To complete this assignment, pick any private organization/business of your choice, which has a diversity and inclusion statemen

From diversity to inclusion: Move from compliance to diversity as a business strategy – Dupress

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The world has become highly diverse, but many companies have not—especially when it comes to combining diversity with the inclusive culture needed to truly drive value.

WRITTEN BY

Juliet Bourke, Christie Smith, Heather Stockton & Nicky Wakefield

PUBLISHED

March 7, 2014

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Many organizations promote diversity while struggling to fully leverage the business benefits of a diverse workforce.

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Nearly one-third of respondents to the Human Capital Trends global survey say they are unprepared in this area, while only 20 percent claim to be fully “ready.”

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In a recent study, 61 percent of employees report they are “covering” on some personal dimension (appearance, affiliation, advocacy, association) to assimilate in their organization.

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From diversity to inclusion

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In 2014, promoting diversity is an expected commitment; like workforce safety, it’s now a ticket

to play. And while unwavering support is claimed, far fewer organizations can talk to the

benefits of diversity beyond the attraction of talent and reputation. Why is that? Surely a focus

on diversity is the way to uncover and optimize talent? Is it focus, effort, a failure to move

diversity from the fringe to the center, or level of difficulty?

One clear factor, according to our global survey, is that only one company in five (20 percent)

believes it is fully “ready” to address this issue. The gap between the urgency of this trend and

companies’ readiness to address it is particularly wide in Japan, South Africa, and China (figure

1).

Why are so many companies falling short? One view is that many companies still treat diversity

primarily as a matter of compliance—a regulatory box to be checked. Not enough organizations

take the next essential steps of creating a work environment that promotes inclusion in all its

variations. Taking a step back from individual organizations to a more country-based analysis,

we can see that most countries do not have a strong sense of readiness and most hover around a

medium sense of urgency.

Using this lens, we see two major themes emerging that can help companies transition from

simply meeting minimum regulatory requirements for diversity to building an inclusive

workplace that inspires all employees to perform at their highest level:

Leading companies are working to build not just a diverse workforce, but inclusive workplaces, enabling them to transform diversity programs from a compliance obligation to a business strategy.

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1. Diversity of thinking as a business imperative

2. A focus on inclusion as well as diversity itself

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Explore the report findings Launch the interactive trends dashboard

Diversity of thinking as a business imperative Organizations can start by broadening their understanding of diversity to focus not only on the

visible aspects of diversity, such as race, gender, age, and physical ability, but also diversity of

thinking. This means deriving value from people’s different perspectives on problems and

different ways to address solutions. It’s a complex world, it’s a global world, and maximal

participation is required from every workplace participant from the bottom to the top. Thinking

of diversity in this way helps organizations to see value and to be conscious of the risk

associated with homogeneity, especially in senior decision makers. And this means that diversity

is no longer a “program” to be managed—it is a business imperative.

Uncovering talent: A new model of inclusion An importance advance in thinking about inclusion is the recent work on “uncovering talent”

from Kenji Yoshino, at NYU Law School, and Christie Smith, the head of Deloitte University’s

Leadership Center for Inclusion. Their research suggests that current inclusion initiatives often

implement formal inclusion (that is, “participation”) without recognizing how that inclusion is

predicated on assimilation. In response to pressures to assimilate, individuals downplay their

differences. This behavior is referred to as “covering” and can include how individuals behave

along four dimensions:

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Appearance: Individuals may blend into the mainstream through their self-presentation,

including grooming, attire, and mannerisms.

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Affiliation: Individuals may avoid behaviors widely associated with their identity,

culture, or group.

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Advocacy: Individuals may avoid engaging in advocacy on behalf of their group.v

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Yoshino and Smith’s research reports that covering behaviors are widespread, costly to

individuals and their organizations, and often misaligned with values of inclusion. Organizations

should be interested in covering not because they are “playing defense” against lawsuits, but

because they are “playing offense” to create a more inclusive culture over and above legal

compliance. Most Fortune 500 companies are seeking to create that kind of culture.

Linking diversity of thinking and inclusion Bringing these two themes together—diversity of thinking and inclusion—we suggest that

organizations consider the importance of diversity when it comes to meeting specific business

objectives:

Association: Individuals may avoid associating with individuals in their own group.v 4

Accessing top talent: Companies should recruit top people from a globally diverse

workforce. The importance of leadership pipelines, the No. 1 priority in our global trends

survey, underscores the importance of broadening leadership pipelines and accelerating

the development of diverse leaders. Given the transparency of the employment “brand”

today, in order to attract the best people, organizations must create a diverse workplace.

When candidates research a prospective employer online, interact as customers, or

interview with the company, they have to feel as if they would “fit” into the work

environment.

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Driving performance and innovation: A significant body of research shows that

diverse teams are more innovative and perform at higher levels. Companies that build

diversity and inclusion into their teams reap the benefits of new ideas, more debate and,

ultimately, better business decisions.

