Handling corporate messages relating to diversity and inclusion is a sensitive process. Diversity, by nature, is a very personal subject, especially so for those whom encounter issues relating to it. For-profit corporations—no matter how considerate—are structured to offer legal and commercial benefits to their owners, and thus must consider what they have done to earn the right to lead conversations on diversity.
Scrolling through mainstream media and LinkedIn bares witness to big brands celebrating diversity. This is great – customers, suppliers and employees should feel far more comfortable associating with brands that provide a window into inclusive cultures than those that don’t. However, there is a difference between celebrating diversity and celebrating the benefits of diversity.
McKinsey has been producing reports on corporate diversity for the last seven years, beginning with Why Diversity Matters in 2015, then following with Delivering Through Diversity in 2018, and then Diversity Wins: How Inclusion Matters, in 2020. While the focus on gender and ethnicity is narrow, revisiting the metrics over those years using a sample of 1,000 companies in 15 countries has offered a source of empirical evidence that underscores the corporate benefits of diversity and inclusion.
Not only does the latest report highlight the financial outperformance of companies sitting in the top quartile for diversity (measured by EBIT margin vs. national averages), but it also shows the downside for those in the bottom quartile:
Analysing diversity and inclusion along such narrow criteria does limit our insights into the subject; however, true diversity that adds to a rich corporate tapestry extends far beyond ethnicity and gender. Think about the human resources that make up your business’s culture as the ingredients of a cake. If the two ingredients you had to work with were flour (gender) and water (ethnicity), you’ve got the beginnings of bread, perhaps, but it lacks the ingredients to make it rise and to give you any rich and satisfying flavours to delight the palate.
Now cast your eyes around the office (or your next video call matrix) and consider other forms of workplace diversity:
- Age
- Citizenship status
- Sexual orientation
- Sexual appearance
- Physical ability/disability
- Mental ability/disability & neurodiversity
- Education diversity
- Religious & spiritual beliefs
- Relationship/family status
- Socioeconomic background
This list is not exhaustive, but it should get you thinking about the characteristics that your culture has imported from the opportunities and challenges that those with various life journeys and experiences have faced: How has your brand and culture evolved and become more empathetic from your peers and colleagues enduring class discrimination? A maternity experience? Devotion to religion? Autism or attention deficit hyperactivity disorder? Marital adversity? Gender transition? Old age? Youth?
These examples of diversity are not just badges of honour for your brand to wear and promote on LinkedIn, these are stories and assets that will allow your brand to be more authoritative and empathetic toward its customers, stakeholders and the community.
Recently a large US bank, promoting its proactive policy regarding ethnic diversity, promoted its statement on the topic via a LinkedIn post. Again, great stuff. However, the CEO’s post would have been far more engaging if it had taken the form of the story of an employee from an ethnic minority talking about their experience within the group. Just as the most effective marketing for a brand comes from third-party advocacy, the most effective illustration of your brand’s culture of inclusion and diversity will come from those embedded in that culture. And if your executive team is warm, welcoming and engaging enough, hopefully those stories can come to light without you even having to prompt them.
Interest in, and a willingness to engage with, your brand—whether that be from investors, customers or suppliers—is being driven more by corporate social responsibility as generations evolve.
According to Morgan Stanley’s 2019 Sustainable Signals report, the decision-making process between millennials and the average consumer are stark, and, while there wasn’t enough sample data to warrant presentation, the observation was that Gen Z use of corporate social responsibility in decision-making for consumption and investments outweighed even that of millennials.
Showcasing the good that your firm does through owned, earned and social media will only get more important as trillions of dollars in intergenerational wealth cascades from baby boomers to Gen X and millennials. As such, taking a considered approach to how you communicate your culture of diversity and inclusion should be a priority boardroom agenda item.