case study analysis delivering impact through diversity

The business case for diversity in the workplace is now overwhelming

More innovative, more profitable ... greater diversity isn't just a moral imperative. Image:  REUTERS/Jessica Rinaldi

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We live in a complex, interconnected world where diversity, shaped by globalization and technological advance, forms the fabric of modern society. Notwithstanding this interconnectedness, there is also growing polarization – both in the physical and digital worlds – fuelled by identity politics and the resurgence of nationalist ideals.

Not surprisingly, our workplaces tend to mirror the sociocultural dynamics at play in our lives outside work. Having built and scaled a multinational enterprise over nearly two decades, I’ve learned that diversity in the workplace is an asset for both businesses and their employees, in its capacity to foster innovation, creativity and empathy in ways that homogeneous environments seldom do. Yet it takes careful nurturing and conscious orchestration to unleash the true potential of this invaluable asset.

In this era of globalization, diversity in the business environment is about more than gender, race and ethnicity. It now includes employees with diverse religious and political beliefs, education, socioeconomic backgrounds, sexual orientation, cultures and even disabilities. Companies are discovering that, by supporting and promoting a diverse and inclusive workplace, they are gaining benefits that go beyond the optics.

Business has the transformative power to change and contribute to a more open, diverse and inclusive society. We can only accomplish this by starting from within our organizations. Many of us know intuitively that diversity is good for business. The case for establishing a truly diverse workforce, at all organizational levels, grows more compelling each year. The moral argument is weighty enough, but the financial impact - as proven by multiple studies - makes this a no-brainer.

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The future of jobs report 2023, how to follow the growth summit 2023, disruption and innovation.

The coming together of people of different ethnicities with different experiences in cities and societies is a key driver of innovation. The food that we eat every day is a result of this blending of cultures. The most successful musical genres, such as jazz, rock’n’roll or hip-hop, are the products of cultural amalgamation.

If we look at the most innovative, disruptive and prosperous urban centres in the world – New York, Dubai, London and Singapore – they all have one thing in common. They are all international melting pots with a high concentration of immigrants. Research shows that there is a direct correlation between high-skilled immigration and an increase in the level of innovation and economic performance in cities and regions.

Singapore makes a great case study. This tiny South-East Asian island nation, with a population of just over five million, is today one of the globe’s heavyweight financial centres. It scores highly in international rankings for areas as diverse as education and ease of doing business, and has been recognised as the world’s most technology-ready nation. Singapore is also highly multicultural, with an ethnic mix of people of Chinese, Malay and Indian descent, and large populations of different religious faith groups including Buddhists, Christians, Muslims and Hindus.

When Singapore achieved independence in 1965, its founding fathers instituted measures that would not leave racial harmony to chance . Singapore aggressively promoted racial and ethnic integration. One important measure was its housing policy, which ensured that every public housing complex followed a national quota of racial percentage. This forced people of different ethnicities to learn to live with each other, and broke up all the ethnic ghettos that were prevalent at the time of independence.

These seemingly autocratic measures have served the small island nation well in producing a well-integrated populace that values meritocracy more than race or religion. Singapore’s ethnic and religious diversity has proven to be an asset to the country, and the result is relative racial harmony – something the US would do well to learn from.

In neighbouring Malaysia, my home country, ethnic, cultural and religious diversity has always been promoted. By the time I was 18, I could speak five languages and had friends from the Chinese, Indian, Malay and Eurasian communities, who between them hailed from several religious backgrounds. Malaysia has one of the world’s most diverse cultural and ethnic mixes and has outperformed most of its regional partners, with a high annual GDP growth since its independence . The multilingual workforce has given us Malaysians an edge in the workplace.

Diversity and business performance

There is substantial research to show that diversity brings many advantages to an organization: increased profitability and creativity, stronger governance and better problem-solving abilities. Employees with diverse backgrounds bring to bear their own perspectives, ideas and experiences, helping to create organizations that are resilient and effective, and which outperform organisations that do not invest in diversity.

A Boston Consulting Group study found that companies with more diverse management teams have 19% higher revenues due to innovation. This finding is significant for tech companies, start-ups and industries where innovation is the key to growth. It shows that diversity is not just a metric to be strived for; it is actually an integral part of a successful revenue-generating business.

While most of these studies are conducted in the western world, Asian countries are engaging in the equality debate at their own pace. Cultural shifts over the last 40 years mean that South-East Asia currently has a female workforce participation rate of 42% – higher than the global average of 39%.

According to the 2018 Hays Asia Diversity and Inclusion report, improved company culture, leadership and greater innovation were the top three benefits of diversity identified by respondents. However, there was a perception among a significant proportion of participants that access to pay, jobs and career opportunities for those of equal ability could be hampered by factors such as age, disability, ethnicity, gender, family commitments, marital status, race, religion and sexuality.

More than ever, flexibility and versatility are becoming the key to success for individuals, companies and countries alike, and a culturally diverse environment is the best way to acquire these qualities. Assumptions need to be challenged, conversations need to be had and corporate culture needs to be updated so that the modern workplace can accurately reflect and support the population of the region.

The millennial quotient in business diversity

By the year 2025, 75% of the global workforce will be made up of millennials - which means this group will occupy the majority of leadership roles over the coming decade. They will be responsible for making important decisions that affect workplace cultures and people's lives. This group has a unique perspective on diversity. While older generations tend to view diversity through the lenses of race, demographics, equality and representation, millennials see diversity as a melding of varying experiences, different backgrounds and individual perspectives. They view the ideal workplace as a supportive environment that gives space to varying perspectives on a given issue.

