#394 The dispute over Diversity, Equity, Inclusion (DEI)
The dispute over Diversity, Equity, Inclusion (DEI)
Facts instead of emotionally charged ideology
Everyone wants to be treated fairly.
The business world has changed significantly. There is more diversity, but there are also disputes about approaches, implementation, or even quotas. Current political developments have reignited the controversy surrounding DEI programmes. Suddenly, DEI is supposedly a controversial topic. Numerous organisations run extensive programmes of this kind. Some have now discontinued them. The call for a clear evidence base is getting louder.
What is the evidence base? How do modern organisations position themselves here?
Definition
Diversity - the variety. For example, you can best reach a diverse clientele if this diversity can also be seen in your workforce. Practical example: You sell pens in Germany. You know the sales channels, distribution channels and market approaches. Now, you want to sell to large markets in India or China. What are the best distribution channels there? People who come from these countries can best describe this to you.
Equity - justice and fairness. Everyone wants to be treated fairly. Unfair or deliberately unfair treatment leads to demotivation, absenteeism and staff turnover.
Inclusion - integration, keeping everyone included. You do not want to be marginalised just because you are who you are. All people have this right.
DEI programmes have been implemented globally for many years based on these principles.
Evidence
Instead of weighing ideologies or opinions against each other, it is important to analyse the facts regarding DEI.
Finances: of course, financial aspects should not be the primary motivation for DEI, but this is precisely the topic that most quickly convinces managers and executives in particular. In a 2020 study, McKinsey found that organisations with gender diversity are 25% more profitable. If ethnic and cultural diversity is added, profitability is 36% higher. Credit Suisse published in 2016 that organisations with at least one woman on the board have a higher Return On Equity (ROE). In 2018, the Boston Consulting Group found that above-average diversity in management means 19% more revenue by innovation.
Innovation and problem-solving: the Harvard Business Review published in 2017 that diverse teams solve problems better. Scientific American (2014) published that innovation and critical thinking work better in diverse organisations because groupthink is disrupted here. In 2017, the Journal of Applied Sciences showed that diverse teams deliver greater creativity and more ideas, with cognitive differences being the key here.
Talent: in times of labour and talent shortages, Glassdoor 2020 published that 76% of talent see DEI as a critical factor in their job search. If you do not fulfil this, you become a second-choice employer. In 2019, a study by Deloitte showed that organisations with implemented DEI programmes have 22% less turnover in their workforce. SHRM (Society for Human Research Management, 2019) showed that DEI programmes lead to more engagement, less absenteeism and higher productivity.
Consensus: MIT Sloan published in 2020 that more trust in transparent promotion processes and also more loyalty to the organisation can be seen in DEI-practicing organisations. In 2019, Stanford University showed in publications that psychological safety leads to more ideas and targeted criticism, as ideas and criticism are more likely to be expressed without fear of negative consequences in DIE-oriented organisations.
Numerous organisations, therefore, continue to implement comprehensive DIE programmes because of the obvious scientific consensus and clear data. These include Costco, Bank of America, Delta, United, Southwest, American Airlines, JP Morgan, Home Depot, Marriott, Microsoft, Procter & Gamble, Goldman Sachs, and Catholic Health, to name but a few. This week's podcast provides more aspects and evidence; see the links below.
Implementation
You need professionally trained people to carry out DEI programmes. In addition, these programmes are never about reproaches, finger-pointing or punishing people. Scientific evidence, practical implementation and the best possible methodological and didactic realisation are the key factors here. The programmes must always lead to the most pragmatic implementation possible in the real world of work.
Conclusion: anyone who ignores clear scientific evidence and places their opinion above the facts disqualifies themselves as a person and as a leader. Anyone who uses the word 'woke' in fact-free desperation and uninformed ego moments, especially when it is used as a negative term, is declaring educational and intellectual bankruptcy. DEI affects us all and concerns us all - anyone who opposes it is demonstrably and deliberately harming people and organisations alike. The science and practice is clear: DEI benefits everyone.
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More on this topic in this week's podcast: Apple Podcasts / Spotify
For the podcast transcript, read below.
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Niels Brabandt is an expert in sustainable leadership with more than 20 years of experience in practice and science.
Niels Brabandt: Professional Training, Speaking, Coaching, Consulting, Mentoring, Project & Interim Management. Event host, MC, moderator.
