By RedBalloon for Business

The importance of diversity at work

Over the past 10 to 15 years, the topic of diversity in the workplace has increasingly gained traction as an important business issue; in the post below, Joy Adan and Danielle Fryday look into what it means to have a diverse workplace, and why and how to encourage and embrace it.

Traditionally, the minute someone mentions workplace diversity, the first thing most people think of is gender equality. Which makes sense, since the the topic of gender equality has been on the radar of Australian organisations since the introduction of anti-discrimination and equal opportunity legislation in the mid 1980’s, and can be considered by many as the precursor to the diversity discussion.

There’s no doubt that there is still work to be done establishing gender equality in the workplace, especially in some stereotypically male dominated industries (IBM’s need to pull the plug on their #hackahairdryer campaign is very telling of this), but in recent times, more leaders are realising workplace diversity is a much broader subject, and no longer just a conversation about gender.

Defining (and evolving) the term ‘diversity’

Those familiar with the origins of workplace diversity literature may know of Marilyn Loden’s Diversity Wheel, which identifies primary and secondary dimensions that inform our societal identities. Primary dimensions include, but are not limited to, gender, ethnicity, sexuality, age and race, while secondary dimensions include geographic location, education, cognitive style and family status.

First published in 1991, Loden’s wheel helps explain how group-based differences contribute to individual identities (therefore making up a diverse workforce) and has since undergone a few iterations based on Loden’s observations and changes in society over time.

Twenty years on, in their 2011 Only skin deep? report, Deloitte Australia reexamined the business case for diversity and advocated for a broader definition of the term. “Diversity of thought is the end game”, the report claims, supporting a more multi-dimensional definition of diversity where “different perspectives and capabilities are the point of difference, rather than visible characteristics”.

Companies that want to position themselves for the future need to broaden their focus to embrace the value that differences in race, ethnicity, language, nationality, religion, sexual orientation, family structure, working arrangements, thinking and learning preferences can offer.

Best Practice Employee Recognition helps organisations to bring people together, regardless of any difference.

Why this matters for your workplace

We’ve written before about the importance of creating connection and a sense of community and belonging in the workplace. Respecting diversity and creating space and opportunity for inclusion, plays a critical part of this, particularly for leaders who are looking for ways to help their people thrive.

“We need communities, but communities also need us,” says Hugh Mackay, a social researcher and author of The Good Life and The Art of Belonging. “A good life,” He claims, “is lived at the heart of a thriving community, among people we trust, and within an environment of mutual respect.”

And so it goes when you’re running a business. If you want engaged, motivated and thriving individuals working for you, then create for them an environment of inclusion and respect. An environment where, according to Bersin by Deloitte’s Diversity and Inclusion report,

“People feel involved, respected, valued, connected and where individuals bring their authentic selves (ideas, backgrounds, and perspectives) to the team and business”.

Marilyn Loden advocates the importance of an inclusive environment so that “everyone’s skills are leveraged” – a key element to realising the benefits of diversity. After all, there’s little value in having a diverse workforce if the organisational culture dictates that everyone needs to look, think and act the same.

In the 2013 Diversity and Inclusion Study by Korn/Ferry Institute, Futurestep and the Diversity Council of Australia (DCA), more than 50% of Australian and New Zealand businesses surveyed identified themselves as being at a ‘foundation’ or ‘compliance’ stage of their diversity and inclusion strategy.

However, pleasingly the survey also identified a strong future focus on ‘Managing inclusion – leadership capability’, indicating that leaders are now understanding their role in the realisation of diversity and inclusion strategies.

Which begs the question – are you encouraging diversity by recognising the accomplishments, working style and skills of a variety of people? Or do you find yourself recognising the same people and same types of things over and over again?

The business case for diversity

It’s a good indication that something is a worthwhile investment of time and money when some of the world’s leading business people take an active lead in the field. ‘Value diversity’ is one of the 10 key business and society challenges being tackled by the B Team, a not for profit group of nineteen global business and community leaders including Sir Richard Branson and Arianna Huffington.

The B Team see diversity as an “opportunity to create dynamic and successful organisations of the future, which better reflect the society we live in”, and their report Diversity: Bringing the business case to life outlines the positive feedback loop that results from successful execution of a diversity and inclusion strategy.

There’s also a strong body of evidence that demonstrates the business benefits that can be realised by successfully embracing diversity and inclusion. Research by Forbes Insights, McKinsey & Company, and Catalyst highlight that companies with higher percentages of gender or ethnic diversity are more likely to out-perform companies with lower percentages of diversity, and that advantages are achieved across a range of key business areas, including better financial performance and market share, increased innovation, improved business reputation and higher employee satisfaction.

Does diversity trump ability?

“People from different backgrounds have varying ways of looking at problems, what I call ‘tools’. The sum of these tools is far more powerful in organisations with diversity than in ones where everyone has gone to the same schools, been trained in the same mould and thinks in almost identical ways,” explained Scott E. Page, an American social scientist and Collegiate Professor from the University of Michigan, in an interview with the New York Times.

Page, along with Lu Hong, an economist at Loyola University, Chicago, constructed a formal model to mathematically demonstrate the effect of diversity of thinking. Their model showed that groups of diverse individuals outperformed groups of top performing individuals; that is “that diversity can trump ability” as Page surmises.

A diverse and inclusive organisation can also reap significant benefits in innovation within a business. Research undertaken by leaders from the Center for Talent Innovation, and outlined in the Harvard Business Review’s article How diversity can drive innovation, demonstrated that companies with diversity (as defined by their study) in their leadership teams reported significantly higher growth in market share and were far more likely to successfully expand into new markets.

Diversity within teams and companies is also an opportunity for competitive advantage when applied to help those designing, producing and selling the company’s goods or services to better understand their end users. A great example of this is toy company Mattel who, when they decided to launch a line of dolls aimed at the African-American market, enlisted the involvement of their African-American employees as consultants to guide and review each step of the development. By seeking input from representatives of their target market, Mattel produced a culturally sensitive product that went on to become one of their best-selling minority-focused collections.

Last, but certainly not least, effective diversity and inclusion strategies can positively influence employee engagement. Catalyst’s Why diversity matters research shows that positive employee perceptions of a company’s diversity climate result in lower intent to leave. Further to this, managers who demonstrate inclusive leadership achieve higher performance and lower turnover of staff through their approach of treating everyone as an individual, while maintaining fairness.

How to support and encourage diversity in the workplace

Being able to and having the opportunity to recognise that each individual brings with them a set of gifts and tools that are valuable to your organisation is critical for creating a business environment where diversity and inclusion is the norm. Be wary of the unconscious bias in both yourself and your people if the same people are behaviours are being recognised or rewarded, without sight of those who may approach a situation or project differently, and are still creating a positive impact.

This, in part, begins with ensuring diversity and inclusion is part of your overall business and people strategy, and these goals are both clearly communicated and rewarded. In order to this, you need to invest in leadership and management capability in these areas, and engage the leaders who truly believe in the value of diversity so they become your public champions.

At an individual level, check yourself first, and reflect on whether you are setting an example with your own leadership behaviour. Do you open dialogue, and give equal airtime to those who may not always carry the traditional opinion or approach in a meeting. If you truly want to encourage innovation, then out-of-the-box thinking needs to be encouraged.


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