Inclusivity—A Bottom-Line Imperative
In diversity, there is beauty and there is strength. ~ Maya Angelou
The value of the Inclusivity touchstone cannot be overstated. Of late, anything related to Diversity, Equity, and Inclusion (DEI) has been overtly or latently attacked. A common problem is that DEI efforts are fragmented or flawed, leading to confusion about the intent and function. DEI work gets minimized to a “this is what we’re supposed to do” initiative instead of a “this is the wisest investment I can make to give my organization a competitive edge.” If you’re not already at the latter, my goal is to shift your thinking and help you understand Inclusivity's bottom-line, positive impact. So, let’s start by defining how it propels growth in dynamic, enduring organization. The Leader-First® Leadership model definition of Inclusivity is fostering an environment that values authentic contributions and empowers the full participation and acceptance of all people.
We typically discuss Inclusivity in the context of social justice and moral obligations. When organizations politicize and fight Inclusivity because it gets touted as an ESG (environmental, social, governance) issue and nothing more, they leave money on the table. We rarely discuss the positive, bottom-line impact of Inclusivity. Inclusivity is a necessary, strategic imperative if leaders want to play the long game.
The Peterson Institute for International Economics found that companies with at least 30% female leaders earn 6% more profits than those without female leadership.1 A recent study showed that companies with above-average diversity on their leadership teams reported 19% higher innovation revenue than companies with below-average leadership diversity.2 In a study of 366 organizations in the top quartile for racial and ethnic diversity, McKinsey found that they were 35% more likely to have financial returns above the national average.3 A Gallup study of two companies found that the most gender-diverse of 800 business units had average revenues 14% higher.4
Inclusive leaders recognize and appreciate the unique value, perspectives, backgrounds, and experiences each team member contributes to the organization. By actively seeking out individuals from different cultures, races, genders, ages, abilities, and backgrounds, they remove barriers to participation and involvement. A diverse workforce fosters innovation, creativity, and a broader range of ideas that can lead to better outcomes. Inclusive leaders encourage team members to bring their authentic selves to work, strengthening psychological safety and engagement. When team members feel respected, they will more likely contribute unique perspectives. Inclusivity reinforces all four culture dimensions to unleash innovation, problem-solving, better decision-making processes, and increased productivity. These culture dimensions reduce costly employee turnover and absenteeism. Inclusive leaders save their organizations substantial recruitment and training costs while enhancing operational efficiency.
When leaders embrace Inclusivity, their teams can tap into previously underserved markets and demographics. Diverse and inclusive workforces understand an increasingly diverse customer base. Expanded markets increase revenue, build competitive advantage, and improve customer loyalty. Team members from diverse backgrounds who collaborate unlock a rich tapestry of perspectives, ideas, and experiences. Diversity of thought challenges conventional thinking, stimulates creativity, and encourages the exploration of new approaches and solutions.
Inclusivity is not just a profitable thing to do. It represents a core principle of social responsibility. Inclusive Leaders who commit to fairness, equity, and equal opportunities contribute to building a more equitable society and addressing systemic inequalities. These actions enhance an organization’s reputation and generate positive public perception. By championing Inclusivity, organizations gain a competitive edge because they can attract top talent, loyal customers, and long-term partnerships—all of which grow the bottom line.
References
Han, S., & Noland, M. (2020, August 27). Companies with women in leadership positions are more profitable than those without. PIIE.
Baeza, C. (2022, March 9). Half of the candidates for management posts at BBVA Are Women. NEWS BBVA.
Anoshiravani, A., & Drake, E. (2016, March 14). Grads of Life Brandvoice: 4 reasons why diversity will boost your company’s performance. Forbes.
Badal, S. B. (2023, July 27). The business benefits of gender diversity. Gallup.com.
