contemplated how can I create a business case for diversity that would let me sleep better at night. So here goes:
The dollars and 'sense' of it
Many argue that a corporation's purpose in a capitalist society is to make money for its shareholders. Who are our shareholders? Are they a diverse group of people? Are they only composed of most the 'haves' versus the 'have-nots'? If we focus on just our current shareholders we are also focused on a limited group of spending power. So focusing on only current shareholders is a limiting mindset and it's not strategic. We never think of business in this way, it's never just about current customers, it's also about future customers. We need to think about who we can lift up to create greater purchasing power to have a greater pool of shareholders.
Additionally, at a macro-level corporations are not just about making our shareholders money, but corporations truly exist to stimulate the economy. Businesses create jobs, employees have more money to spend within the community, governments collect more taxes which stimulate further growth, and so on. But, we cannot have a healthy economy when only some members can contribute to spending within it. When only the 'haves' have disposable income and the 'have nots' go into debt to try and pay bills, the debt and interest payments further add to the 'haves' wallets--creating larger and larger discrepancies. These discrepancies are creating billionaires that can't possibly spend that level of wealth within one lifetime, never mind one that stimulates the economy for all, implying an eventual ceiling of wealth growth. Therefore, it's in everyone's best interest to have more equal wealth distribution to drive growth at all levels of the economy.
Decades of research shows that increased diversity and inclusion actually allows for more innovative solutions by challenging views and greater breadth of experiences/knowledge/ competencies (CEB, 2009; Martin, 2015). This provides companies with a competitive advantage over their less diverse and less inclusive competitors. We see tangible results in the form of greater return on equity and sales (Catalyst, 2008; Corporate Executive Board, 2009; 2012; Credit Suisse; Deliotte; 2012; Herring, 2009; McKinsey, 2010; 2012), increases market share (CEB, 2009; Centre for Talent Innovation, 2013) and higher customer satisfaction (CEB, 2012; Deliotte, 2012; McKinsey, 2012).
Positive Gain Spirals
Having a competitive advantage may already be a good enough case for some, but for those looking for a more systematic, holistic argument--a more inclusive workplace begins to great positive gain spirals towards greater employee and business results. Specifically, it creates positive momentum by increasing employee engagement (CEB, 2012; Deliotte, 2012; McKinsey, 2012) which increases productivity (Martin, 2015) and increases retention of employees (CEB, 2010; Martin, 2015).
We see this pull through again to the financials with more inclusive companies having higher operating profit (Towers Watson, 2012), higher profitability (CEB, 2009), and greater EBIT margins (CEB, 2012; Deliotte, 2012; McKinsey, 2010; 2012)
The more engaged and happy employees are, the more that they promote the organization as a good place to work which, in turn, helps promote more people to want to work for the company, as well as ensure a positive reputation for customers and shareholders.
"The Right Thing To Do"
At the beginning of this article, I glazed over the fact that diversity, equity, and inclusion is "the right thing to do", but this cannot be overstated. Diversity itself is not a value but a fact. That is every individual comes from a different story, experience, and values framework, so pretending that we are all the same, or that subgroups of us are all the same, just doesn't make sense.
So if we know that we are all unique, and we want to be treated as individuals, why would we treat anyone else as just a number or part of a group. We need to understand individuals, as such--individuals. Understanding people's unique needs, motivations, experiences, and struggles helps us better understand how to work with, lead, coach, and support them. This is the epitome of inclusion.
And diversity, equity, and inclusion are bigger than just one company's money and business results. If we invest in a greater pool of diverse employees, suppliers, and shareholders, we can increase prosperity within a greater number of families and communities. This allows for increased wealth to be distributed to a greater piece of society.
But…What's In It For Me?
If you are still not convinced that diversity, equity, and inclusion are good for business and society, let's talk about how it can benefit you personally. For instance, being more inclusive enhances your cognitive ability/agility, emotional intelligence, and leadership skills (CEB, 2015; Chally Group, 2015; Harvard Business Review, 2010). Specifically, learning people's individual needs, motivations, and strengths helps you understand how to better adapt to them, helps develop your creative problem-solving skills, which, in turn, will drive better team performance (CEB, 2015; Harvard Business Review, 2010)).