The 2018 Deloitte Millennial Survey shows that 74% of these individuals believe their organization is more innovative when it has a culture of inclusion. If businesses are looking to hire and sustain a millennial workforce, diversity must be a key part of the company culture. This 2016 survey shows that 47% of millennials are actively looking for diversity in the workplace when sizing up potential employers.

Women in the workplace

Gender equality remains a major issue in the corporate world. Despite an abundance of research confirming that companies with more women in the C-Suite are more profitable , there is still a gender gap in the vast majority of companies . Women remain significantly underrepresented in the corporate pipeline, with fewer women than men hired at entry level, and representation declining further at every subsequent step.

Companies need a comprehensive plan for supporting and advancing women. This requires a paradigm shift in the corporate culture which will include investing in employee training and giving employees greater flexibility to fit work into their lives.

A survey conducted by Pew Research Centre lists several areas where women are stronger in key areas of both politics and business. Survey respondents noted that women are:

• 34% better at working out compromises
• 34% more likely to be honest and ethical
• 25% more likely to stand up for their beliefs
• 30% more likely to provide fair pay and benefits
• 25% better at mentoring

Forward-thinking companies should be looking for ways to employ and empower more women at work – not just as a moral obligation, but also as a sound business strategy. McKinsey’s most recent Delivering Through Diversity report found corporations that embrace gender diversity on their executive teams were more competitive and 21% more likely to experience above-average profitability. They also had a 27% likelihood of outperforming their peers on longer-term value creation. Different perspectives on customer needs, product improvements and company wellbeing fuel a better business.

It has been estimated that closing the gender gap would add $28 trillion to the value of the global economy by 2025 – a 26% increase. Put simply, companies and societies are more likely to grow and prosper when women gain greater financial independence.

Taking a stand for diversity in business

It is important for corporations to step up and advocate for diversity and tolerance on a public platform. A great example of this is Nike’s support of American football quarterback and rights campaigner Colin Kaepernick . More than a marketing exercise, it showed the world that one of America’s best-known corporations was willing to stand alongside one man in his battle against racial injustice and intolerance.

Procter & Gamble’s (P&G) ‘ We See Equal’ Campaign , which was designed to fight gender bias and work towards equality for all, depicted boys and girls defying gender stereotypes. The company has a history of promoting the issue, and also records 45% of its managers and a third of its board as women. P&G’s clear dedication to equality within its own workforce meant that the campaign came across as authentic and as a genuine push for change.

Why getting workplace diversity right isn't for the faint-hearted

Beyond diversity: how firms are cultivating a sense of belonging.

There is much to learn from leaders in diversity and inclusion, but it is important to remember that every company’s initiatives will look different. Diversity means different things to different people, and organizations must apply those definitions to their companies accordingly.

Diversity and inclusion cannot be a one-time campaign or a one-off initiative. Promoting them in the workplace is a constant work-in-progress, and should be maintained and nurtured to guarantee effectiveness. Empathetic leadership is key to this transformation. For real change to happen, every individual leader needs to buy into the value of belonging – both intellectually and emotionally.

The business world must come together and be more engaged and vocal than it has been to promote the message of a diverse and tolerant society. It is an uphill battle, but peace, prosperity and advancement depend on it.

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Teaching DEI Through Case Studies

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In the summer of 2020, the Black Lives Matter (BLM) movement took center stage across the United States. At the height of a devastating pandemic and in the wake of several high-profile murders of Black Americans by law enforcement and others, a diverse range of citizens took to the streets to protest systemic racism and the inhumane treatment of African Americans.

Through the lens of bystander Darnella Frazier’s smartphone camera, the world watched in horror as George Floyd died at the hands of a white police officer on a street in Minneapolis. On May 25, 2020, officer Derek Chauvin knelt on Floyd’s neck for 9 minutes and 29 seconds as Floyd repeatedly said that he could not breathe. His death, along with those of Breonna Taylor and Ahmaud Arbery a few months earlier, sparked international protests and drew intense scrutiny about how African Americans are treated by the police, the criminal justice system, and their fellow citizens.

The protests of 2020 prompted many companies, organizations, and educational systems to express their public support of the BLM movement and commit to the goal of achieving racial equity and social justice. While for many companies this was likely a fleeting PR move, others announced that they were taking a hard look at their own systemic issues. Business leaders at companies in many industries began the challenging but necessary work of exposing and addressing the deep biases that have been hardwired into their organizations. The Quaker Oats Company, for example, announced its discontinuation of the 130-year-old Aunt Jemima breakfast foods brand, which had been inspired by a minstrel show song and had long perpetuated a Black stereotype.

Many businesses responded by not only committing to increasing diversity within their workforces, but also examining their supply chains and external partners. Target Corporation, headquartered in Minneapolis, pledged to “…work with diverse suppliers that are at least 51 percent owned, controlled, and operated by women; Black, Indigenous, and People of Color; LGBTQ+; veterans or persons with disabilities.” In 2020, U.S. Bank committed to “doubling its Black-owned suppliers within the next 12 months.”

Further, because of the BLM movement, many major companies are recruiting from historically black colleges and universities more than ever before. Morgan State University in Baltimore reports that its online job portal saw a “263 percent increase in employer logins between July 1, 2020, and June 30, 2021, with major companies like Apple, Bank of America, and Estée Lauder reaching out for the first time ever.”

The Growing Diversity of the Student Body

Against this backdrop of the fight for racial equity and social justice, the U.S. is undergoing a significant change in demographics. In a recent article , The Washington Post shared the following conclusions from newly released 2020 census data:

“The country … passed two more milestones on its way to becoming a majority-minority society in the coming decades: For the first time, the portion of White people dipped below 60 percent, slipping from 63.7 percent in 2010 to 57.8 percent in 2020. And the under-18 population is now majority people of color, at 52.7 percent.”

