{"id":12089,"date":"2022-10-21T10:12:48","date_gmt":"2022-10-21T15:12:48","guid":{"rendered":"https:\/\/flevy.com\/blog\/?p=12089"},"modified":"2022-11-29T13:06:15","modified_gmt":"2022-11-29T18:06:15","slug":"business-case-for-diversity-and-inclusion","status":"publish","type":"post","link":"https:\/\/flevy.com\/blog\/business-case-for-diversity-and-inclusion\/","title":{"rendered":"Business Case for Diversity and Inclusion"},"content":{"rendered":"

\"\"<\/p>\n

Diversity and Inclusion are 2 interlocked ideas.\u00a0 However, they are anything, but interchangeable.\u00a0 Managing Diversity and Inclusion (D&I)<\/a> involves actions beyond policies, programs, or headcounts.<\/p>\n

Diversity pertains to representation of races, ethnicities, and other minority groups in an entity or in other words the make-up of an organization.<\/p>\n

Inclusion represents the degree of value given to inputs, existence, and viewpoints of various groups of people and the extent of their integration in a setting.<\/p>\n

There are many benefits of Diverse and Inclusive workplace such as better revenue growth<\/a>, more innovative capability<\/a>, enhanced capacity for recruiting a diverse talent pool, greater employee retention<\/a>.<\/p>\n

Maintaining an Inclusive workplace culture not only assists in enticing a diverse group of talent but also aids in keeping the diverse talent enticed in the first place.<\/p>\n

Diversity matters in the overall business performance of today<\/a>.\u00a0 So does Inclusion of diverse points of view.\u00a0 Inclusion seems to have a positive impact on the bottom line, as indicated by data coming out of a long-term study conducted by global consulting firm McKinsey.<\/p>\n

Trajectories of 100s of large companies have been followed by the research since 2014.\u00a0 It tracks Ethnic and Cultural Diversity, as well as Gender based Diversity.\u00a0 More than 1,000 large companies from 15 countries were included in the 3rd<\/sup> analysis, the largest data set by far.\u00a0 Report based on this data set was titled \u201cDiversity Wins\u201d (2019).<\/p>\n

Most recent data points to the following 6 key areas of focus that affect performance positively or negatively:<\/p>\n

    \n
  1. Gender Diversity on Executive Teams leads to stronger performance.<\/strong><\/li>\n
  2. Progress in Gender Diversity in Boards is slow.<\/strong><\/li>\n
  3. Women representation low on executive teams all across the studied countries. <\/strong><\/li>\n
  4. Executive teams with more women perform better.<\/strong><\/li>\n
  5. Female executive representation across big industries is slow.<\/strong><\/li>\n
  6. Business justification for Ethnic Diversity on executive teams is very strong.<\/strong><\/li>\n<\/ol>\n

    \"\"<\/a><\/p>\n

    As per the study findings, association between diversity on executive teams and the prospect of unsurpassed financial accomplishment is now even clearer than previously.<\/p>\n

    Let us delve a little more deeply into some of the findings.<\/p>\n

    1. Gender Diversity on Executive Teams leads to stronger Performance.<\/strong><\/p>\n

    Data has brought to light the fact that more representation increases the prospect of enhanced performance. \u00a0Businesses with 30% or more women on their Executive teams are considerably more likely to perform better than those with between 10-30% women.\u00a0 Companies with 10-30% women on Executives teams, in turn, will possibly outdo those businesses with fewer or no women executives.\u00a0 As a consequence of women representation, there is a significant performance gap of 48% amid the most and least gender-diverse businesses.<\/p>\n

    2. Progress in Gender Diversity in Boards is slow.<\/strong><\/p>\n

    Female representation on boards has risen from 21% in 2014 to 28% in 2019 in businesses located in the United States and the United Kingdom.\u00a0 Although this is progress but it is slow.\u00a0 Positive correlation between board diversity and financial outperformance had been seen in the 2014 data set, but it was not observed to be as significant as it has been in the new data set.<\/p>\n

    3. Women representation low on Executive Teams all across the studied countries.<\/strong><\/p>\n

    Data set of 2019 that includes 15 countries on 5 continents shows that advancement with regard to women representation on executive teams is slow in most countries.<\/p>\n

    Extremities are displayed in women representation where on one end is Norway with at least 1 woman on all executive teams in the studied businesses and countries like Brazil and India where 83% companies did not have a single woman.<\/p>\n

    Interested in learning more about the Business Case for Diversity & Inclusion (D&I)?\u00a0 You\u00a0can download\u00a0an editable PowerPoint presentation on Business Case for Diversity & Inclusion (D&I)<\/strong> here\u00a0<\/a>on the\u00a0Flevy documents marketplace<\/a>.<\/p>\n

    Do You Find Value in This Framework?<\/strong><\/h2>\n

    You can download in-depth presentations on this and hundreds of similar business frameworks from the\u00a0FlevyPro Library<\/a>.\u00a0FlevyPro<\/a>\u00a0is trusted and utilized by 1000s of management consultants and corporate executives.<\/p>\n

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