Diversity in the Workplace

Recently McKinsey produced a report on why “Diversity Wins”. The report provides a strong case for diversity and inclusion for businesses, primarily executive teams.  They conducted a study by pouring through data from 15 countries and from over 1000 companies.  McKinsey conducted a “social listening” analysis to provide insights about inclusion and diversity.  McKinsey defines the social listening approach as: “³ Social listening is the action of tracking social media platforms for mentions and conversations related to a brand or topic, then analyzing them for insights to discover opportunities to act”.  The “social listening” model tracks social media platforms using multiple tools, such as NLP (Natural Language Processing) and specialized Boolean search tools.  Next are some takeaways from their report and analysis.

Companies that Embrace Diversity Correlates with Outperforming Competitors 

McKinsey conducted of multiple reports on diversity from 2014, 2017, and 2019.  They conducted an analysis of the likelihood of financial performance, and they found that gender diversity and ethnic diversity lead to greater likely hood of outperforming companies that do not.  They found an overall 11% advantage, but the penalty for not being diverse in 2019 was -19%.  They also found that the diversity of executive teams as a whole showed slow growth overall.  They also found that executive teams with more than 30% of women were more likely to outperform companies that had few if any women.  The average female representation was at 21%, but little growth from 2014-19 at 1.1% growth.  Similar numbers were found among ethnically and gender diverse companies showed a 12% advantage, with a greater penalty for not being diverse at -27%.  Overall, they have found that one-third of companies have achieved gains in executive diversity, but the vast majority showed no progress or have digressed.  Diversity in leadership correlates with improved financial success.  

Diversity in leadership correlates with improved financial success. 

Diversity and Inclusion

McKinsey found that mere ethnic or gender representation did not provide advantages, inclusion was a deciding factor. During their study, they found that overall sentiment on diversity was mostly positive, but sentiment on inclusion was mostly negative.  Demonstrating that mere diverse representation was not enough to create an advantage.  On average they also found an overall negative sentiment on leadership.  This demonstrates a need for accountability of leadership and inclusion.  They also found evidence that inclusion is closely tied to employee engagement. 

inclusion is closely tied to employee engagement.

Better Approaches to Diversity and Inclusion

The main takeaway from the report is while diversity and inclusion lead to an overall financial advantage over the competition, most companies are falling behind on creating opportunities and environments that foster them.  Improving diversity and inclusion involves is not just something that happens on its own.  First, a company needs to begin systematizing and tracking their efforts through OKRs.  Also, a company needs to make efforts in creating environments that fosters inclusion at every level, this requires developing an inclusive oriented organizational culture.  Leadership needs to also improve the accountability of teams and fellow leadership.  If leaders embrace diversity and inclusion, they are also improving strategic advantages over the competition. 

If leaders embrace diversity and inclusion, they are also improving strategic advantages over the competition. 

Is your Company Inclusive?

With evidence that diverse and inclusive companies outperform other companies, do you know where your company is on inclusion, diversity, employee engagement, and more?  beepNow can help with companies to improve diversity, inclusion, accountability, and much more.  We offer beepHR as an HRM with a built-in performance management system that includes: OKR, 360s, Task Management, Performance reviews, built-in employee engagement tools, HR metrics, and a system that uses AI and blockchain technology.  We also provide consulting services to help companies with digital transformation and human resource consulting. If you need help with diversity and inclusion, please register for a brief phone or video consultation. 

beepNow can help with companies to improve diversity, inclusion, accountability, and much more. 

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