Is ROI the Right Case for D&I?

Is ROI the Right Case for D&I?

Michelle Kim, co-founder and CEO of the diversity and inclusion consultancy Awaken, is tired of making the business case for D&I. That’s not because the business case isn’t strong enough, Kim writes in a recent post at Medium, but because she has found that the executives who demand a bottom-line argument for diversity are usually looking for a reason not to invest in it. In other words, “We’re wasting too much time trying to convince those who don’t have the desire to be convinced.”

The problem with making the case for D&I on the basis of the return the organization can expect to make on that investment, she argues, is that D&I is hard to do: It’s uncomfortable, it requires organizations to question their norms and processes, and it’s a long-term game with no quick fixes, in which progress is often hard to quantify. With a focus on ROI, it’s too easy to look at the short-term outcomes of a D&I program and conclude that it isn’t working, when really it’s just getting started:

Creating a diverse and inclusive workplace requires a multi-pronged, iterative, and long-term strategy. It takes real commitment to continue what sometimes could feel like an endless journey. Sometimes you’ll take one step forward and three steps back. You’ll need to constantly reevaluate your approach because the world of D&I is constantly changing (and it always will).

If you’re only focused on the quantifiable ROI of D&I, it’s not going to be enough to fuel this long term battle. You’ll end up looking for that “checklist” that merely gets you to comply with what’s minimally required. You’ll treat D&I as a crisis prevention strategy.

It’s like going on a crash diet to see a different number on a scale, but not really changing your overall lifestyle. The scope of your goal is too narrow and your vision limited. To achieve lasting change, you have to focus on something bigger than what you can measure in the short-term.

As more research accumulates looking at the business case for D&I, that case is becoming even stronger and easier to make. Nonetheless, one of the means by which diversity leads to greater innovation and profitability is by generating productive conflict, which is by nature an uncomfortable process. As Kim points out, it’s much easier to have a homogenous team that will tend to see things from the same perspective and rarely challenge each other to question their assumptions. Indeed, in some sense it is precisely because D&I is hard that it is so valuable, but capturing that value involves thoughtful work to create an environment of psychological safety for all employees.

Even skeptics of the direct business case for D&I don’t contend that it is an unworthy goal for organizations to pursue. A farsighted D&I strategy trusts that even if greater diversity does not influence performance this quarter or this year, the social good it achieves will generate economic rewards in the long term. There’s also another way in which the social impact of D&I translates into a direct business interest: In the age of HR as PR, a commitment to diversity is an increasingly meaningful element of both employer and consumer brand. Companies that decline to invest in D&I because their leaders don’t see the ROI may soon find themselves out-competed in an increasingly diverse talent market and among ever more socially conscious customers.