These statistics apply to our students as well as our future leaders and labor force. Businesses and those in the business of educating students for a future of fulfilling work must respond in kind to a changing college campus. Some schools already are, as shown by these recent examples:

• The University of California system announced that for the incoming 2021 class, “underrepresented students will comprise 43 percent of the new admits, with Latinx students making up 37 percent and the number of Black students being admitted increasing by 15.6 percent.”
• In July, the Governing Board of California Community Colleges (CCC) announced its approval of two new requirements, including one adding ethnic studies as a graduation requirement for students seeking associate’s degrees and another mandating that CCC schools incorporate diversity, equity, and inclusion (DEI) and anti-racism into their employment procedures.
• Purdue University has created a new Equity Task Force and has committed more than 75 million USD over five years to support Black students. Purdue states that the “goals of the task force are split into three categories that will measure success in making Purdue a better place for Black students, faculty, and staff: Representation, Experience, and Success.”

DEI in the Curriculum

Universities and college campuses have long been at the forefront of a range of social justice movements, codifying these movements into academic programs such as Black studies, women’s studies, disability studies, queer studies, and more. But there remains much work to be done, including in the integration of DEI content into our curricula. As educators, publishers, and academics who create scholarly content, we are all responsible for taking a close look at how we approach teaching the lessons of diversity. We must build and use curricular tools that reflect the world our students will enter and their experiences within it.

We need more case studies in our classrooms that are written by authors from a range of backgrounds and perspectives—not just by those who represent predominately white, privileged, Western viewpoints.

The traditional case study is one such tool we can use to support DEI and the changing face of business. That said, the case study, long a stalwart in business and management education, is ripe for reinvention where DEI is concerned. It’s true that case studies can expose students to the challenges of a wide variety of organizations, from global publicly traded entities to local startups to social enterprises. But it’s just as essential that cases expose students to a range of perspectives and reflect the myriad backgrounds—cultural and economical—of those who work within the featured organizations.

Moreover, the importance of DEI in case studies extends beyond their subject matter to their authorship. We need more case studies in our classrooms that are written by authors from a range of backgrounds and perspectives—not just by those who represent predominately white, privileged, Western viewpoints.

Fortunately, case studies can be developed far more quickly than textbooks or even mass market book titles. Their short format means that professors can use them not only to keep content fresh and current for students, but also to better capture the shifting nature of businesses and the people who help them thrive. Cases also can show real-time examples of companies undergoing successful evolutions in their DEI initiatives, as well as companies that still have a long way to go.

By looking at business through a DEI lens, students can better see the reality of our economic landscape. They can truly connect to, and see themselves in, today’s business environment.

Building a Modern Case Collection

Our SAGE Business Cases collection is a testament to SAGE’s dedication to prioritizing cases that represent a broad and inclusive range of backgrounds and perspectives from around the world. SAGE is committed to developing cases around emerging and underserved topics that accurately reflect the diversity and shifting priorities of the global business landscape, as well as the experiences of those who work within it.

For example, in 2021 we launched a new case series called Immigrant Entrepreneurs . This groundbreaking series is edited by Bala Mulloth, an assistant professor of public policy at the University of Virginia and himself an immigrant entrepreneur. It features the stories of founders who started businesses outside their countries of origin.

While there has been a spike of interest in case studies that feature protagonists of a variety of backgrounds, we have also seen a rise of nativist politics across countries and cultures. Part of our vision for this series is to combat the damaging and false political narrative that immigrants harm economies. We want to defuse that narrative with positive and inspiring examples of the value immigrants add to communities around the world.

Our SAGE Business Cases platform enables us to quickly publish brief, news-driven cases. Faculty and students can quickly employ the offerings in our Express Case series for classroom or online discussion. Examples include:

• How Will BLM Change Corporate Activism?
• Analyzing Pfizer’s COVID-19 Vaccine PR Strategy

We also offer longer-form cases in our SAGE Originals collection, such as the following:

• Woke-Washing: The Promise and Risk of Linking Branding With Politics
• Policing the Police: Privatization as a Means of Oversight
• Organizational Responses to Athlete Activism Post-Kaepernick: An Exercise in Decision-Making
• Nike and the Balancing Act Between Social Justice and Selling Products

Tools That Reflect the Reality of Business

For its part, AACSB has shown its deep commitment to diversity and inclusion in its 2020 business accreditation standards , in which it embeds ideals related to diversity and inclusion in six out of nine standards, compared to six out of 15 in the 2013 standards. To align with this commitment, our curricular tools must reflect the varied reality of those engaged in the global business environment, no matter their locations, roles, organization types, gender, race, age, religion, sexuality, or disability status.

As educators, publishers, and business school administrators, we have a responsibility to provide all students with not only access and opportunity, but also exposure to a wide range of perspectives. By exposing them to the true, diverse nature of business, we can prepare them for the world today and enable them to change it for the better.

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Diversity wins: How inclusion matters

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By Sundiatu Dixon-Fyle, Kevin Dolan, Vivian Hunt, and Sara Prince | McKinsey & Company

Diversity wins is the third report in a McKinsey series investigating the business case for diversity, following Why diversity matters (2015) and Delivering through diversity (2018). Our latest report shows not only that the business case remains robust but also that the relationship between diversity on executive teams and the likelihood of financial outperformance has strengthened over time. These findings emerge from our largest data set so far, encompassing 15 countries and more than 1,000 large companies. By incorporating a “social listening” analysis of employee sentiment in online reviews, the report also provides new insights into how inclusion matters. It shows that companies should pay much greater attention to inclusion, even when they are relatively diverse.