Developing these skills will, then, help you get noticed more by your organization. That is, most organizations use agility/adaptability as a key criteria for identifying high potentials (CEB, 2005; 2009; Harvard Business Review, 2010) and a greater number of organizations are using emotional intelligence as a key criteria (CEB, 2009; Chally Group Worldwide, 2015). So by being more inclusive, you also increase your likelihood of getting access to promotions, specialized development programs, and pay increases.
Overall, the typical business case for diversity, equity, and inclusion only outlines a fragment of why it's imperative. Not only is it good for business, but it also is good for yourself, your employees, and society. If you feel you are in a position where you are asking people to justify the costs or the efforts of the work, it's time to take a step back and consider how you would want to be treated, what you value, and what kind of society you want to live in.
Why Psychology Gets a Bad Rap
Let's start off and imagine you are a chemist and you study hydrogen. You conduct experiments on hydrogen and make conclusions about what you observed when you added or changed things while testing hydrogen. You publish this information in science journals such as Nature or Science. Now everyone in the world can make the same assumptions about hydrogen.
Now imagine in the same scenario that when you study hydrogen from different suppliers, each supplier provides you with slightly different measurements of hydrogen. Hmm, I suppose you could work with that, you can control from some differences or tell people which supplier you used in your experiments so they can use your findings if it's the same supplier or type of hydrogen they are using.
Now let's take this one step further...not only is the hydrogen different from the different suppliers, but each time you examine the same hydrogen sample it gives you different results. What the heck is going on? How do you make sweeping generalizations to other samples of hydrogen? How can we even progress our knowledge in this field? How can we make the non-scientific community comfortable with our findings?
What I am trying to demonstrate is what psychology and other social sciences are faced with. Think of the hydrogen as 'people'. Now, think of the suppliers as different countries, genders, organizations, whatever. We think we get a handle of information and then the rug gets pulled from under us because we find some other variable or attribute changes how "people" are country-to-country, or from male-to-female, etc.
Unlike the chemist who can take the sample of hydrogen and make generalizations to hydrogen everywhere, social scientists can't necessarily do that. Therefore, social scientists use statistics to take a sub-sample of the population and try and generalize it to the whole. That is, we try to ensure we include people from as wide of variety of life that we can, within reason.
When we talked about getting different results each time, this is another 'fun' caveat when studying people. I could give you the same personality test two days apart and I wouldn't get the same answers. I would probably get 95% of the same responses, but would almost never be 100% the same. We then have to create rigorous testing parameters to make sure any test or assessment is valid and reliable. However, with everyone from Facebook to Buzzfeed creating a 'quiz' on "what is your type" we start to blur the lines of who is knowledgeable in creating an assessment.
Therefore, sometimes us social scientists feel we have the odds stacked against us. It doesn't help that other scientists such as physicians and chemists call us "soft". Additionally, once the media gets a hold of our studies, information gets watered down or one one day you hear "this is good for you" then the next "this is bad for you", or "absence makes the heart grow fonder" versus "out of sight, out of mind". Then, you lose trust in us.
I'm writing about this to reassure you and help provide you with tools to how to trust social scientists again. For us social scientists, we are responsible to ensure rigourous testing conditions and informing you on who we studied and what our limitations are. For example, the limitations section may discuss how generalizable our findings are. We talk about whether we only studied university students or only one particular organization and how that may impact the results.
These are vital pieces that can get omitted by media reports. Now the study that should have only been applied to young adults gets applied to everyone and it isn't true.
Not only is the media responsible to find that information, but you are too. Dig deeper before you Retweet or Like that headline. Remember that, contrary to the Westworld 2 season finale, us humans aren't as simple as a book's worth of code. Science needs people to be critical thinkers on both the giving and receiving ends of the information.