We appear to be living in a period of continuous disruption. Global economic progress is faltering, driven by a combination of factors: the continued uncertainty caused by the COVID-19 pandemic; climate change; conflict; supply chain disruptions; shifts in international trade; and political upheaval.
The simultaneous nature of these factors is leaving many within our society disenfranchised and disillusioned. These factors have exposed the inequalities covering health, education, employment, and social access. Inequalities that require addressing.
We are at an inflection point. The actions taken as industry leaders, influencers, consumers, and global citizens to address inequalities will have long term implications. Anchoring transformations to the Diversity, Equality, Inclusion and Sustainability (DE&IS) agenda will be a positive catalyst for change and super charge transformations.
Doing the right thing is economically advantageous
We live in a moment of history where governments, institutions and businesses will be required to make a strategic call to change or maintain the status quo. The ability to act upon this inflection point and make the necessary adjustments will be a strategic differentiator, in the medium to long term.
There is compelling moral, legal, and economic imperative for change. This shift will require DE&IS to be at the center of policy and strategic decision making. Not only is it economically and commercially advantageous to incorporate DE&IS into the strategic agenda, but it is also the right thing to do.
When looking at the commercial aspects of incorporating DE&IS agenda strategically, businesses that have made the shift have outperformed those that have not. Companies that are within the top quartile for gender diversity are 21% more likely to outperform on profitability, and 27% more likely to have superior value creation. Furthermore, the number of all-male boards in the FTSE 350 has fallen from 152 in 2011 to 5 in 2018. The evidence is clear – DE&IS works and is a value creator.
How do we bridge the DE&IS agenda divide?
There is no standard playbook in respect to progressing the DE&IS agenda. As enterprises and transformations are highly complex, multi-dimensional environments, the strategies will differ. To progress the DE&IS agenda will require change across all layers of the enterprise, from the business model to individuals.
However, there are several commonalities / themes across organisations that have successfully incorporated the DE&IS agenda into the way of working. These themes include:
- Targeted investment across pivotal capabilities and skills (i.e., Individual, Management and Executive) that drive innovation, collaboration, performance, and business value. In doing so, this will create a culture that will naturally support the DE&IS agenda
- Sponsor, create and mature an inclusive and collaborative culture across all levels of the enterprise
- Continually review and perform retrospectives to assess performance, progress and introduce course correcting action.
- Review and ensure that market and customer facing value propositions address inclusion and sustainability gaps and are human-centric/ insight led in respect to their designs. Furthermore, actions to address bias across value chain activities such as marketing, product design, channel strategies, etc., will also enhance levels of DE&IS across the value chain.
Numerous studies have shown that business that apply a human-centric and data insight driven designs generate 32% more revenue, and 56% more shareholder returns.
How do we bring it all together?
Incorporating DE&IS into the fabric of an enterprise – its culture, its way of working, and how transformations are shaped and executed – requires a holistic and enterprise-wide approach, as outlined within the DE&IS matrix.
“We have a very diverse environment and a very inclusive culture, and those characteristics got us through the tough times. Diversity generated a better strategy, better risk management, better debates, and better outcomes” Alan Joyce, CEO of Qantas Airways.
To move forward and address inequalities, it is essential that the DE&IS agenda is fully incorporated in the strategic agenda. DE&IS should not be regarded or treated as an addition, but rather an integral part of the future business development.
The moral, legal, and economic imperatives to act, and to act with purpose have never been so compelling. The decisions that we make as industry leaders and influencers will determine to what extent we bridge the DE&IS divide.