By following the trajectories of hundreds of companies in our data set since 2014, we find that the overall slow growth in diversity often observed in fact masks a growing polarization among these organizations. While most have made little progress, are stalled or even slipping backward, some are making impressive gains in diversity, particularly in executive teams. We show that these diversity winners are adopting systematic, business-led approaches to inclusion and diversity (I&D). And, with a special focus on inclusion, we highlight the areas where companies should take far bolder action to create a long-lasting inclusive culture and to promote inclusive behavior.

(Our research predates the outbreak of the global pandemic, but we believe these findings remain highly relevant. See the sidebar, “In the COVID-19 crisis, inclusion and diversity matter more than ever,” for more on why I&D must remain a priority even as the context shifts, or read “Diversity still matters” for an even deeper dive. You can also explore a related interactive for another lens on the issues.)

Read the full report here.

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Case Study: What Does Diversity Mean in a Global Organization?

• David S. Lee

Needs may differ between headquarters and regional offices.

“We have a diversity problem.”

• DL David S. Lee  is a principal lecturer at the University of Hong Kong Business School, where he teaches, researches, and advises on topics related to ethics, fintech, and governance.

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The most compelling business case for diversity yet

Four reports released by McKinsey over an eight-year period suggest that the business case for diversity, equity, and inclusion (DEI) is stronger than ever.

Diversity Matters Even More is the latest report from the leading consultancy, and builds on Why Diversity Matters (published in 2015), Delivering Through Diversity (2018), and Diversity Wins (2020).

Tracking progress and impact over this period shows that the business case for DEI is the strongest it has been, with genuine and meaningful progress made.

Now McKinsey says the new report reveals that leadership diversity is strongly linked with growth ambitions, greater social impact, and more satisfied workers.

The report says that at a time when companies are under pressure to maintain financial performance in difficult economic times, creating a culture of transparency and inclusion, and focussing on social impact can actually help deliver that performance.

Diversity Matters Even More is an extensive and comprehensive snapshot of the state of DEI, with interviews and insights from 1,265 companies in 23 countries contributing.

As well as analysing the relationship between diversity and financial performance, this is the first time McKinsey has also examined the holistic impact of diversity on the environment, local communities, and workers.

Highlights from the report include the business case for gender diversity on executive teams has more than doubled since 2015. McKinsey points to the financial outperformance gap, with the top-quartile companies in 2015 when it comes to gender diversity having a 15% likelihood of greater success. In 2023, that figure reached 39%. 

Similar trends are seen when it comes to ethnic diversity. However, there is still a lack of ethnic representation on executive teams, and the progress made is slowing.

Five strategies for diversity transformation

Based on findings from its four diversity reports, McKinsey has conducted a deep dive into the diversity data, and also conducted company interviews to gain insights from diversity leaders. 

These interviews revealed five strategies to turn words into action:

• Commit to a systematic, purpose-led approach to benefit all stakeholders. Companies should frame and pursue their DEI aspirations as core to their mission and embedded into their strategic goals.
• Embed your strategy in company-wide business initiatives while tailoring to local context. While DEI strategy is typically shaped at the top, giving local teams license to tailor to local contexts is key to building ownership and local impact.
• Prioritise belonging and inclusive practices to unlock performance. Diverse representation will have the most impact within a culture that fosters inclusion and belonging.
• Embolden and activate champions and allies by providing adequate resources and support.
• Act on feedback, including dissenting voices. A culture of feedback on DEI strategy from the workforce and wider stakeholders can provide valuable insights, identifying both strengths and opportunities for change.

In summary, despite a challenging business environment, McKinsey says the business case for diverse leadership teams is clear and growing stronger. The latest report also shows a significant link between diverse leadership and better scores on environmental and social measures.

Companies should move beyond simply increasing diverse representation to integrating DEI in a purpose-driven approach to drive positive impact.

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Building Inclusion from the Inside-Out: A Brief Case Study

The philanthropic sector believes diversity, equity, and inclusion are central to any social mission, but how can organizations ensure that their own people and processes reflect those values?

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By Sampriti Ganguli & Graham Murphy Jul. 27, 2016

The philanthropic sector is in agreement that diversity, equity, and inclusion are central to any social mission, but what does that look like in practice—especially within our own hallways and cubicles? While there’s consensus that our field has work to do in better representing and serving our diverse population, putting intentions into practice can be complicated and difficult.

Earlier this year, the D5 Coalition , a recently completed five-year initiative to advance diversity, equity, and inclusion in philanthropy, released its annual State of the Work report outlining the movement’s progress and challenges. While D5’s creation five years ago, and the growing number of social-sector institutions who partnered with it over the years, are testament to the importance philanthropy places on diversity, equity, and inclusion, its latest report found that we still have a way to go. For example, people of color are still underrepresented at foundation leadership levels—and the lack of reliable data about the number of women, people of color, LGBT people, and people with disabilities in decision-making positions within foundations presents an ongoing challenge. As D5 Director Kelly Brown stated in the report, “The data itself may not be telling the whole story because many foundations have yet to share information about personnel and grant making.”

Given this, D5 decided to focus its final report on stories of people in philanthropic organizations taking action to advance diversity, equity, and inclusion. Brown continued, “These stories can inform strategy, but more importantly they instill hope, inspire courage, and buttress our shared commitment to advance the common good.”

In the spirit of the report, we are sharing our story—stumbles and all—in the hopes that others can learn from our experience as they work toward our shared goals.

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Arabella Advisors, which since 2005 has advised foundations and other donors on philanthropic strategy, began a concerted effort five years ago to increase the diversity of our workforce. We made many mistakes in our earliest days. It took time to understand what works and what doesn’t, and recalibrate, and we have come to realize that fully embodying these values is hard, in the same way that any kind of social change is hard.

