What is diversity, equity & inclusion (DE&I) & why is it important?
Diversity, equity, and inclusion (DEI) are values that help create fairer, more accessible workplaces for all. By acting on DEI values, organizations can support individuals of different ethnicities, religions, abilities, races, sexual orientations, gender, political perspectives, and backgrounds. The result? A more inclusive workplace.
Businesses have recently placed greater emphasis on Diversity, Equity, and Inclusion (DE &I), and rightly so. More than a strategic move for profit, embracing DE &I has become a testament to responsible and ethical business practices. In fact, research suggests that organizations that champion DE &I tend to be more productive, innovative and perform exceptionally well. They even demonstrate better growth and profitability. However, beyond these beneficial outcomes, it’s the commitment to fostering a work environment that respects and values diverse voices and perspectives that truly signifies the evolving ethos of the business landscape.
Adopting DEI values in your workplace requires more than simply saying you’re going to embrace DEI. Actions need to back up the words. This guide provides a primer to DEI, explaining what the term means and how you can enact it in a real, impactful way in your organization.
What is DEI?
DE&I means creating a workplace where the values of diversity, equity, and inclusion are put into practice — so that everyone feels welcome and respected, regardless of their background, race, physical ability, ethnicity, gender identity, sexual orientation, or religion.
If you’re wondering what DEI looks like in practice, check out what some big-name companies are up to. For example, Sodexo, a global giant, has implemented LGBTQ+ employee and ally networks in its offices worldwide. Johnson & Johnson has similarly implemented Employee Resource Groups designed to nurture inclusive environments. The company has also instituted a chief diversity officer (CDO).
Financial Services company Mastercard is another noteworthy case. They’ve established Business Resource Groups to represent diverse communities and their allies. They also extend inclusivity to their customers. For example, with Mastercard’s True Name program, transgender people can have their true name on their Mastercard without a legal name change.
Dimensions of DEI
Many perceive Diversity, Equity, and Inclusion as a single, unified concept. However, in order to foster a truly inclusive environment, it is critical to examine the individual facets of each element.
- Diversity is about representing and appreciating individuals of different backgrounds, identities, and experiences (including varied races, sexual orientations, and religions).
Diversity prioritizes representation of groups systemically and/or historically underrepresented, such as minorities. Diversity in the workplace begins with the hiring process — for example, encouraging individuals from underrepresented groups to apply for a role.
- Equity involves recognizing that certain groups are disadvantaged due to historical and systematic patterns of oppression. It’s about supporting and promoting these groups in the interest of creating a fair playing field.
Equity might involve redistributing resources and power. An example could be policies that create more equitable executive power structures, like ensuring sufficient LGBT+ representation in executive leadership.
- Inclusion is a state of belonging where all types of people are made to feel valued and welcomed, regardless of sexual orientation, ethnicity, race, etc.
Inclusion in the workplace is about creating an environment that allows different groups to thrive. For example, it could involve creating competitive advantages, like instituting mentorship programs for historically oppressed groups.
Why is diversity, equity, and inclusion important?
DEI creates tangible benefits for individuals and businesses. We mentioned some business facts, like the potential for DEI to boost performance and up the bottom line. However, DEI’s importance isn’t just about the numbers.
Here are some ways careful attention to and implementation of DEI values can serve your business:
- Improved innovation. When you bring together people who share similar life experiences and identities, you’ll get a limited point of view. By bringing together people from different backgrounds with unique perspectives, your organization can experience greater creativity, leading to more innovative ideas. Companies with greater diversity produce a greater proportion of revenue through innovation.
- Smarter decision-making. Similarly, when you have more diverse talent at the table, you benefit from greater insights when it comes to making decisions. By giving everybody a chance to contribute their ideas, your organization can make choices that are in the interests of all involved. Research reveals that diversity usually leads to better decision-making.
- Better employee satisfaction. Decision-making that takes into account diverse perspectives also ensures those diverse perspectives are represented. This can help improve employee engagement and satisfaction, increasing the likelihood that everyone’s needs are met. By including workers in decisions, you’ll also help them feel valued, which can reduce turnover. According to Gallup, engaged employees are more likely to stay with an organization.
