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Business Case for Diversity in Organizations

| by Ben Linders Follow 29 Followers on Sep 12, 2015. Estimated reading time: 5 minutes |

There is a positive correlation between diversity and financial performance and in an inclusive workplace, employees are more engaged which is crucial for retention and performance says Regina Chien. Having a diversity of thought and life experiences is going to help engineers create the best products.

Regina Chien will talk about the business case for diversity and inclusion at the Agile and Software Architecture Symposium 2015, a 1 day conference in the Netherlands where software architects, developers, requirements engineers and information analysts meet to share knowledge about software architecture.

InfoQ interviewed Chien about the current state of practice in diversity, research on diversity and inclusion, why diversity is so difficult to implement, why software engineers should care about diversity and what organizations and teams can do to increase diversity and get benefits out of that.

InfoQ: Can you briefly describe the current state of practice in diversity and give some insight in how organizations are doing worldwide?

Chien: Diversity initiatives at Fortune 500 companies have been around for over 20 years but unfortunately not much has changed in terms of number of women or minorities represented in leadership (c-suite and board of directors).

I predict that in the next 5 years when we talk about diversity, we will see companies take a more data driven approach. Why? Not only has technology changed so that there are SaaS programs like Atipica, Unitive, and GapJumpers that help companies to measure progress during recruiting, but also because a workplace that is inclusive is directly correlated to more engaged employees which is crucial for retention and performance.

Other momentum building efforts towards more diversity and inclusion are:

  1. Technology companies have received public pressure to release their internal demographics in the US which has led to more calls to action in the community.
  2. The business case for diversity can be better measured with reports like McKinsey’s Diversity Matters study showing the correlation between more diverse companies financially outperforming less diverse companies.
  3. The data has been able to point out specific areas around hiring and retention of women and minorities that make the need for a more inclusive culture a competitive advantage as well as made it easier to point out unconscious biases that we all have (e.g. believing recent mothers will turn down business travel without asking them first).

Inclusion is also a very important word because in some organizations diversity is a word that rings hollow and in fact, diversity is a measurement while inclusion is an action. Inclusion is a more effective way for senior leaders to connect diversity with business strategy.

InfoQ: Can you elaborate on the research that has shown that productivity is higher in organizations that have diverse and inclusive workforces?

Chien: McKinsey’s 2015 Diversity Matters study is really nuanced and after they surveyed and researched over 300 public companies around the world, they found a positive correlation between diversity and financial performance. One notable finding was that it was really hard for companies to do well on both improving diversity of gender and ethnicity. Companies usually did better on one or the other.

InfoQ: In your talk you will explain why diversity is so difficult to implement. Can you explain this briefly for the InfoQ readers?

Chien: In Deloitte’s 2014 Global Human Capital Learning Trends report, they surveyed over 2500 companies from 94 countries and found that only 20% feel ready to tackle diversity and inclusion in their organizations. Diversity has compliance driven origins and unfortunately has been perceived as an obligation in many organizations instead of a competitive advantage.

Diversity is a measurement and inclusion is the method. Senior leaders have to embed measurable ways to document progress in diversity during hiring and retention. Leaders need to provide enough resources and training to the managers in the organization and they truly have to commit to diversity as a key initiative for their business. Google has led the way in many HR initiatives and their trainings for unconscious bias focused on how engineers think is one example.

InfoQ: Why should software engineers care about diversity, what makes it important for them?

Chien: The product is going to reflect its makers. Having a diversity of thought and life experiences is going to help engineers create the best product and avoid horrible situations such as when the Google Photos app mistakenly tagged African American people as gorillas in their algorithm. The algorithm for Google Photos may have looked different if it had been trained on a more diverse group of images. The bias of an engineering team will be reflected in the product. Engineers will often design products for a demographic that look and think differently from them and the diversity of life experiences and backgrounds will really help them to close empathy gaps and ultimately create a better product.

Engineers will also want to work with great talent, and recruiting widely in order to work with fantastic team members will also enhance the workplace for everyone and help avoid "groupthink" situations. I also think that while diversity is primarily viewed through a gender and ethnic minority lens, what companies are aiming for is a diversity of life experiences to contribute to solving a problem and building a product.

InfoQ: Can you give some examples showing how organizations have increased there diversity? What did they do?

Chien: Anecdotally, Google has led the way with the resources and training around diversity and inclusion. Their unconscious bias training has influenced other companies to follow their lead. The reason it is hard to name additional success stories is that companies have only recently started to measure their diversity efforts. We’ll have to wait a few years before they will be able to benchmark the progress and make it public.

InfoQ: Can you give some suggestions on what organizations and teams can do to increase diversity and get benefits out of that?

Chien: Senior leaders in an organization will set the tone for the rest of the organization through their actions and stories that they tell about why diversity is important to business objectives. It isn’t easy but framing the business objectives and showing that diversity and inclusion fit into the strategy for success is crucial. Diversity and inclusion cannot be a standalone initiative.

If we think about how to create an inclusive environment, everyone in the company has a role to play. Employees can make a big difference by listening to their colleagues and members of the majority are often best positioned to speak up for those who are minorities in the workplace because they can do it without being viewed as self-serving.

The benefits of a more diverse and inclusive workplace are not just financial and related to new talent initiatives. Companies have surveyed their employees and found more engaged and happier employees when there is a diverse and inclusive workplace. Companies will also have millennials occupy over 50% of their workforce by 2020 and millennials see diversity as not just racial or gender based but also cognitive – so an organization that values the diversity and inclusion of life experience and ideas is going to be important for recruiting and retaining younger talent in workplaces too.

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