Good Intentions Aren’t Enough

Leading up to this effort, we were growing rapidly, and we increasingly heard—particularly from junior and mid-level staff—that that our workplace felt disconnected from the people and places we served. At the same time, our clients—current and prospective—were more frequently highlighting how mission-critical diversity, equity, and inclusion is to the social sector. In 2011, we made a commitment to increase the diversity of our workforce.

At first, our efforts were scattershot and disorganized. We drafted a statement of our commitment , but though the sentiment was genuine, we had no coherent strategy to achieve it. We solicited ideas from staff about how to reach more diverse networks and set up a few ad-hoc staff diversity committees comprised of people who believed deeply in the mission. But while they proposed worthy goals, they made limited progress. These ideas and committees weren’t integrated into the organization’s broader strategic plan, and it was difficult to persuade management to accept accountability for goals that that it did not fully understand.

A couple of years into our efforts, we were seeing some positives—for example, broader recruiting networks and relationships with professional associations whose members brought new experiences to our firm—but staff sentiment remained ambivalent. We also heard clients express a desire for more diversity on our project teams. This led the firm’s leadership to pressure the recruitment team to seek more “diversity candidates,” but without a clear strategy for how to do that—or, most crucially, a common understanding of what we meant by diversity—the perspectives and insights we were bringing to the table felt static.

Listening and Learning

Two years into our efforts, we took a step back, acknowledging that we had misjudged the complexity of what it meant to be a diverse firm. Because of a desire to see and demonstrate progress, we had jumped into a series of actions geared at outputs measurable by statistics, without stopping to understand the problem.

We decided to approach diversity, equity, and inclusion as we would other firm-wide strategic issues: by designating people to lead the charge and be accountable, integrating it into our broader goals and infrastructure, and identifying outsiders to fill the gaps in our expertise. A brand-new HR department took responsibility for the firm’s commitment to diversity and set a simple goal for the first year: to develop a long-term vision and strategy for what a diverse, equitable, and inclusive Arabella should look like.

The team began with two important steps focused on learning. First, it reached out to diversity experts and external groups with diversity, equity, and inclusion success stories, including D5, academia, diversity consultants, and competitors. These groups helped us understand that diversity goes beyond demographics and statistics—that it is woven into every aspect of the workplace, from the obvious (recruiting and hiring) to the less obvious (water cooler chatter, happy hour themes, and who leads presentations at all-staff meetings). They also helped us determine where we needed to train staff on issues like unconscious bias and navigating challenging conversations.

Second, the team asked staff members what they were experiencing when it came to the diversity of our workforce and how our workplace supported it. We disseminated an all-staff survey, and interviewed individuals to learn about their experiences inside and outside Arabella. To our surprise, the internal data turned out to be the most enlightening. We hadn’t previously tracked demographic data in a systematic way, and our survey highlighted the extent to which racial and ethnic minorities were underrepresented at the firm—something we could set clear goals to address. We also learned that there was a perception that the firm promoted only dominant and extroverted personalities, and that people with different personalities weren’t heard.

Diversity at an organizational level is much more complex than demographic representation. Organizations must also create an environment in which different voices are heard, different skills and backgrounds are valued and promoted, and everyone feels they can be their authentic selves without professional repercussions. By seeking outside perspective and creating a platform that allowed employees to share their feelings, we discovered that every aspect of our systems, processes, and culture feeds into how diverse, equitable, and inclusive we are.

Initial Progress and Moving Forward

Understanding the problem better means we’ve become better at addressing it. With full backing from our senior leadership and our new CEO, we implemented a number of strategies. In 2015, we set a goal of increasing the racial and ethnic diversity of the firm so that it better reflected the general population. A revamped recruiting team identified and cultivated partnerships with organizations that would connect us with candidates from a broader set of backgrounds. We forged a partnership with the DC chapter of the National Black MBA Association , for example, and co-hosted meetings and events for its members. We also affirmed our commitment to diversity, equity, and inclusion in our branding, particularly on our recruiting materials, and have heard from several candidates that this was a factor in their decision to apply to Arabella.

Simultaneously, we made a series of internal changes that went hand-in-hand with more expansive recruiting and hiring. We trained hiring managers to understand unconscious bias and how it can generate homogenous candidate pools. Prior to this work, one of our hiring criteria was “cultural fit”—a vague rationale that we now interrogated, realizing it was an umbrella under which people could lump biases. Our recruiters no longer allowed hiring teams to turn down a candidate because they were “not a cultural fit.” We also had external experts do intensive, full-day trainings with every member of our staff about what constituted an equitable and inclusive environment, including sessions on issues such as microaggressions and power in the workplace. We identified a cohort of staff from across the firm to serve as inclusion leaders, tasked with working on an ongoing basis with leadership, HR, and their peers on changing internal culture, processes, and models to better integrate these values.

Through these measures, we have begun to see progress on several fronts. For example, in 2015, we increased the racial and ethnic diversity of the firm by 32 percent, broadening and deepening the perspectives we bring to our work with clients and to our daily interactions with each other. And we formed a cohort of inclusion leaders—a cross-section of staff spanning the firm’s teams and regional offices—tasked with drawing on their experiences to drive the firm’s work on diversity and inclusion. In addition to helping us identify a number of other ways in which staff have felt disconnected, the inclusion leaders have led the development of a multi-pronged strategy to incorporate diversity, equity, and inclusion into the firm’s culture, recruiting and hiring, and client relationships. While we address the issues this cohort raises at the leadership level, staff members now drive trainings and events, as well as the broad direction of our efforts on this front.

Through these efforts, we have become better at incorporating diversity, equity, and inclusion values into our work with clients. One of our project teams, for example, was able to help a major client uncover implicit bias and blind spots in their giving strategy; this resulted in a new set of criteria for their grant making that is enabling them to reach more vulnerable populations. Living these values by being better partners to our clients is deeply satisfying.

