As is to be expected, leaders are further along in their Diversity & Inclusion (D&I) journey than the average respondents in this survey. However, while they may have a better foundation from which to build, there is a significant upside to adopting a more structured approach based on international standards.
Most leaders(1) believe a more diverse company is also a better performing company (80.5% vs the 60.1% average). D&I is largely part of the companies’ priorities, commitment is high and as many as 60% (vs. 31.7%) indicate D&I as business critical. But what is driving their journey and how far have they really come?
Leaders apply D&I primarily to improve company culture, employee commitment & engagement, and communication. More purely business-focused drivers, such as to increase innovation and strengthen customer relationships, get a lower score. While the numbers are 20 percentage points higher than the average, higher scores could have been expected given the importance placed on business by leaders. This emphasizes that, even for leaders, organizational and cultural aspects still tend to drive the agenda.
D&I is an integral part of leaders’ business strategy, but does strategy translate into tangible policies? While 72.9% (vs. 41.8%) do have principles & objectives included in company policies, it is slightly concerning that only 57.6% (vs. 36.8%) have accountabilities & responsibilities spelled out. On a positive note, D&I seems largely to be anchored with top management, while accountability primarily sits with the HR Director (52.9%) or Chief Executive Officer/Managing Director (36.8%). Placing ownership and accountability with the top management is critical to advance on any topic. It emphasizes its importance and facilitates the implementation of actual actions.
While most leaders have defined specific actions in their policies, less than half have mapped opportunities & risks. When asked in general what may prevent a company from succeeding, leaders state that companies which ignore D&I run higher risks from both an internal and external perspective. This is especially true in the business dimension, where a loss of productivity, weakened customer relationships and a decreased market share are highlighted.
Leaders have implemented a broad range of initiatives on a larger scale than the average sample, with to recruit diverse candidates (73.6% vs. 38.6%) and provide fair access & equal opportunity for workforce mobility topping the list (70.1% vs. 35.6%). Setting Key Performance Indicators (KPIs) and metrics to evaluate the effect and contribute to set objectives is essential in order to know what works and what initiatives to scale. It is very positive to see that 45.9% (vs. 20.3%) of leaders have set quantitative and qualitative measures. A total of 38.4% (vs. 16.2%) have set KPIs.
Given this picture, it is not surprising that more leaders derive benefits. This is especially true for business-related aspects, such as new business opportunities, increased innovation and strengthened customer relations. It supports the notion that leaders are farther ahead in connecting D&I to business value.
The logical next step is for leaders to truly integrate D&I into their core business and advance, applying a structured approach based on an international best practice or standard. Only 22.2% (vs. 30.8%) see the lack of a structured approach as a challenge. However, only 8.3% are very familiar with D&I standards such as ISO 30415. This number increases to 34.5% if those indicating some familiarity are included. Nevertheless, this seems to be a large unchartered area even for most leaders.
Leaders do not see a lot of barriers to progressing on D&I and almost half point to conducting a self-assessment as an action that would support performance improvement. This is positive in the sense that it indicates a readiness to understand gaps, which is an important first step in a structured approach.
Leaders expect D&I to rise on the agendas of customers and other stakeholders in the next two-three years. It remains to be seen if it will be perceived as more business critical in the future. However, there is no reason to believe it will fall on corporate agendas. Whether looking at it from an internal or external perspective, a move towards a reality in which D&I increasingly becomes central to a company’s culture, employer branding, employee engagement, increased innovation, high-performing teams and business operations can be expected.
(1) Definition of Leaders: in this survey, leaders are defined as those who indicated that D&I is part of their company’s overall business strategy and self-assessed implementation maturity as leading or optimizing. Leaders represent 15.3% of the total sample in this ViewPoint survey.