If you have a discussion about management in Australia, attend an organisational training course, or wander into an academic conference, you will hear a lot about DEI (Diversity, Equity, Inclusion). It is to the 2020s what deregulation was to the 1980s — THE hot topic.
The challenge for organisations is that hot topics invariably carry with them a lot of passion and no small degree of risk, with proponents and opponents seeking to use every opportunity to push their agenda. For those already manifesting this and who are taking exception at the use of DEI over the range of other acronyms in the space:
I’ve chosen this acronym not because I think it’s the “best”… but because I think it’s a start. There is no shortage of acronyms in this space, from “EDI” to “D&I” to “DEIB,” “IDEA,” and “JEDI” (the “B” is for “belonging”; the “A” is for “accessibility”; the “J” is for “justice”). The most popular one? That varies by industry, region, and generation. I have lost count of the number of earnest advocates and practitioners who have told me that their acronym of choice is best and all others are outdated or insufficient.(Zheng 2022)
As you will have gathered by now, the DEI space can be highly challenging for managers and, ironically for a topic that should be bringing everyone together, be divisive for a team or organisation.
Those who are fully paid up members of the DEI movement have been known to treat questions about DEI’s veracity as hate speech. Those opposed to DEI, term it another round of political correctness on steroids, and are equally passionate in their ridicule — often vilifying its proponents. In between these two groups sit the 90% who are, much like those Forging Resilience Through Adaptability, on a continuum of acceptance, understanding, and questioning.
In framing DEI as a strategic challenge, I am not going to engage in full throated support or opposition of the precepts, instead outlining the challenges facing organisations in this space.
Meaningful Change Vs Activism
One of the interesting aspects of DEI is that it seems largely unaffected by economic challenges. Compare and contrast to some of the environmental policies which abounded shortly before the 2007 GFC. One moment organisations were going all in on reducing their carbon footprint, the next — due to ‘unprecedented economic factors’ — the sum of efforts comprised removing styrofoam cups in the kitchenette. Given the tendency of organisations to pull initiatives when times get tough, it is testament to the resilience of DEI given that Covid, the recent economic downturn, and impending recessing have not dented the thirst for DEI initiatives with most Boards.
Survey data shows that this thirst is translating into measurable action with 43% of organisations reporting they are focussed on greater transparency in the pay and performance process, and the same percentage are engaging in reducing discrimination and bias. Yet survey data also shows that while diversity is on the up and up, equity and inclusion remain areas of inaction for most organisations. Statistics that are only likely to increase as ‘underrepresented’ groups start comprising an ever greater number of survey respondents. This is because pointing out problems is easy, finding solutions in a space that needs evolution not revolution is incredibly complex and can even look like inaction. This complexity is only going to grow as greater DEI in organisations means more viewpoints, and more viewpoints means more opportunities to please the people you favour and anger everybody else.
On the face of it, and what all DEI consultants and Chief Diversity Officers are quick to promote, is that organisations with executive teams in the top quartile for diversity are 36% more profitable than organisations whose diversity is in the bottom quartile. The challenge for organisations is understanding when this is causation or correlation. The case can be made, and without too much difficulty, that high performing and highly profitable organisations are those who pull all the levers, including DEI. When it comes to being bold with efficiency aspirations they leave nothing on the table. Begging the question, are they better performing because they have better processes and people or are they better simply because they have more diversity, equity, and inclusion?
Where we are on more certain ground is that by having diversity at all levels of an organisation the chance of hiring the best people goes up exponentially, because ‘no one’ feels that this isn’t the organisation for them. Thus, increasing the chances of having great people in roles who will achieve maximal success.
This is where DEI has both the potential to unlock and undermine an organisation’s potential. Delving back into the survey data and we find a third of respondents cite hiring processes as a blocker to achieving DEI goals. The fundamental problem with this statistic is that it reduces DEI from a valuable process to a numerical outcome. Once this happens, we enter the arguably dangerous space of quotas in which DEI ceases to be about inclusion, equity, or diversity, and becomes about taking a sample of a given population and then mandating that the organisation must employ roughly the same percentages in all roles — most particularly senior ones.
In this context, language matters — as does bias — and when seeking to improve the workplace and society, it is critical that belief in what can make the world a better place does not descend into ideology.
Ideology is often seen as synonymous with, or as a subset of, belief. But it is better to think of ideology as a distinct system. This is because a belief system seeks to sample across ‘reality’ and filter for hits or confirmations. An ideology by contrast seeks error rather than confirmation, and then takes the additional step of attempting to destroy what has been filtered out as anomalous.
The executives and Boards who lead organisations need to take this into account when planning for DEI because it, like any other organisational philosophy, can be either a force for good or ill. When leadership cease to question the merits of each new initiative and test it in a robust environment of reasoned deliberation, an organisation is put on a path to Jonestown.
One way to avoid the pitfalls is to be systematic in the development of strategy, consider the objectives, and what is the desired level of impact that is sought from DEI programs. In other words, there is no one size fits all and embracing everything lest it look like doing nothing brings as many risks as inaction.
Effective DEI strategy requires:
- Internal and external initiatives.
- Programs that are strategic rather than ad hoc.
- A clear organisational vision, operationalised with a SMART action plan.
- People at all levels of the organisation held accountable for the goals.
By ‘all people’, I mean a mix of business leaders, HR professionals and DEI specialists who are aligned with organisational values — rather than trying to impose a set of goals based on their personal preference.
Because it is unlikely that all initiatives can be acted on at once, DEI action plans need to be prioritised. Awkwardly, this does mean making a value judgement on what will be tackled — even things that are asserted as ‘human rights’. The pressure for a Board or executive is that the prioritisation they choose may not align with activist pressure to address the most needy or underrepresented first. Instead, choosing long term success over high profile wins by focussing on what is easiest to implement and what has the highest level of impact. This may sound callous, but getting runs on the board is essential for any DEI program to build momentum, lest it be confounded by internal and external political and financial pressure. Pilot programs are a great way of approaching this challenge as they can allow for iteration before trying to roll out a program for all stakeholders.
Be it a pilot or companywide program, measurement is essential and, in this space, the most efficacious dimensions across which to evaluate impact are:
- Organisational Perception: this is the way in which an organisation is perceived by stakeholders. Is it considered fair and with minimal bias or is the perception one of monolithic judgement of right and wrong? Is the organisation connected with the surrounding community or is it superimposed on the landscape — seen more as plundering rather than scaffolding the local area.
- Personal Experience: addresses the level of authenticity in employees. Do they feel a sense of connection with the organisation or is their job nothing more than a pay cheque? Do they feel their work is meaningful or does it have little impact on organisational success? Do they feel comfortable speaking out at work or is there a strong need to conform to the prevailing culture?
In closing, this all comes down to balance — ensuring that belief doesn’t descend into ideology. A process that is founded on the bedrock of psychological safety. I will save discussion of this complex topic for a future article, for now it is sufficient to say that DEI, much like psychological safety, has considerable benefits, most notably in creating:
an atmosphere where one can take chances (which experimentalism implies) without fear and with sufficient protection (…) thus a climate is built which encourages provisional tries and which tolerates failure without retaliation, renunciation, or guilt.(Schein and Bennis 1965, 44-45)
Good night, and good luck.
Lily Zheng (2022) DEI Deconstructed, Berrett-Koehler Publishers.
Schein, EH, and Bennis, WG (1965) Personal and organizational change through group methods: The laboratory approach, New York: Wiley.