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  • Is Diversity a "Nice to have"?

Is Diversity a "Nice to have"?

03 October 2021

Perhaps it is an oversimplification, but there appear to be two groups of people when it comes to diversity and inclusion. The first group being those who believe that diversity and inclusion is a ‘nice to have’, and a second ‘need to have’ group, who are frustrated at the first group. Take a moment to let that sink in. Now let’s add some human nature; people want a shortcut. “So, we need more diversity. Okay, all we need to do is meet that quota.” But what if there was a path to greater revenue, profitability and innovation through diversity and inclusion? What if there was evidence to show that businesses following that path consistently outperform their sector peers?   

To find that path, we speak to Predixa; a specialist in helping businesses grow profitably through diversity and inclusion.

‘Nice to have’ versus ‘Need to have’

Let’s talk about these two groups. From our experience, the ‘nice to have’ group are motivated to meet demands from regulation or shareholders, but this can often mean paying mere lip service to enable them to achieve the financial benefits and market perception from a box-ticking exercise. Witness the numerous rating agencies providing external benchmarks that seem to encourage such box-ticking behaviour.

The ‘need to have’ are generally those that are driven by the passion of influential individuals or believe in doing ‘the right thing’ to create a diverse, equitable and inclusive workforce. This is all very laudable, but often diversity initiatives occur as isolated projects unconnected to the organizations’ overarching strategic priorities.

Oversimplifying this helps to draw out the extreme positions. There are those who have experienced the people and business benefits and have fully embraced diversity and inclusion as part of their DNA. A key insight from those that fully embrace diversity and inclusion is that they focus on their own internal benchmarking. This internal benchmarking is based upon taking the inputs of all employees in a structured way to identify the areas to make changes in and then see the impact of those changes over time. We will come back to this insight.

 What drives us to embrace Diversity and Inclusion?

In discussion with business leaders, the motivation to embrace diversity and inclusion can often be dependent on the internal leadership approach, organizational values, external industry sectors, geography, and regulatory requirements.

The forces driving diversity and inclusion commitment by organizations:
●          Shareholder demand
●          Need to increase sales/profit
●          Improving brand and reputation
●          Increasing successful innovation
●          Attracting and retaining talent
●          Social and political demands

These drivers have given momentum to change with more CEO’s committing to embrace diversity and inclusion, more HR leaders identifying diversity and inclusion as a top priority and greater demand for professionals in this field. Indeed, with this level of activity and resources being committed, it could be observed that the ‘Diversity and inclusion train’ has already left the station!

Why is the need for Inclusivity so important for effective Diversity?

The coming together of diverse people of different ages, gender, ethnicities, cultures, and abilities has always produced disruption and innovation. Think of the music we love; jazz, rock’n’roll, hip-hop - to mention just three – these have all evolved because of blending different cultural influences. The same is true for business. Diversity in a workforce brings different perspectives, ideas, and experiences, creating more resilient and effective organisations that outperform their less diverse peers.  

However, diversity on its own is not enough. It needs the support of an inclusive culture, where everyone feels valued, respected, accepted, and supported, allowing the collective diversity of thought to bubble to the top without recrimination. Innovation is the foundation of a resilient, successful business...therefore, diversity and inclusion are essential to drive continued innovation.

Whilst measuring demographic metrics such as ratios of women to men; nationalities; age represented; people with disabilities etc. are relatively straightforward, unlocking the potential of that diversity, optimised through an inclusive culture is more of a challenge.

As the saying goes, ‘we treasure what we measure’, but measuring the inclusivity of a workplace culture is not an easy task. To do this effectively, organisations need to tap into the sentiment of the workforce and bring out the intangible aspects - especially in the new hybrid workplace environment with colleagues regularly working from home, wherein feelings and opinions will change faster than the typical annual engagement survey will summarise.

How can Inclusivity of Culture be measured? 

Defining an organisation’s culture is difficult, and measuring it is even more so.  But what are the key dimensions that need to be measured to assess the level of inclusivity of a culture?

Research shows that those organisations that measure diversity and inclusion, create accountability; drive greater innovation and performance, embed inclusion into HR-related processes and report up to 20% more improvements in measured cultural inclusivity than organisations lacking these approaches. The key insight is that greater performance comes from a structured approach to measuring the dimensions in the graphic above over time. Please see the sidebar for Predixa’s measurement technique.

Why isn’t there a shortcut?

Changing a culture is no mean feat. Embracing and implementing diversity and inclusion is, in effect, a transformational change to the organisational culture that will require time, effort, and top-down commitment from the organisation. A simple quota measurement benchmarked against other organisations may not produce sustainable improvements to performance. Equally, over-analysis may result in inaction. But a structured approach tailored to an organisation’s diversity and inclusion can bring sustainable enhancements to performance. In today’s fast evolving world, that is a ‘need to have’. For more insights on diversity and inclusion please visit