Following this summer’s U.S. Supreme Court decision on affirmative action, leaders have been bracing for new obstacles and challenges to their corporate DEI programs. Nonetheless, the commitment to inclusion, equity and diversity in businesses can – and should – stay on course. First, most corporate DEI programs are on solid legal footing, as Charlotte A. Burrows, commissioner of the U.S. Equal Employment Opportunity Commission (EEOC), made clear immediately following the SOCTUS decision. Moreover, the business case for keeping up the momentum on DEI has never been stronger.
Fortune’s new DEI Leaders Index Concepts shows that companies scoring in the top 20% of JUST’s Rankings on DEI issues outperformed the Russell 1000 Equal Weighted benchmark by 3.4%. Further, several investment resources, including the Human Capital Management Coalition and JUST Capital, are recognizing a direct correlation between diversity and workplace performance which has grown over the last two years. Additionally, a Wall Street Journal study found that the 20 most diverse companies saw an average annual stock return of 5.8% greater than those of the 20 least diverse companies. In short, the evidence indicating increased profitability because of DEI progress is only growing.
Over the last year, momentum around DEI measures increased or dramatically increased, according to a new report put out by the World 50 Group. The primary catalyst for that growth has been leadership pressure, especially CEO commitment. Now is not the time to pause or retreat. Instead, this is when CEOs are called upon to further clarify the why behind their DEI goals and bolster the case for their ongoing advancement.
Recommit to the DEI WHY
Those CEOs and their teams who are committed to keeping up the momentum and building more diverse, equitable, and inclusive organizations have multiple points to highlight underscoring why DEI remains the optimal business strategy:
Fueling the Talent Strategy:
DEI is best conceived as more than an initiative or separate goal but as a core part of talent strategy. When understood this way, the resources and investments follow. To attain the best possible talent for their teams, companies must look everywhere – across geographies, industries, experience levels and lived experiences and assess for the traits necessary to deliver their future goals.
In addition, the competition to attract, hire and retain this top talent Is intense and among the chief requirements prospective employees look for now is a solid demonstration of a DEI commitment. Data from a joint study we did with Kearney, Different Generations, Same Ideals: What Workers of All Ages Value in their Jobs, found that 70% of all the respondents across five generations ranked "champions diversity, inclusion, and equity" as the most important factor to them when choosing an employer.
More Customers, More Efficiently:
Simply put, all companies aspire to expand their customer base and increase sales frequency and volume. Achieving this means not only selling to the broadest possible audience but also understanding the intricacies of new customer segments and staying attuned to evolving customer needs. The more comprehensively businesses encompass and serve more of the entirety of the world around them, the more likely they are to keep growing and succeeding. To build organizations capable of translating these goals into reality, leaders must equip their teams with the very best talent and the most optimal workplace conditions for generating the creativity and innovation needed.
Unlocking Potential Through Inclusive Culture:
Beyond securing the most appropriate talent, leaders are understanding the importance of ensuring and constantly strengthening a culture that is open and welcoming to all. Fostering inclusivity allows employees to be themselves at work without fear, creating a sense of safety and belonging that translates into increased authenticity and creativity in so many areas of the organization: improved collaboration and problem-solving, better decision-making, increased innovation, more attuned customer understanding and relationships, active employee engagement, and better employee retention.
In the pursuit of growth, innovation, and productivity, companies must not only hire an array of talent but also build and support an environment that is conducive to generating the creativity and experimentation needed. This entails establishing cultures that ensure acceptance, individualism, and wide belonging so that employees have the license they need to take risks and do their best work. As Harvard professor Amy Edmondson has made clear in her pioneering work on psychological safety, “It’s felt permission for candor.” This starts with commitment to inclusivity. It is not a nice, moral preference (or a politicized posture), it is a business growth necessity. As long as employers do not use protected characteristics like race and gender when making employment choices, they are free to support a more inclusive culture and break down inhibiting barriers.
The Prize: Sustained Growth and Value
Organizations are hard-pressed today to grow and innovate without intentional efforts around diversity and inclusion. For this reason, many great companies ingrained DEI goals and values in their culture and into their mission. This is not a superficial alignment; it’s an embodiment of their core purpose and business principles, baked into the decisions they make, the products and services they develop, and how they treat each other and their customers. It is up to visionary CEOs who understand this to ride out the advancing backlash, knowing that embedding DEI into the core of their organizations has not been a passing trend; it’s the designated pathway to sustained success.