We all have a role to play in making our field more diverse, equitable, and inclusive—both in how we treat the people who work there and in how we think about the work we do. It is a tough journey that takes time, facing hard truths, and learning from mistakes, but the change we want to see in the world needs to start in our own hallways. 

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Diversity And Inclusion: Best Practices And Case Studies

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A  company culture where employee s  feel empowered to use their voice is the  most  crucial  talent imperative  facing workforce planners  today .  A   Gallup  poll  revealed that only 55% of  US workers feel that their organization prioritizes Diversity & Inclusion (D&I)  policies.   

This low figure is especially worrying when contrasted with the  percentage of new-age workers (64%) for whom diversity is a crucial factor before accepting a job offer.   

Achieving diversity in the workplace is not just a n  ethical me tric that needs to be ticked off to placate stakeholders. It is also a fiscally important metric.   Companies in  the top quartile for ethnic and cultural diversity   experience ~40% more profitability than those in the bottom fourth quartile.   

We have covered these benefits in detail in our discussion on   Measures to Implement Diversity & Inclusion.  

In this post, we will focus our discussion on highlighting some  best  practices when  it  comes to implementing D&I through some exceptional case studie s .  

Outreach Programs Should Be Your First Step  – IBM    

Nothing shows the world that  you’re  serious about your D&I program than a fully-fledged outreach program.  These outreach initiatives show that you are actively seeking to incorporate diversity into your company ethos and are willing to go the extra mile to make people feel more inclusive.   

A great example of this is IBM’s Girls’ Outreach  Program .  Started in 2008 to mitigate the  declining  pipeline  of female tech talent,  the program encourages girls to think seriously about a career in tech and business.  The highly successful program targets girls in the 15-16 years age range and offers them a chance  to shadow senior employees and gain practical experience to increase their knowledge and skills.  This has a direct correlation with the number of girls  expressing interest in taking up an apprenticeship  or participating in future placement drives.  

Since 2012, the program has shifted focus to schools with a high percentage of  Black, Asian & Minority Ethnic (BAME) students.  

Set Ambitious Goals & Achieve Them  –  Accenture  

Accenture was ranked no 1 in the Thomson Reuters’ 2018 D&I index. They were ahead of their peers by a large margin. Their secret?   

The company set a n  ambitious  challenge to achieve 50/50 gender balance by 2025  and have women comprise 25% of their managing directors by 2020.   

To achieve this, the company has  taken  several  steps ,  including:  

• Setting clear & measurable diversity targets  and publishing its workforce demographics across countries like the US, India, Japan,  & South Africa.  
• Driving initiatives that provide women with training for in-demand skills like AI, Analytics, Cloud etc.  
• Collaborating across business and government to further gender equality in the workplace.  

Suffice to say,  by  attuning  the entire organization towards achieving this goal, Accenture has completely overhauled its hiring and promotion strategies.   

Other t op IT enterprises are actively  hiring   diverse  talent across  different  sexual orientation s , ethnicit ies  & physica l disabilities as well.  

Set Up Empowerment Programs for the Marginalized – GAP  

The garment industry is notorious for exploiting cheap  labour  in third-world countries. Most of the clothes available in the Western world are often spun by underpaid ,   female  workers in  countries like Bangladesh and India.   

Launched in 2007 by apparel giant GAP,  the  Personal Advancement & Career Enhancement (PACE)  program is actively imparting women with foundational life skills, technical  training  and  support to help them advance in their professional and personal lives.  

In 2016, GAP expanded the program to include adolescent  girls as  well. As of 2020, over 500,000 women in 17 countries have undergone this life-changing program.   

Empowerment programs can even be something  like   creating health insurance coverages for transgender folks as well. Most of us take our health coverage for granted. However, traditional coverages often leave out conditions that are uni que to the transgender community. The Lalit Suri Hospitality  G roup in India has taken their inclusi vity measure to the next level by not only hiring trans individuals but also providing them coverage for Sex Affirmation surgeries in their  medi -claim.   

Best Practices  To  Ensure D&I  

While the above case studies have been eye-opening  in regards to  how far some companies are willing to go to create an inclusive atmosphere, they are simply not practical for enterprises operating  at a smaller scale.   

Draup has curated the following list of best practices to help workforce planners  ensure that the workplace does not leave a  particular community  behind.   

• First & foremost, perform a thorough  audit of your existing diversity scenario.  The first step to solving a problem is acknowledging it.  
• Ensure that everyone, from the janitor to the CEO, is  committed to upholding diversity values.  This  has to  be ensured right at the onboarding process itself.   
• Opt  for transparency wherever possible.  It’s  one thing to boldly proclaim that you are inclusive, and another to publicly display the numbers to back your claim. This diversity dashboard  should be accessible at all times  and visible to every stakeholder.  
• Develop a D&I roadmap.  This could be something as simple as committing to hire women to a certain percentage of leadership roles or even something as like  committing to create safe spaces & environments for minorities to air their grievances.  
• Monitor & report on progress.  Ideally, every  company  wo uld have a Chief Diversity Officer to take care of this. If not, there should be a SPOC for all diversity-related matters.  

You can also make use of third-party consultants or tools like  Draup’s  Diversity Navigator to help your enterprise achieve its diversity goals.   

Using the Diversity Navigator, you can recruit candidates with queries such as  “female data analyst in the  B ay  A rea”, “Black female data scientist in New York ” or “Transgender Sales Executive in  Denver.”  

The tool also features a Hiring Opportunity Index and provides a deep dive into their skill sets while also ranking them in  terms of New-Age skills set.  

