Diversity, Inclusion and Belonging (DI&B) has always been an important topic, for reasons ranging from corporate social responsibility to regulatory compliance. But, ultimately, embracing diversity is key to maintaining a healthy business, fueling growth and profitability.
Diversity by the numbers
According to a McKinsey study, companies within the top quartile for gender diversity are 21% more likely to have good financial performance than companies in companies in the bottom quartile, and are 27% more likely to have superior value creation (measured as economic profit margin). Additionally, companies in the top quartile for ethnic/cultural diversity on executive teams were 33% more likely than companies in the bottom quartile to have industry-leading profitability.
Diverse and inclusive organizations are better at attracting and retaining talent, as well as maximizing productivity. One study showed that 50% to 69% of professional Canadians of colour who felt “on guard” at work – anticipating and consciously preparing for potential bias or discrimination – showed high intent to quit. Moreover, a 10% increase in perceptions of inclusion reduces absenteeism, adding nearly one day a year in work attendance per employee.
The DI&B maturity model
A maturity model is a roadmap organizations use to assess a strategy or practice’s current effectiveness and determine what needs to be done to ensure that it sustainably and reliably produces the desired outcome.
The DI&B maturity model shows organizations moving forward through five levels: unaware, compliant, strategic, integrated and disruptive.
- “Unaware”: A company that has no policies in place and little desire to address DI&B.
- “Compliant”: A company that only does the bare minimum of what is legally required, with leadership abdicating responsibility solely to HR.
At these stages, you’re a “novice” DI&B practitioner, and you’ve made little to no progress on your DI&B strategies. Note that it’s alright to be a beginner – committing to building a diverse organization is the first step in the right direction.
- “Strategic”: A company that sees DI&B as critical to its success, with leadership taking responsibility and ownership of the strategic direction.
- “Integrated”: A company that has policies that reflect and reinforce the DI&B strategy and actively supports underrepresented groups.
If you’re at levels three or four, you’ve reached an “intermediate” stage. You’ve taken steps in your DI&B efforts, but there are still key initiatives and programs that you need to introduce to your organization and workforce. Additionally, leadership still needs to take full responsibility and educate themselves on DI&B.
- “Disruptive”: A company that ideologically supports DI&B and demonstrates leading corporate citizenship in this area. They are innovative and courageous in challenging the status quo.
Disruptive companies are at the “expert” stage. Their DI&B programs have visible and vocal support from leadership. They have formalized and integrated accountability and measurement into decision-making and talent processes. They’ve enabled awareness and development through learning and growth opportunities. And, finally, they’re implementing a DI&B strategy through internal programs and external partnerships.
Steps to take towards a more diverse and inclusive company
It takes analysis, reflection, planning and commitment to create and implement a successful DI&B strategy and advance to the next level. Now that you know where you stand, you can take critical steps to help ensure you continue to advance.
How to advance from the Novice stage:
Start by soliciting buy-in and commitment from key stakeholders. CEOs have proven to play an important role in changing or maintaining corporate culture, but so does front-line management. Over a quarter of employees at large companies do not feel that their direct manager is committed to diversity and inclusion initiatives, which can weaken these efforts.
Then, assess your organization’s current landscape. Set DI&B goals that align with the values, vision and mission of your organization and break them down into realistic objectives and tasks to work toward, including metrics and methods of accountability.
How to advance from the intermediate stage:
Since culture change starts at the top, you’ll need to create policies and behavioural standards for all employees of the business and hold leaders accountable for results. For example, Scotiabank ties short-term incentive performance pay for the CEO to improvements in the diversity of its leadership. Scotiabank’s vice president and above leadership group is now made up of 35% women globally (39% in Canada). This contrasts with the fact that, in 2020, women held only 7% of all executive positions at Canada’s 100 largest publicly traded corporations.7
How to advance from the expert stage:
Even experts still have room to learn and grow. DI&B is a process, not a destination. These practices can help you improve what you’ve already built:
- Hire, retain and develop diverse talent and leadership.
- Train developing leaders to be inclusive.
- Create unbiased talent management processes and a sustainable DI&B model.
- Be open and transparent about this process by creating an externally facing scorecard to measure progress.
Lagging and leading at the leadership level
While diversity at all levels of an enterprise is the ideal, it’s difficult to achieve a diverse leadership without a diverse workforce. To understand this, we need to understand lagging KPIs and leading KPIs. These are the inputs (leading KPIs) that create the current result, which you can tweak to create the output (lagging KPIs) you desire.
One such input is talent and the environment in which talent works. Fostering a culture of inclusion can ensure that your company retains diverse talent so that those individuals can one day rise to leadership roles.
To help improve the input of talent to cultivate the output of a more diverse leadership group, the CI Financial Corporation revamped its Women in Leadership mentorship program in 2019 to include an extended mentorship period as well as a more in-depth matching process to pair promising candidates with seasoned mentors from CI’s leadership team. This program has been so successful that other mentorship programs within the company are beginning to implement an extended mentorship program as well.
With these practices in mind, you’ll be better prepared to build the diverse workforce your company needs. These initiatives take time and effort, but their success can be a victory for both ethical business practices and your bottom line.
