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.
From our research at CEB, now Gartner, we know that most mergers and acquisitions are not clear successes. As with other forms of major enterprise change, there are many possible reasons why two companies might fail to integrate: culture clash, product mix-ups, stalled growth, complex technology integrations, and so on. According to INSEAD professor Quy Huy, another reason M&A can fail is because the communication plan is overly positive and too frequently impersonal.
Huy believes that part of the problem is what he calls the “trap of professionalism,” a symptom of modern corporate culture in which negative feelings are suppressed and politeness is overvalued relative to raising constructive tensions that can improve ideas. Additionally, once disagreements bubble to the surface, the response is often more rosy messaging rather than straightforward attempts to discuss and address any issues.
Huy discovered how this dynamic of productive disagreement plays out in the context of M&A by interviewing 73 managers across both organizations involved in an acquisition. At first, both sides were excited by the possibilities of their merger. The acquirer saw value in gaining specialized expertise within its walls and the acquired company was excited about having the resources to take on more ambitious projects. But tension quickly arose, initially due to differences in the philosophy of each organization’s sales strategy, and later due to challenges in IT integration.
The issue wasn’t that these tensions existed, but that they were never discussed or addressed.
In the past few years, numerous studies have indicated that on top of the social good it can do, diversity and inclusion has bottom-line benefits for organizations that invest in it. Research has found that diversity helps teams think better by disrupting conformity, that companies with more women in leadership make more money, and that businesses that engage in racial discrimination are more likely to fail. Our work at CEB, now Gartner, also finds that organizations tend to perform significantly better when they have more inclusive work environments. While some scholars have questioned a few of the links between diversity and performance or argued that this isn’t the right reason to invest in D&I, there is plenty of material out there with which to make the business case for it.
Another way of thinking about the value of diversity is in terms of the costs of homogeneity and exclusivity. MIT business professor Evan Apfelbaum recently dove into the specific ways diverse teams can improve teams’ decision making in an interview at the MIT Sloan Management Review. Apfelbaum’s research found that diverse teams spent more time deliberating important decisions, while more homogenous groups were prone to falling into a groupthink trap, where mistaken opinions are more likely to spread. Indeed, that’s one reason to think twice before recruiting for “culture fit.”
Previous studies on juries and student groups found that being on a racially diverse team changed how people approached legal issues and that people prepared more thoroughly when they knew they would be discussing things with a more diverse group. In both of Apfelbaum’s studies, this led to higher quality outcomes.