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Case Study: Delivering for women at MTN

Paul Norman explains how MTN has embedded its approach to creating diversity and inclusion for women

MTN Group was established in 1994, at the dawn of South Africa’s democracy. Today, we serve over 270 million customers with products and services across consumer, enterprise, fintech, wholesale and digital services, through a 19,000-plus workforce that represents over 70 nationalities, multiple ethnicities and languages, and four generations – with 50% being Millennials or younger. This makes us not just one of the largest, but among the most diverse homegrown African companies.

MTN has been organically strong on diversity throughout its history, but the major pivot was in recognizing that diversity and inclusion is a journey. Continuing to make progress requires intentional, mindful action to foster a sense of belonging among our people, customers, business partners, communities and stakeholders. Our mindful journey began in 2019 with us framing a deliberate vision, philosophy and commitment to diversity and inclusion. That vision is to be the most inclusive and successful organization across Africa and the Middle East, putting diversity into action to help employees, customers and communities thrive. It is inextricably linked to our inclusive purpose: the strong belief that everyone deserves the benefits of a modern connected life.

To deliver on diversity and inclusion, we are driven by our guiding principles and a framework based on demonstrated leadership, contextual recognition of diversity, and conscientious action. Accountability is our north star, so it was imperative to identify outcomes that make an impact for those we serve, assessed via measurable goals and actionable performance targets.

Embedding responsibility

To embed accountability for diversity and inclusion, it was vital for us to institutionalize and embed a leader-led approach.

Responsibilities are shared by senior personnel. The agenda is ultimately owned and led by the group president and chief executive, while the group chief HR officer is the custodian of the diversity and inclusion agenda, responsible for developing, executing and reporting on strategies relating to people and culture. The group chief sustainability and corporate affairs officer is responsible for sustainable community impact. Our boards and their sub-committees serve as oversight bodies, keeping us accountable. As a whole, our leadership – comprising CEOs and C-suite executives – are critical stakeholders for the diversity and inclusion agenda. They are held equally responsible for creating on-ground impact, as measured by our performance goals and targets.

Since 2019, our strategy for diversity and inclusion has matured to be deliberate, targeted and mission-oriented. Through it, we seek to continuously understand, recognize and transform our ecosystem. Women have played an immeasurable and equal part in building MTN over the last 28 years. On boards and executive committees, among core business leaders and in our workforce at large, MTN has been steered by strong, bold and fearless women who continue to shape our story. Our commitment to gender equality comes from recognizing that MTN’s purpose, identity, culture and progress will only be realized with a work environment that is equitable. In line with this, our new strategy, Ambition 2025, squarely places ESG and its imperatives at the core of our priorities. Today, women constitute 39% of MTN’s workforce across our markets. We are committed to growing that share, becoming gender equal by 2030. But the true value of equality is in creating greater equity for women in our workforce. To this end, we are targeting several equity drivers. All are supported by measurable targets, performance goals and transparency mandates to measure achievements and ‘work-on’ areas of improvement.

Target-based goals to increase women in leadership, succession and in critical roles

These include near-, medium- and long-term commitments to align with our overarching agenda for gender equality and equity. Targets are defined for specific employee groups, such as women in tech and management roles (see graphic below).

Linking ESG-led performance and rewards to the diversity and inclusion agenda

Inclusion targets are part of our incentive framework, relating to both short-term and long-term incentives. It is a hallmark of our leadership-led accountable approach. For example, executive leadership across markets have a long-term incentive target (to achieve 50% women in the workforce by 2030). Each operating company then has specific nearer-term targets based on the current representation of women. A short-term target, applicable to group executive members and market chief executives, is to foster and improve our inclusive culture, based on employee sentiment as measured by our regular surveys.

Specialized programme for women to enhance future leadership pipeline

Rising Leaders, our marquee programme aimed at women in mid- and senior-management roles, aims to build our internal pipeline of women leaders.

Mandatory targets for the inclusion of women in critical skills and future-of-work programmes

We have set a minimum target for 30% inclusion of women in all our critical skill and future-of-work programmes, and job shadowing opportunities, to widen women’s skill exposure.

Setting hiring and exit standards and targets to consciously improve intake of women

We have a group-wide 60% women hiring target, supported with panel diversity and inclusion standards, to ensure we remain on course to grow the proportion of women in the workforce and minimize the potential for unconscious bias. This is coupled with exit standards to improve our retention strategies.

‘Inclusion sentiment’ sense-checks to listen and learn from employee feedback

Our rapid feedback survey helps to understand employees’ experience of inclusion. Improving sentiment among women is a particular focus.

Raising awareness, consciousness and knowledge through campaigns and learning

A range of learning and development initiatives help to improve understanding, promote better allyship and enable action-oriented inclusion practices. We dedicate the month of November each year to celebrating our diversity.

Policies and practices to create flexibility and inclusion in the workplace

Our policies and practices are frequently evaluated and refreshed where needed to promote inclusion.

Measure gender pay parity to promote pay equality across our workforce

For the first time in 2022 we have evaluated our group-wide gender pay parity status across the market. We will institute corrective strategies to gradually close the gaps revealed.

Delivering impact in 2021-22

The impact of our approach can increasingly be seen across MTN. For example, in 2022, we improved women’s representation in the C-suite, appointing three new women chief executives – in Cameroon, Rwanda and Uganda. We have improved our future leadership pipeline, with over 200 women completing the Rising Leaders programme in the last 18 months. We launched our ‘Anytime Anywhere’ hybrid work flexibility policy, which aims to promote care, equity and inclusion; introduced our inclusive communication policy, which guides how we communicate; and implemented sentiment sense-check surveys. Diversity and inclusion are among our highest-rated sentiments.