- Enhanced customer or client relationships. As a business, your customer base is made up of diverse groups. When the diversity of your organization reflects the diversity of your customer base, you’ll be able to better understand your customers’ needs and wants. The result? More satisfied consumers.
- Improved brand reputation. Inclusive organizations are more likely to attract and retain top talent. When you create a culture of belonging in the workplace, you don’t risk alienating potential hires because of worries regarding exclusion. That good reputation extends to customers too, as attention to DEI boosts an organization’s reputation.
Challenges of achieving DEI
DEI is clearly beneficial. However, it’s not always easy to implement. Getting diversity and inclusion right requires not only setting policies but also finding ways to implement those policies in a meaningful way.
The first step is identifying potential hurdles to achieving DEI, such as:
- Unconscious bias. We often tend to favor people who are similar to us, even without meaning to. Unfortunately, unconscious bias can cause us to discriminate against people who are different from us. For example, a senior leader might be more likely to promote an individual who shares their background in terms of race and education than one who doesn’t (even without realizing it).
- Lack of diversity in leadership. Organizations overwhelmingly led by people from one background might be less open to new ideas or perspectives from people from other backgrounds. A lack of diversity in leadership can become deeply ingrained due to unconscious bias. Consider the above example — if leaders exercise unconscious bias and only hire others similar to them, the diversity issue is compounded.
- Lack of resources. DEI requires more than hammering out some well-intentioned values or goals on a piece of paper. To implement DEI initiatives, companies need to institute training, workshops, and other programs. For example, they might start mentorship initiatives or town hall meetings focused on DEI.
Strategies for achieving DEI in the workplace
Breaking down DEI into actionable tips can help realize DEI values in action, not just in principle. We offer some ideas to inspire you.
However, you’ll need buy-in from both executives and employees at all levels for these initiatives to work — and patience is required. You can’t expect overnight results. Still, these tips are a great starting point.
Hire a chief diversity officer (CDO)
You need someone to develop, manage, and monitor your DEI strategy. Hiring a CDO can help. This individual can help hold your organization accountable when it comes to battling inequity, ensuring your DEI program has concrete goals, and monitoring the success of your various DEI efforts.
A CDO is a fairly new role, so you might wonder how to hire one. Relevant competencies include strategic thinking, change management experience, and a high level of cultural and emotional intelligence. DEI professionals should also be stars at relationship building.
Create a diversity and inclusion statement
A DEI statement helps define your DEI-related values and goals while building trust within your organization — and between your organization and the broader public. Check out examples of DEI statements from Adobe, Spotify, and Nike to get an idea of what they are.
When writing your DEI statement, define what DEI means to your business, how DEI relates to your business’s mission and values, and why DEI is important to your business. Then, back it up with concrete facts. Outline the DEI initiatives or actions, current or future, that you’ll implement to realize the values you’ve outlined.
Develop inclusive policies and practices
Based on your DEI statement, you can determine the policies and practices you’ll promote to make it a reality. These initiatives should support nondiscrimination, promote equal opportunities, and encourage inclusivity at all levels, junior and senior.
Examples of DEI efforts could include creating a framework for unbiased performance evaluations, committing to more diverse hiring, and allocating resources to eliminate disparities. For example, you can combat unconscious bias in hiring through internship and traineeship programs for underrepresented groups.
Provide training on unconscious bias
Different groups of people have different forms of unconscious bias. For example, white people may have an unconscious bias toward people of color. For an inclusive culture, you need to address these unconscious biases. Workshops and seminars that help educate about unconscious bias can help.
One useful tool is implicit association tests (IATs). IATs measure a person’s associations and stereotypes that impact their evaluations of others. They unveil hidden bias. IAT and other forms of unconscious bias training can’t fix bias overnight, but they help raise mental awareness and make people question the snap judgments they make.
Create a culture of belonging
A work environment with a culture of belonging is one where everyone feels free to be themselves. One way to make this happen is to encourage everyone to share their ideas and perspectives. This goes beyond work-related topics. Encourage people to be vulnerable and share personal stories to create a sense of belonging.
