Diversity still matters for businesses to succeed

A new report by global consulting firm McKinsey shows that although inclusion and diversity are at risk in the crisis, they are also critical for business recovery, resilience, and reimagination.

In the challenging context of the global pandemic, the task of fostering inclusion and diversity (I&D) could easily take a back seat and the painstaking progress made by many firms in recent years could be reversed. As this report shows, however, I&D is a powerful enabler of business performance. Companies whose leaders welcome diverse talents and include multiple perspectives are likely to emerge from the crisis stronger. In short: diversity wins, now more than ever.

The benefits of I&D are clear now and that doesn’t change in a crisis

McKinsey research has repeatedly shown that gender and ethnic diversity, inclusion, and performance go hand in hand. Their latest report, Diversity wins: How inclusion matters, reinforces the business case. Over the past five years, the likelihood that diverse companies will out-earn their industry peers has grown. So have the penalties for companies lacking diversity.

Similarly, previous research found that women tend to demonstrate, more often than men, five of the nine types of leadership behaviour that improve organisational performance, including talent development. Women also more frequently apply three of the four types of behaviour—intellectual stimulation, inspiration, and participative decision making—that most effectively address the global challenges of the future.

Dangers of deprioritizing I&D

If companies deprioritize I&D during the crisis, the impact is felt not just on the bottom line but in people’s lives. Research and experience warn us that diverse talent can be at risk during a downturn for several reasons, including that downsizing can have a disproportionate impact on the roles typically held by diverse talent.

As companies send staff home to work, this could reinforce existing exclusive behaviours and unconscious biases and undermine inclusion. In addition, unequal sharing of childcare and homeschooling responsibilities, and unequal availability of home workspace and access to broadband could be putting women and minorities at a disadvantage during this time of working remotely.

Diversity winners that deploy a systematic approach to inclusion

Diversity winners that deploy a systematic approach to inclusion and diversity and don’t fear bold action to foster inclusion and belonging are most likely to reap the rewards.

Companies and their leaders can seize this moment—both to protect the gains they have already made, as well as to leverage I&D to position themselves to prosper in the future.

Click to download a copy of the McKinsey Diversity wins: How inclusion matters report.

** Information taken from the report.