We have also improved our transparency by reporting on our global gender pay parity for the first time as part of our 2022 Annual Integrated Results, based on an exercise across 18 MTN markets, following the UK’s gender pay parity methodology. We declared our mean global pay gap at about 25%. That indicates the need to substantially improve women’s representation at senior levels and in critical roles – and equally to minimize the potential for unconscious practices that impact women. The exercise has had real value in helping us to develop a differentiated perspective and identifying our next steps.

Wider ambitions

Our commitments on gender equality cascade into our businesses. In Nigeria, for instance, MTN’s innovation team is developing a specialized product to enhance, simplify and enable financial accessibility for women across its vast regions. And increasingly, we seek to promote gender equality in our communities too. We have invested in financial and digital inclusion for women and girls, contributed to social and economic development initiatives, and supported global initiatives to reduce gender-based violence.

Future priorities include co-building a stronger pipeline for girls in STEM fields in partnership with African universities, and career re-pathing for women in alternative skill domains. Our focus is also gradually widening to address other important inclusion agendas, such as disabilities and differently-abled. As with all systemic transformations, our mission to achieve inclusion is an evolutionary journey.

Generating social impact in a dynamic global environment needs active sensing: we have to continuously learn from complexities in our internal and external ecosystems. Global revolutions and events like ESG, #MeToo, the pandemic and those that lie ahead will shape the lives of people in unexpected ways. The most valuable impact we will make in the future will be to continuously listen, absorb and act conscientiously.

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Why diversity matters

We know intuitively that diversity matters . It’s also increasingly clear that it makes sense in purely business terms. Our latest research finds that companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians. Companies in the bottom quartile in these dimensions are statistically less likely to achieve above-average returns. And diversity is probably a competitive differentiator that shifts market share toward more diverse companies over time.

While correlation does not equal causation (greater gender and ethnic diversity in corporate leadership doesn’t automatically translate into more profit), the correlation does indicate that when companies commit themselves to diverse leadership, they are more successful. More diverse companies, we believe, are better able to win top talent and improve their customer orientation, employee satisfaction, and decision making, and all that leads to a virtuous cycle of increasing returns. This in turn suggests that other kinds of diversity—for example, in age, sexual orientation, and experience (such as a global mind-set and cultural fluency)—are also likely to bring some level of competitive advantage for companies that can attract and retain such diverse talent.

Diversity wins: How inclusion matters

The business case for inclusion and diversity (I&D) is stronger than ever. Taking a closer look at diversity winners reveals what can drive real progress.

McKinsey has been examining diversity in the workplace for several years. Our latest report, Diversity Matters , examined proprietary data sets for 366 public companies across a range of industries in Canada, Latin America, the United Kingdom, and the United States. In this research, we looked at metrics such as financial results and the composition of top management and boards. 1 1. The Women Matter research McKinsey published in 2007 identified a positive relationship between corporate performance and gender diversity. We have since expanded the focus of this research to examine diversity more broadly, from gender to race and ethnicity to sexual orientation. Our latest research examined metrics such as total revenues, earnings before interest and taxes, and returns on equity for the years 2010 to 2013. In addition to capturing gender information, the data set included information on ethnicity, race, or both from publicly available sources. For a detailed explanation of how we conducted our research, please see our full report, Diversity Matters (PDF–946KB). The findings were clear:

• Companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians.
• Companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians (exhibit).
• Companies in the bottom quartile both for gender and for ethnicity and race are statistically less likely to achieve above-average financial returns than the average companies in the data set (that is, bottom-quartile companies are lagging rather than merely not leading).
• In the United States, there is a linear relationship between racial and ethnic diversity and better financial performance: for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8 percent.
• Racial and ethnic diversity has a stronger impact on financial performance in the United States than gender diversity, perhaps because earlier efforts to increase women’s representation in the top levels of business have already yielded positive results.
• In the United Kingdom, greater gender diversity on the senior-executive team corresponded to the highest performance uplift in our data set: for every 10 percent increase in gender diversity, EBIT rose by 3.5 percent.
• While certain industries perform better on gender diversity and other industries on ethnic and racial diversity, no industry or company is in the top quartile on both dimensions.
• The unequal performance of companies in the same industry and the same country implies that diversity is a competitive differentiator shifting market share toward more diverse companies.

We’re not suggesting that achieving greater diversity is easy. Women—accounting for an average of just 16 percent of the members of executive teams in the United States, 12 percent in the United Kingdom, and 6 percent in Brazil—remain underrepresented at the top of corporations globally. The United Kingdom does comparatively better in racial diversity, albeit at a low level: some 78 percent of UK companies have senior-leadership teams that fail to reflect the demographic composition of the country’s labor force and population, compared with 91 percent for Brazil and 97 percent for the United States.

These numbers underline the work that remains to be done, even as the case for greater diversity becomes more compelling. We live in a deeply connected and global world. It should come as no surprise that more diverse companies and institutions are achieving better performance. Most organizations, including McKinsey, must do more to take full advantage of the opportunity that diverse leadership teams represent. That’s particularly true for their talent pipelines: attracting, developing, mentoring, sponsoring, and retaining the next generations of global leaders at all levels of organizations. Given the higher returns that diversity is expected to bring, we believe it is better to invest now, since winners will pull further ahead and laggards will fall further behind.

This article is adapted from the report Diversity Matters (PDF–1,732KB), which was re-released in February 2015.

Vivian Hunt is a director in McKinsey’s London office, where Dennis Layton is a principal; Sara Prince is a principal in the Atlanta office.

The authors would like to thank Andrea Alexander, Mauricio Arnau, Lori Dobeus, Kirill Dushkin, Lauren Miller, and Katie Smith for their contributions to this report.

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