Podcast Transcript
Niels Brabandt
DEI, diversity, equity, inclusion . You probably have realized that this was part of a huge argument globally just recently, and we need to talk about the facts instead of emotionally led ideologies here . I received a ton of emails after the inauguration of Donald Trump, mostly due to the fact that he now aims to stop the AI programs and already has put this in place . And some organizations unfortunately followed . But we now, received emails where people ask, is there scientific evidence if DEI training actually pays off ? And what I did since I received this this enormous amount of emails about the topic, I did the research, looked into studies . Is there any proof of d DEI actually works or not ? Let's look at the situation right here . We all want to have fair deals when we are at work or in life . We all want to be dealt with fairly . We know that society has changed a lot since the We have more diversity . However, we also have more arguments about the whole thing, how to implement it . And also some people even claim, should we have quotas or not ? And then the whole argument usually escalates and the room explodes . Especially, DEI training is targeted at the moment by different political groups from Donald Trump to Nigel Farage to others, usually far right wing political groups . Of course, I have to say, as an openly gay man, I'm part of the LGBTQIA plus community . So I'm I'm actively now targeted also affected by this issue . However, we want to get away from my personal story here . We need to look at the facts . What does science say ? How should modern organizations react to the ongoing discussion we have about DEI ? So first of all, we have to talk about the definition . Diversity means that you have different kind of people, different kind of aspects in your organization . I give you a very simple example . Let's say you sell pens, and you sell pens in The UK . And then you probably know how to sell pens in The UK . You have shops where people buy pens or you can buy them online . You know how people actually shop . When you now say, hey . You want to open up to sell pens to larger markets . So for example, huge markets such as in The US or in India or in China . And when you're not in The US and you are from The UK, you probably know that they have a quite similar culture how they buy and use pens and which context usually sell them sell them . Do you know that in India ? Do you know this in China ? And you most likely will now say, well, we could ask experts who are from China or from India . Exactly . And that is what you do . You reach out to a diverse audience by having diverse staff in your organization . Equity means that you have fairness in your organization . We all want to be dealt with fairly as I already said . And inclusion simply means that no one is left behind just due to the fact how they are . Most people would say, oh, inclusion . You mean, wheelchair things ? So first, don't say it that way . And second, it's not only about people who have certain limitations in their life . So inclusion means not leaving anyone behind just due to the fact how they are and things they cannot change . And of course, when we now look into scientific evidence, and this is the main part of this podcast today, the first question I always I always put this to the front because I know that no one likes to ask it and it shouldn't be the number 1 motivation . But as soon as the doors close and boards ask me as a consultant, is does it actually pay off ? People, of course, know that it is not the most brilliant moment when you are a manager or an executive when you say, hey . What about human rights ? Do they actually pay off ? So when you talk about diversity, equity, and inclusion, asking does it pay off is, of course, not the nicest way to approach it . It shouldn't be the number 1 way . However, we all know that this is how boards react first . When you say something pays off, it's it's highly likely they do it . When they say it doesn't pay off, they most likely will not do it . When you look into financial results, McKinsey, in a study in the year 2020, published that as soon as you have gender diversity in your organization, you, on average, have 25%, one quarter more profit . If you add ethnic and cultural diversity to the mix, you have 36% more profit . So that's 1 quarter to one third more profit . It pays off royally scientifically proven . The Credit Suisse, the Swiss bank in 02/16 already published that when you in an organization only have 1 woman on the board, and we're, of course, now here still talking in the, binary gender model . And by the way, yes, there are more than 2 genders . Donald Trump said they are only 2 by decreed or executive order . Fortunately, science is free, and science doesn't care about what someone with limited or no knowledge on the matter says . Fortunately, science is not bound to executive orders . Greetings get out to mister Trump and their supporters or however you wanna call these people . So when you only have 1 woman on the board or in senior executive leadership, you have a higher return on equity in your organization . The Boston Consulting Group in 02/18 published that diversity in management, as soon as you are above the average, I'm not talking about being the market leader, I'm not talking about being the number 1 in your region or in the country or in the world . I'm not talking about being on the frontier, the number 1 person walking to the very front . No . I'm talking about when you only have diversity in management, when you when when you are above the average, you have 19% more innovation revenue . Innovation revenue means that people have new ideas, new products, bring them to the market, and they actually work, and it actually pays off 19% . So when we look at the numbers from gender diversity, 1 quarter more profit to ethnical, cultural diversity, 36 more profit to having only just 1 woman on the board having a higher return on equity, diversity benefit being only above the average plus 19% innovation revenue, it pays off royally, and there is no discussion about that . If anyone says it doesn't pay off, that's a straightforward lie . However, that's not the end of the whole story . When we now look into innovation and problem solving, Harvard Business Review in 02/17 published that diverse teams are better at problem solving, which by the way shouldn't be too surprising when you have more different points of view . And I just talked about that . When you say, hey . How do we sell pens to China or India ? You most likely should ask diversity with people from China or India so you solve that problem in a better way . The Scientific American in 02/14 published that innovation and critical thinking in diverse groups is better because group thinks group think gets disrupted . You know, group think as soon as people have a certain opinion, it's quite hard to get through to them or just to to to bring them to any kind of different approach . And I'll just give you a very simple idea, Volkswagen . I'm pretty sure that someone when this group thing happened where they said, oh, we should put this, you know, this little thing in there so we meet the emission goals . And meeting the emission goals, of course, is important, but not in the way they did it because it was fraudulent . I'm pretty sure someone said, well, I think what you do is, criminal . And what happened was someone poorly said, shut up . We do it this way . Disrupting group think is difficult . However, it happens more often, and you also have more innovation, more critical thinking in diverse groups . Diversity brings you to better solution . The Journal of Applied Psychology in 02/17 published that diverse teams show a higher creativity, bring more ideas to the table because of cognitive differences, and that moves your product cycle, course, the financial course, the financial results of your organization . But it doesn't end there . Let's look at the talent acquisition, talent development, talent retainment . And when you now think of the talent situation in the market, you most likely will say, well, there is a shortage of talent, I think . So it's quite a shortage of talent, quite a shortage of a workforce . So is DI important here ? Isn't that people just don't like it ? They're a bit sick of it or someone is going to shout the word woke somewhere from the side ? We get to that word, by the way, in a minute . Glassdoor in 2020 . You probably know Glassdoor is 1 of the largest platforms to evaluate employers . 76% of all talent that's, that's published in 2020 by Glassdoor in 1 of their studies . 76% of talents see DEI as a critical factor, see diversity, equity, and inclusion as a critical factor when looking for a job, which means when you kill DEI off your programs, people will consider you the second choice on on the job market and they will only go for you when their first choice didn't hire them and you probably do not want to be the second choice . Deloitte in 2019 also perhaps published and has proven in a study that you have 22% less turnover in DEI driven organization, a DEI practicing organization . You save 1 of your recruiting costs with less turnover . The Society for Human Research Management, SHRM, in 02/19, published that DEI programs lead to more engagement . More engagement means less absenteeism, so people are there more, and that again leads to more productivity . Having more productivity getting back to what we talked about first, again, leads to better financial results . So to put it mildly and very politely, there's an unambiguously clear global scientific evidence on DEI programs working . MIT Sloan, that's the business school of the Massachusetts Institute of Technology, one of the top 10 universities in the world . The MIT Sloan published in 2020 that as soon as you have transparent promotional procedures, there is more loyalty and more trust from your staff towards managers and executives . Of course, now some people say, well, many organizations don't have transparent promotional procedures . Someone gets promoted and you wonder why . And, of course, then rumors start where you think, well, maybe someone just got promoted to meet their diversity goals . And, of course, that shouldn't be the case . We fully agree here . You need to be fully transparent . When someone says, I wanted to be promoted, someone else was, why did you pick them, not me ? You have to deliver proof and evidence . And I know that many organizations do not deliver on that promise, so please start changing that today . You're harming the DEI approach when you become non transparent on the matter . Stanford in 2019 published the psychological safety also goes up and it's actually existed as soon as you as soon as you practice DEI programs . More ideas and also criticism will be mentioned without fear of immediate negative consequences . And again, getting back to Volkswagen, as you know, with my charming accent, you can probably hear I am German . So someone at Volkswagen will have said, look . What we do here with this with this thing to meet the emission goals that we build in there, this little thing, I think that's criminal, and probably face negative consequences from that . Psychological safety, by the way, again, leads to more trust . People stay longer, are more and it again plays into the financial results of your organization, which is, by the way, why, because you probably heard now, oh, why had this and that organization, some organization, even some large organization under the pressure of Donald Trump know through now through DEI programs under the bus . And that shows that their leaders and their organizations never truly cared . Costco, one of the largest retailers worldwide, their shareholders and let's face it, shareholders are usually in for the return on invest . They are not in to say, hey . We are here for the people and that they all feel great . They put money on the table, and they want to have a high return, a dividend, stone cold cash on the table . That's what they want at the end of the year . The shareholders of Costco voted for keeping the DEI program in the pro in in the organization active because it is so obvious that it pays off . So just just summing up the evidence here . If you say DEI programs are not needed or they do not pay off, it's either either you're not informed or it's a