IN today’s knowledge intensive and services based economies, organisaitons which champion diversity and Inclusion ( D&I ) and engender a culture of openness and collaboration often outperform their peers. In such organisations, the total value created is far greater than the contributions of each individual member. However some organisations are still treating D&I as a ‘nice to have’. An imperative that plays third or fourth fiddle to larger strategic goals. In the current crisis, as leaders struggle to navigate fundamental uncertainties and unprecedented business challenges, D&I risks being relegated further down the priorities list.

However, we believe that D&I can play a critical role in helping companies weather the current storm and fortify themselves for the future. Organisations that have invested in developing a diverse workplace, building balanced leadership teams across businesses, and fostering a culture of inclusiveness are likely to fare far better than others.

D&I is needed now more than ever before

Diversity + Inclusion = Better Business Outcomes

Technology has lowered the boundaries of communication and connectivity, bringing the world within six degrees of separation. As a result, most firms now operate in a global environment and are engaging with a diverse set of employees and customers. They are not isolated or operating in silos. This makes D&I very important for the success and stability of a firm. Further, the current crisis has precipitated a fundamental change in the way we work – distributed teams and work from home are not just a necessity of the current environment but are also likely to become a mainstay of the ‘new normal’. As we emerge out of the Covid crisis, inclusive leaders can enable an environment of collaboration and weave together individual perspectives to create a sense of belonging and drive strategic goals.

Additionally, D&I also shape the customers’ perception of the firm, indirectly influencing customer loyalty and brand value. Not only customers, future employees too. Organisations need to create a diverse and inclusive workplace to attract talent. According to a survey conducted by Glassdoor, 67% of job seekers said a diverse workforce is important when considering job offers.

Whilst a lot of firms recognise the importance of D&I and it’s benefits, senior management need to move beyond this and galvanise the leadership to fully embrace and implement the necessary changes. One of the first places to start and the real Key to achieving this is to review the existing recruitment and human resource policies and ensure that over a period of time, D&I best practices are fully embedded into the culture of an organisation.

Proof is in the Pudding

In 2013, Qantas posted a record loss of AUD $ 2.8billion precipitated by a host of factors including record-high fuel costs, the grounding of its A380s in 2010 for engine trouble, and the suspension of its entire fleet for three days in 2011 due to union disputes. At that point, the company’s fate was more or less sealed. However, disproving all naysayers and forecasters, Qantas delivered a record profit of AUD $850 million in 2017 and won the “World’s Safest Airline’ award. The airline also ranked as Australia’s most trusted big business and its most attractive employers. Undoubtedly, the transformation was tethered to fiscal prudence and disciplined operational management. However, another factor that contributed significantly to the company’s turnaround was D&I. Commenting on the spectacular turnaround, CEO Alan Joyce said, “We have a very diverse environment and a very inclusive culture”. Those characteristics, according to Joyce, “got us through the tough times….diversity generated better strategy, better risk management, better debates, [and] better outcomes”. With these words, the CEO of Qantas not only resoundingly endorsed D&I at the workplace but also made its benefits tangible. Various surveys of CEOs and the top managements of global companies have revealed that D&I can play an integral role in steering a company towards profitability. According to Mckinsey’s ‘Delivering through Diversity’ report, published in 2018, companies in the bottom quartile for both gender and ethnic/cultural diversity were 29 percent less likely to achieve above-average profitability than all the other companies in the dataset.

The discourse around D&I is gaining momentum. It is time that we all participate in these conversations and bring about a change from within. 

Authors: David Lancefield, Darren Head