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Retaining key employees: One reason people leave organizations is that they feel they

no longer “belong.” Or perhaps they feel they will “belong” and thrive in another

organization that appreciates their unique value. A company that fails to create a diverse

and inclusive workplace risks alienating or excluding key employees, who are then more

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Diversity is the measure: Inclusion is the mechanism What this all adds up to is that high-performing organizations recognize that the aim of diversity

is not just meeting compliance targets, but tapping into the diverse perspectives and approaches

each individual employee brings to the workplace. Moving beyond diversity to focus on

inclusion as well requires companies to examine how fully the organization embraces new ideas,

accommodates different styles of thinking (such as whether a person is an introvert or an

extrovert), creates a more flexible work environment, enables people to connect and collaborate,

and encourages different types of leaders.

While nearly one-quarter of executives (23 percent) believe their companies have done an

“excellent” job creating a culture of inclusiveness, and defining what it means (24 percent), the

overwhelming majority rate their effort as “adequate” or “weak.” Clearly, there is much more to

be done to turn the vision of diversity and inclusion into a daily reality (figure 2). Much more

than a focus on programs, this effort needs to focus on cultural change: behaviors, systems and

symbols, and an explicit understanding of the extent and causes of “covering” in organizations.

Research by Deloitte Australia shows that high-performing organizations are characterized by

likely to disengage or eventually leave the organization.

Understanding customers: There’s a thin line between customers and employees, with

current and former employees purchasing their companies’ products and services, acting

as advocates, and sensing customer needs. How better to understand and respond to

diverse customer needs than by tapping into diverse employees? From where we sit, this

is one of the most significant gaps in the diversity story, with the breadth of ideas and

experiences from a more diverse front line falling by the wayside as decisions are made

by more distant, homogenous teams that sometimes fail to fully include diverse

perspectives. In a broad range of industries—including retail, hospitality, food service, oil

and gas, insurance, and even banking—a diverse workforce creates opportunities to

appeal to a more diverse customer base.

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their commitment to diversity and a culture of inclusion. In the areas of customer service,

innovation, safety, and more, the message from employees is the same: Organizations that

support diversity and that also make employees feel included are much more likely to meet

business goals than those organizations that focus on diversity and inclusion in isolation (or

focus on neither). The question is, how do you get there?

One essential component of building a strategy of inclusion is recognizing the biases in the way

each of us receives and processes information and the historical biases in our systems of work.

Addressing these processing biases is critical because leaders—as they themselves feel high

levels of inclusion—often do not understand levels of alienation in an organization. Given the

critical importance of retention in our survey, inclusion becomes a key strategy for success.

LESSONS FROM THE FRONT LINES ADOPTING DIVERSITY AND INCLUSION TO SOLVE A DEMOGRAPHIC MISMATCH BHP Billiton’s marketing division was highly diverse in terms of gender and ethnicity in non-

executive positions, but there was a demographic mismatch between the global talent pool and

the company’s senior team.

Mike Henry, the president of health, safety, environment, and community, marketing, and

technology, observed this misalignment. He concluded that the only reasonable explanation was

an unconscious bias within the organization and a tendency to do things as they had always been

done—particularly the fact that leading talent was primarily sourced from BHP Billiton’s

traditional hiring bases in Australia, the United Kingdom, North America, South Africa, and the

Netherlands.

Following the closure of BHP Billiton’s marketing office in The Hague—a traditional hub for

recruiting and developing marketing executives—Henry decided to take action to prevent

narrowing the leadership pipeline even further.

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With strong support from the CEO, Henry began seeking out broad-based leadership engagement

and took steps to understand BHP’s unconscious biases. He led by example, taking the Harvard

Implicit Association Test and sharing the results with his team. He aimed to prove his

commitment to diversity and inclusion and show that he could only mitigate his own

unconscious biases by being aware of them first.

Next, Henry had BHP Billiton’s marketing organization conduct an inclusive leadership program

for its top 150 leaders, which included measuring perceptions on diversity and inclusion. The

program involved interactive workshops, storytelling, videos, self-paced activities, homework,

coaching, and reading, all designed to help leaders shift their mindsets and behaviors. And it

broadened the conversation from one about diversity to one about diversity and inclusion, from

demographics to diversity of thinking, and from compliance to business imperative. To help take

this from a program to a sustained focus of attention, Henry appointed a full-time diversity and

inclusion manager to implement change. During a time of downsizing, this was a potent symbol

of the value he placed on diversity and inclusion.

These steps yielded several notable results. Nine months after the first leadership intervention,

88–94 percent of leaders reported that they understood what they needed to do, that they had

changed their behaviors, and that they knew they were accountable for change. Critically, 72–76

percent of staff agreed that their leaders were behaving differently—that is, more respectfully and

inclusively—and that their teams were now more collaborative. In 2013, the program was

expanded to include all leaders and all staff, which was a huge investment of time and energy.

