Faced with an uncertain economy, many companies are looking for ways to cut costs. And while there are some budget-reduction measures that make sense, reducing diversity, equity and inclusion (DEI) efforts could in fact cost companies in the long run.
In a recent Korn Ferry executive survey, nearly a third (30%) of respondents said the weakening economy is slowing down DEI efforts in their organization.
However, if done properly, there is a direct correlation between DEI advancements and business success. According to a recent Korn Ferry report, companies that embrace diversity and inclusion are 70% more likely to capture new markets and 75% more likely to see ideas become productized.
Experts agree that a focus on DEI objectives needs to be championed by the C-suite, but the largest percentage of recipients in the Korn Ferry executive survey (37.5%) said DEI advancement is the responsibility of everyone in the organization.
To be truly effective, DEI needs to be woven into every aspect of an organization, from creating a robust, diverse pipeline at all levels of the organization to putting in place processes and structures to positively impact employees, customers, business partners and the community.
This involves a concerted effort to clearly identify, communicate and follow through on DEI objectives. According to the Korn Ferry executive survey, results are so far mixed. Fewer than half (47.5%) of respondents said their organization has stated DEI goals and only 15% agree to a great extent that their organization follows through on steps to achieve stated DEI goals.
A key to achieving success is to create a culture where DEI is not only encouraged but rewarded, and work needs to be done in this area as well. Fewer than one-quarter (23%) of recipients said middle managers are judged on key performance indicators (KPIs) related to DEI efforts.
Putting in place clear business objectives on how DEI can help achieve those goals is key to moving the needle. The first step is to analyze the issues a company wants to solve — such as growth, innovation or optimizing talent performance — and then use a diversity lens to define what outcomes are needed to solve those issues. This could include market share growth among new demographics of consumers, generation of product, services, or process innovation and speed to market.
As we move forward, a clear mindset shift — from DEI as a one-off initiative to a comprehensive business imperative — will be critical to solving business, talent and societal issues.
A cautionary note as leaders work to expand and strengthen DEI efforts: Inclusivity is key to ensuring all employees feel valued. In a recent study by Gartner, 42% of professionals said they felt their company’s DEI efforts are divisive. In addition, two out of five agree that a growing number of employees feel alienated by or even resent their organization’s DEI efforts.
A lot of this resistance is caused by the failure to frame DEI as an enabler to achieving innovation and business outcomes. Organizations need to activate the mix of differences they have on their teams to co-design better products, experiences and solutions with and for their diverse customers, communities, employees and business partners. Once companies show their stakeholders that their investment in DEI has tangible impact, much of the internal and external resistance will dissipate.
The economy will eventually return to an upswing, and organizations that stayed focused on the issues of DEI will emerge as clear winners.
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