Inclusion is the Buzzword that Matters


By Yvonne Milosevic

At many organizations, there’s a disconnect between good intentions and on-the-ground reality. We can all agree that having diverse perspectives is a good thing. But it’s not enough to create a team that looks like a Benetton ad. Find out who holds the power seats at the table. Still seeing rainbows? Maybe not. As Black History Month approaches, we’re reminded of why it’s crucial to focus on both diversity and inclusion.

“Inclusion is about welcoming, developing, and advancing a diverse mix of individuals,” says Ellen Taaffe, an assistant professor of leadership at the Kellogg School of Management. Organizations first need to change their practices that unfairly benefit any one group. And everyone should feel they have the same opportunity to make an impact, she says. “Creating that environment is where the real challenge lies.”

Check your self-awareness

Like it or not, we all have implicit biases. These unconscious thoughts and behaviors influence how we think and act. A while back, Lauren Rivera, associate professor of management and organizations at Kellogg, studied hiring practices at a variety of elite firms. She wanted to see how those decisions contribute to labor markets and social inequalities.

Rivera discovered that interviewers usually favored applicants who reminded them of themselves. It wasn’t about “maximizing skill—finding the person who was absolutely best at the soft or the hard dimensions of the job,” Rivera says.

When assessing a potential new hire, she found that many managers apply the Stranded in the Airport Test.

“Would I want to be stuck in an airport in a snowstorm with them? And if I’m on a business trip for two days and I have to have dinner with them, is this the kind of person I enjoy hanging with?”

Eventually, such criteria lead to homogeneous teams and organizations. We may think these traits make someone a good fit for a role or promotion, Taaffe says. “But it really just means ‘they’re more like me.’”

The economic value of inclusion

This next one’s good for anyone who needs extra incentive to embrace inclusion. In short, having a diverse and inclusive workplace has a positive impact on a company’s bottom line. The 2018 McKinsey & Co. study Delivering Through Diversity found that the most gender-diverse executive teams outperformed on profitability by 21 percent. Moreover, they were 27 percent more likely to have “superior value creation.”

Also, the more ethnically and culturally diverse executive teams were 33 percent more likely to have industry-leading profitability.

On the other hand, the McKinsey report found that those who can’t get on board with inclusion see a decline in profits. Companies at the bottom for gender, ethnic, and cultural diversity were 29 percent less likely to achieve above-average profitability. Not only were they not leading, but they were also lagging, McKinsey reported.

Finally, as disruption continues across most industries, the takeaway for businesses is clear. Companies that build and maintain an inclusive culture will reap financial benefits. And if we want to stay competitive, says Taaffe, we have to make including new ideas from more diverse perspectives the norm.