Mindsets have shifted, and while employee statistics have been slow to change, the 2013 results

of BHP Billiton’s marketing organization’s annual “inclusion index” diagnostic reveal that

representation of women and talent from outside the companies’ traditional hiring bases has

increased at leadership levels—a trend that has continued year on year since the first diagnostic

was run in 2011.

WHERE COMPANIES CAN START Many organizations have not put enough effort into understanding what makes people feel

included. Do employees feel they are known and valued as individuals? Are they well-connected

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to other people in the organization? Are they given a voice in decision making? Is there an

understanding of the types and extent of covering in the organization (appearance, affiliation,

advocacy, association)? In addition to examining these fundamental questions, companies

looking to build a more inclusive workplace should consider the following steps:

BOTTOM LINE

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Create inclusion labs to help educate leaders about unconscious bias and covering

behaviors: Encourage leaders to honor other people’s opinions and promote constructive

debate. Understand covering biases and behaviors and approaches to changing them.

Leadership drives inclusion; the process should start at the top.

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Embed diversity and inclusion in leadership pipelines and programs: Include the

diversity and inclusion initiative in leadership development programs, new manager

programs, and talent acquisition programs. Give particular focus to supporting diversity

of thinking—for instance, by selecting people from diverse backgrounds for leadership

development.

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Conduct a gap analysis of talent systems and processes: How is the principle of merit-

based decision making transparently embedded into systems, from recruitment,

remuneration, and training to career development opportunities and succession? Review

the outputs of these decisions in terms of equity, such as via a pay equity audit.

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Develop a diversity and inclusion scorecard and measure business impact: Hold

leaders and managers accountable and identify outliers in the diversity and inclusion

initiative.

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Install governance and resource the effort appropriately: Create a council with

representatives from different parts of the business that is properly resourced to be a

change agent.

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WRITTEN BY

Juliet Bourke Deloitte Consulting Pte Ltd

Juliet Bourke leads the Australian Diversity and Inclusion practice and co-leads the Australian Leadership practice. She has over 20 years’ experience in human capital and is an internationally recognized author and speaker on the workplace, cultural change, leadership, and diversity. Bourke is a member of the Australian firm’s diversity council and sits on the Australian School of Business’s HR advisory board.

Christie Smith Deloitte Consulting LLP

Diversity is not a program or a marketing campaign to recruit staff. Thinking of diversity in this way relegates it to its compliance-driven origins. A diverse workforce is a company’s lifeblood, and diverse perspectives and approaches are the only means of solving complex and challenging business issues. Deriving the value of diversity means uncovering all talent, and that means creating a workplace characterized by inclusion. Our research shows that most organizations are not there yet, but change is in the wind, and market leaders are starting to move from compliance to inclusion as a business strategy.

Endnotes

Kenji Yoshino and Christie Smith, Uncovering talent: A new model of inclusion, Deloitte

Development LLC, December 6, 2013, http://www.deloitte.com/assets/Dcom-

UnitedStates/Local%20Assets/Documents/us_LLC_Deloitte_UncoveringTalent_121713.pdf. Back to

article

1.

View all endnotes s

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Christie Smith has spent the last 24 years consulting, focusing on aligning business strategy with organizational structure, talent, leadership development, and global workforce planning. She recently drove the formation of Deloitte’s collaboration with the California Institute for Quantitative Biosciences (QB3) to spur bioscience innovation and convert that innovation into a catalyst for jobs, companies, and better health. Smith is one of Diversity Journal’s 2013 “Women to Watch.”

Heather Stockton Human Capital leader Deloitte Canada

Heather Stockton is global Human Capital leader for the financial services industry. She is a member of the board in Deloitte Canada and chair of the talent and succession committee. Through her work in developing and executing strategic plans, Stockton has become an advisor to executives who are undertaking business transformation, merger integration, and changing their operating model. She has extensive experience in talent strategy and leadership development for leaders and boards.

Nicky Wakefield Human Capital leader, Deloitte Southeast Asia Deloitte Touche Tohmatsu

Nicky Wakefield is an experienced leader and advisor working primarily on large-scale, complex transformation programs. She started her career in consulting in 1995 after completing her MBA in organizational strategy and change. Educated as an economist, Wakefield transitioned to human capital after beginning a diploma in psychotherapy and developing a real passion for human performance. She has lived and worked in Australia, the United States, Singapore, Brunei, Zimbabwe, England, and the Netherlands.

ACKNOWLEDGEMENTS

Contributors: Stacia Garr, Jackie Scales

From diversity to inclusion: Move from compliance to diversity as a business strategy Published March 7, 2014

Cover Image by Alex Nabaum

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From diversity to inclusion: Move from compliance to diversity as a business strategy – Dupress

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From diversity to inclusion: Move from compliance to diversity as a business strategy – Dupress

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From diversity to inclusion: Move from compliance to diversity as a business strategy – Dupress

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From diversity to inclusion: Move from compliance to diversity as a business strategy – Dupress

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From diversity to inclusion: Move from compliance to diversity as a business strategy – Dupress

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From diversity to inclusion: Move from co

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