straightforward lie or both . There's not a single point of evidence saying that DEI programs do not work . They work, and they work tremendously well, and you make more profit as soon as you have DEI programs in place . Now, of course, some people say, well, how do you implement the whole thing ? Very important here is don't go for the webinar that people have to watch on the side with its sandwich in their hand during their lunch break . That doesn't get you anywhere . Also, do not do anything where someone who has no clue read a book and suddenly steps up in front of a group and says, I'm now your DEI trainer . Don't do that . You need professionally educated people on the matter . That doesn't necessarily mean you need to take someone from a DEI background or someone who was affected by DEI, either inclusion or exclusion in their history . However, it helps when they were . They probably, as the as the group that was affected by the whole thing, can tell you more on the matter than others could who only know from a certain distance . You need professionally educated people . They may or may not be affected by DEI by themselves . However, it it helps when they are part of certain groups, communities that can relate to the matter . Very important here is no good DEI program starts with blaming people . You do not start with you did it all wrong in the past . You do not start with finger pointing and you do not start with you sitting here are the problem and you were the problem for the last twenty years because no one will listen to that . So when you have professionally trained people, be sure that they have a positive mindset toward positive idea, positive approach to having the whole program implemented in your organization . The leading aspect of any DEI program is always scientific evidence, which needs to be relevant to real world practice . And if people who train you or coach you or mentor you in the matter are a bit entertaining, bit good, easy to listen to, that's also quite helpful . So take people who are methodologically and didactically qualified, but also who are people you like to listen to and can listen to . Also, you have to add there must be a pragmatic implementation . Talking about scientific concepts is nice, and it's also helpful to understand the matter on a higher level . However, then you have to bring it down to what do we do in today's workplace from now, what what are we going to change from here ? Summing all this together, when you ignore scientific evidence or you simply have a go against the facts, You disqualify yourself as a person and as a leader . No one will follow you for a good reason . When you, in your fact free despair and in your maximum of non informed self promotion, self display, or ego, call it as you like, scream around the world, it's all woke . The only thing you do is you put not only negativity into the workplace, also we simply have to say nothing smart was ever said when the word woke was used as a pejorative . So be aware of that . Also, by the way, you basically declare intellectual bankruptcy when you shout around the world woke . So you do not want to want you do not want to be 1 of these people . DEI affects all of us because it can quickly go the wrong way . So for example, maybe you remember when someone suddenly says, oh, it's an old white man . Old white man and excluding people based on being an old white man doesn't help anyone as well . So you see, DEI programs help you that this doesn't happen as well . DEI programs affect absolutely anyone and that's why they are so important . Anyone who has a go against DEI programs, and I'm speaking here from a scientific point of view, anyone who has a go against DEI programs harms organization and people, and you do it deliberately, which disqualifies you as a person, as a leader, and as someone who can be tolerated to stay within the organization . I need to be that unambiguously clear . So when you now say, we have to start with it or we have to continue, go for it, Do it right now . Make it practical and put it in place . The quicker the better . Because it shouldn't be the number 1 motivation . However, it's not only great for innovation or problem solving, talent acquisition or retainment . It's also, of course, great when you put science into practice . It also and that shouldn't be the number 1 motivation, but it is important . It also pays off royally royally for your organization . I wish you all the best implementing it from now on or keep going as you are . And when you now say, woah . That was, I think we have to do something in my organization . Feel free to text me . Feel free to email me in the show notes of this podcast . You find my email address nb@nb-networks.com . You find it below the podcast in the show notes . You also find my LinkedIn there . Feel free to connect with me on there . You also find my website, nb-networks.biz right there . So feel free to contact me there . You also find the transcript of this podcast exactly there . The second aspect which I always mention is we have live sessions . So when you go to expert.nb-networks.com, feel free to sign up there with your email address . You only receive 1 email every Wednesday morning . And what you get there is, first, access to every single article ever published, free access also to, to every podcast I ever made . So no paywall, no nothing . And, of course, you find the date and the time for the next live session . And, also, you find the direct link to join that session . I'm looking forward to seeing you there . However, the the third aspect is always the most important 1 . Apply, apply, apply what you heard in this podcast because only when you apply what you heard here, you will see the positive aspects that you obviously want to see in your organization . I wish you all the best implementing this . If you need any kind of help, feel free to contact me . I'm available 247, and I answer any message within twenty four hours or less . Looking forward to hearing from you . All the best implementing what you heard today in this podcast . Let's stay in touch . And at the end of this podcast, there's only 1 thing left for me to say . Thank you very much for your time .