Feedback loops are also critical to creating a workplace culture that prioritizes belonging. You don’t want employees to get caught up in negative feedback, or they’ll feel they have to squash who they really are. Make sure to provide positive feedback loops and praise what people are doing right.
Measure and track progress
You can track DEI initiatives in several ways. Start with quantitative metrics: You might assess a diverse workforce in terms of the number of traditionally marginalized groups. What percentage of women are in leadership roles? How racially diverse is your workforce? How about LGBTQ+ demographics?
You can get a lot of this data from your HR systems, examining everything from hiring to retention. You can also use qualitative measures, for example, by having employees take part in surveys or focus groups. This allows you to identify areas in need of improvement, so you can continue to enhance your DEI commitment.
Examples of successful DEI initiatives
A look at organizations that have successfully implemented DEI initiatives can inspire you to get started. Here are some examples of companies blazing the trail ahead in DEI:
- Sodexo. Sodexo’s DEI initiatives — like committing to gender parity in executive leadership — are reaping rewards. Bloomberg’s Gender Equality Index has recognized the company, thanks to 54% of its board of directors and 37% of its executive committee being women. Since embracing DEI, Sodexo has thrived. In Q1 2023, the company reported growth of +20.2%.
- Cisco. Cisco exemplifies how a company can turn around its image with DEI. Once sued for a lack of diversity, the company subsequently committed to DEI, focusing largely on leadership roles. Since then, Cisco has been recognized as a great place to work for women, diverse individuals, and parents. Cisco’s Q1 2023 revenue was $13.6 billion.
- Marriott. The hospitality behemoth has repeatedly been recognized by Forbes as a leader in employer diversity and has been named as a Great Place to Work for 24 years in a row. The company’s commitment to DEI appears to be paying off, with Q1 revenue up 34.3% worldwide compared to the same period the previous year.
Diversity, equity, and inclusion FAQ
DEI is a huge topic. These frequently asked questions address some of the most important questions you may have.
How can my organization communicate its commitment to DEI to internal and external stakeholders?
For DEI initiatives to succeed, you need buy-in from senior executives and junior employees alike. Communicating your initiatives internally is a first step. Share your DEI statement. If you’ve hired a CDO officer, make sure everyone is aware. Finally, communicate what initiatives you’re implementing internally.
You can also share your commitment to DEI externally. Add a section on your corporate website dedicated to your DEI strategy. Communicate major changes, like hiring a CDO, publicly through press releases or other media. Also, spread the word on internal and external DEI programs.
What resources or tools are available to assist my organization in implementing DEI?
Plenty of resources can support your organization in your DEI journey. For example, Harvard has an IAT you can access for free online. Meanwhile, the University of Southern California has a diversity toolkit that includes exercises teams can do to address bias. External consultants can also help implement DEI initiatives.
How can my organization address intersectionality within its DEI initiatives?
A person’s identity doesn’t consist of just one thing, like their gender or race. Intersectionality refers to the framework used to understand the ways a person’s many political, social, and other identities impact them, and the ways they might be privileged or discriminated against in the world.
DEI initiatives need to consider intersectionality. For example, it’s one thing to say, “We want to promote more women” and another thing to say, “We want to promote more women of color.” Intersectionality in DEI requires implementing multiple initiatives that promote diverse individuals in all their facets.
Lead your company through diversity and inclusion
Through Diversity, Equity, and Inclusion (DEI) we are able to foster a more equitable work environment where all people feel welcome and valued regardless of their race, physical ability, ethnicity, gender identity, sexual orientation or religion. Implemented with care and understanding, DEI serves as a catalyst for innovation, increasing employee satisfaction, paving the way for business decisions and even driving growth and profitability.
At IMD we offer practical advice on how to integrate DEI into the core of your organization, from appointing a Chief Diversity Officer to formulating an authentic DEI statement. The role of education is undeniable and profound in the pursuit of a more inclusive world. IMD’s leadership programs are designed with this in mind – to shape leaders who are not only DEI -aware, but also prepared to effect positive change. Find out more and join us in creating an impact.