The Business Case for D&I: Ask Catalyst ExpressOct 04, 2019
Catalyst has a large collection of resources on building a strong business case for diversity and inclusion. For organizations starting a diversity initiative, the following entries in the Ask Catalyst Express series will be especially helpful.
Looking Toward the Goal: Inclusion
Although organizations must begin a diversity journey by understanding the current talent in their workforces—including breakdowns by gender, race, ethnicity, nationality, disability, sexual orientation and more—just having diversity isn’t enough. To reap the benefits from increased diversity, organizations need to work toward inclusion. The Society for Human Resource Management defines inclusion as, “the achievement of a work environment in which all individuals are treated fairly and respectfully, have equal access to opportunities and resources, and can contribute fully to the organization’s success.” Catalyst research shows that when people feel included, they are recognized for the distinct characteristics they bring to the team – uniqueness – and feel as though they are true insiders – belonging. To begin thinking about inclusion, it is a state in which everyone can: be authentic; contribute fully and meaningfully; grow, develop and thrive. As the Royal Bank of Canada put it, “In simple terms, diversity is the mix and inclusion is the mix working well together.” Increasing diversity is the first and critical step. But it’s inclusion that makes companies, cultures, and workforces strong.
Consider the Business Case
People looking to increase diversity at organizations are often asked to “make the case” for why it is necessary. Much research has been done to demonstrate that when done well, diversity and inclusion in the workplace can lead to increased revenue, reduced costs, greater innovation, and increased employee engagement, productivity, and commitment. Notably, for companies to most effectively serve the market, their workforce needs to look and think like their customer base.
Catalyst Resources for “Making the Case”
- Sodexo—The Business Impact Of Gender-Balanced Teams Supporter Exclusive
“Sodexo found that gender-balanced teams—those with 40%–60% women in management—had higher KPI results than other teams. Specifically, these teams were more engaged (four point higher global engagement rate over non-balanced teams); had higher brand awareness (five points higher); had better client retention (12% increase); and had more positive profit and growth over three consecutive years.”
- Why Diversity and Inclusion Matter
- Appendix: Why Diversity and Inclusion Matter: Financial Performance
Other Resources for “Making the Case”
- Women Matter: Time to Accelerate—Ten Years of Insights Into Gender Diversity McKinsey & Company
- The CS Gender 3000: The Reward for Change Credit Suisse
Getting Beyond the Business Case
Although Catalyst has produced research and tools about making the case, more recently, Catalyst and others have encouraged companies to “get beyond the business case for diversity.” The business case grew out of a need to explain the business benefits (especially financial benefits) of diversity to stakeholders. However, the connection between financial rewards and diversity is impossible to prove because research can only establish a correlation, not causation, between the two. Further, even though the business case for diversity has been documented by Catalyst, McKinsey, Credit Suisse and others for over 15 years, it never seems to be enough. Some people still ask for more proof that gender diversity is “good for business,” yet it never occurred to them to ask for the business case demonstrating that the status quo or all-male leadership teams and boards are good for business. Instead of trying to seek that elusive “proof” that diversity causes improved business performance, companies should focus on diversity as a talent issue, and recognize that to be an industry leader, it is critical to tap into the full talent pool. By hiring a limited group of people, companies are missing out on significant segments of talent, so they should be putting energy and resources toward recruiting and retaining diverse employees and creating inclusive workplace cultures where everyone has an equal opportunity to contribute and succeed.
Catalyst Resources for Getting Beyond the Business Case
- First Steps—The Business Case for Diversity: Is This a Silver Bullet? Supporter Exclusive
Other Resources for Getting Beyond the Business Case
- Because it’s 2017: Gender Equality as an Innovation Challenge Rotman Management
- Forget The ‘Business Case’ For Diversity And Inclusion Forbes
Return to Ask Catalyst Express.