The power of Diversity and Inclusion: How it can make your business more successful

A few months ago, I met a senior executive who told me that there's something he must address in his company. He came to the conclusion that they aren't sufficiently diverse, lacking enough women, ultra-Orthodox individuals, and Arabs in the company. He's convinced that “If we change the composition of our workforce, our image will improve both in the eyes of the public and our employees”

The senior executive is correct about improving the organization's image. Companies with tens or hundreds of millions of dollars in valuation should take on some form of social responsibility. He's also right about the internal impact - employees in general, and those from Generations Y+ Z in particular, are seeking meaning beyond just a salary, benefits, and career development. One of the organizations I coach acknowledges not only the Jewish holidays but also Christian holidays (Christmas) and even Muslim holidays (Eid al-Fitr). The value to the organization was tremendous. You can talk a lot about an open and inclusive organization, but when an Muslim group manager stands in front of a hall filled with employees and talks about the sources of the Muslim holiday (while a wonderful smell of “Knafeh” is in the background!), you know that you're working in a place that's open, healthy, and promotes an important social agenda.

It goes well beyond fairness or public relations - it's about achieving success in the business world

There are two crucial points that make the topic of diversity so important. Firstly, individuals are at their best when they can naturally operate freely and are accepted by their environment as they are. Additionally, a point that many tend to overlook is that diversity is directly linked to excellence- based on wide research and my practical experience, I can confidently state that diverse organizations are stronger.

Various studies consistently highlight that one of an organization's most valuable assets is its diverse composition of people. Such diversity is more effective in problem-solving because it provides a wide range of creative ideas, thereby ensuring a competitive advantage for the organization. Research also indicates a number of advantages to having a diverse organization:

1. Stimulating Innovation and Increasing Organizational Productivity: Advantages characterized by flexibility and adaptability in a world of rapid changes in customer demands.

2. Tailored Response to External Customers Worldwide: Addressing global customer needs, preferences, and economic demands across different cultures.

3. Clear Advantage in R&D,  particularly regarding technological breakthroughs and creativity.

4. Higher Level of Collaboration,, as individuals from different backgrounds have honed the skill of creating partnerships with those different from themselves over time.

In essence, diversity unleashes new ideas, customized solutions, and innovative approaches to tackling challenges. This, in turn, provides organizations with direct benefits in terms of differentiation and innovation

Building a diverse organization is not simple at all

People tend to prefer homogeneous groups - working with those who are similar to us. Additionally, the human tendency to resist change often hinders attempts to diversify the composition of a group. Moreover, a "diversity organization" inherently presents daily challenges that are not straightforward. When mismanaged, it can lead to significant pain and tangible business damage. Differences in language, political and ideological stances can be translated into corresponding behaviors that, in turn, create daily conflicts and tensions.

I worked with an organization that experienced a minor crisis during Christmas: In addition to the traditional Christmas Happy Hour, one of the employees requested placing a Christmas tree near her desk. That year, Christmas and Hanukkah overlapped, and another employee, religious Jew, felt strongly that having a Christmas tree in the shared space was discomforting for him. So, what's the solution? Do you honor the request, tell him to deal with it, or perhaps allocate a week for Hanukkah and a week for Christmas? I believe the second option is the right one, but there's definitely complexity here.

A different scenario I encountered was during what was termed the "Stabbing Intifada" (2015-2016). These were times when the Israeli streets were very tense - Jews were afraid of stabbings by Arabs, sometimes by their fellow citizens or employees. People would avoid eye contact on the streets, and the experience was understandably frightening - also for Arabs who were automatically suspected of violence. Could this happen in an advanced software company? It's unlikely, but the tension affected almost everyone. How do you approach such a diffuse issue?

To add another layer of complexity, many Jews are unaware that Arabs are quite a diverse society themselves: Muslims, Christians, Druze, and Bedouins represent different, and sometimes conflicting, perspectives. We decided to create dialogue, meaning we talked with our Arab employees, listened to their concerns, and, most importantly, expressed our commitment as their employers. Recognizing the diversity among them, we conducted personal conversations instead of group discussions (which tended to lead to tense silence). These conversations held significant value, as they slightly eased tension, and especially reinforced the long-term connection of Arab employees.

How to nurture a diverse and inclusive organization

A strategic plan is required which is different from a vague statement of a diverse organization. What does it mean? First two basic things: You need to emphasize the importance of the subject and the creation of organizational discourse around it with guidance of managers and employees; Also, encouragement of using a single language (for example - managing conversations in English in an Israeli organization employing new immigrants who are not yet proficient in Hebrew). But, in order for diversity to really work, the staff needs to feel that the management is genuinely interested - beyond the declared vision, which is always nice, there is no substitute for transparent behaviors: A CEO I coach led a group of "female leadership" in the organization he led. Another CEO participated in an employment conference of the LGBTQ+ community. It is clear that such action carries a strong message to the rest of the people.

Embedding the company's values within key organizational processes

The company’s internal processes reflect its culture and guide daily behavior. Therefore, It is crucial to integrate diversity values into these processes. Recruitment, for instance, is a powerful tool for establishing diversity within an organization. The challenge here is to avoid recruitment biases such as the "tendency to favor those similar to me," where men recruit men or secular individuals recruit secular individuals, and so forth. The key lies in ensuring that throughout the recruitment process - from job description to the interviewing flow and decision making - there is unbiased representation. Today, there are organizations that define recruitment goals and HR metrics that relate to various demographics - percentage of Women Engineers versus Men or Percentage of employees from minorities, etc’. There is substantial rationale in this approach: A diverse sales team, for example, addressing a diverse customer base can enhance its effectiveness through internal diversity.

Beyond recruitment, leading organizations have begun to incorporate diversity metrics in the evaluation and reward of managers. Such organizations typically operate a "Succession Planning" program to identify and nurture talents within the organization, promoting diverse future leadership.

Gillian Anderson and Jennifer Nadel wrote a book called "We" in which they outline four key strategies for fostering a diverse organizational environment, with a focus on promoting female leadership: Eliminate - avoid recruitment biases, promotion biases (as mentioned earlier); Expand - broaden recruitment channels for new demographics; Encourage - create opportunities for women in the company and emphasize their success; Engage - as a team leader, personally exhibit an example and actively promote female leadership within the company.

The business value of a diverse organization is immense, there's no doubt about that. To succeed in this journey, deep thought must be invested and a clear strategy built that aligns with the organizational DNA. Much like many decisions we make, optimism alone won't suffice in the long run; only a well-formed and inspiring worldview will.