Want to Thrive in Times of Crisis? Focus on Diversity and Inclusion By Paulette Gerkovich
As the Neuroleadership Institute’s research on organizational behaviour demonstrates, during disruption and crisis, we enter a state of threat. Humans have survived for millennia because our brains are wired to detect threat. In fact, we are so finely tuned for survival, our brains are far more likely to detect threat than reward or pleasure. And when we are in a threat state, we tend to make decisions strongly geared towards survival.
That means, at least some of the time, the parts of our brains responsible for logical and deliberate thinking take a back seat to the parts responsible for keeping us alive. In these moments we tend to make unconsciously biased decisions more often. We rely on specific biases related to safety, experience, and expedience. We err on the side of caution and go back to what has worked in the past.
In this stressed state, it may seem sensible to relieve the organization of efforts typically viewed as ‘nice to have,’ or perhaps a drain on resources. Privileging the short term may seem far less risky than relying on long-term gains.
For instance, diversity and inclusion (D&I) efforts are often scaled back because they live on the ‘support’ side of the house. Those functions that don’t directly bring in revenue are usually the first to experience cutbacks. And yet, the more quickly we move (and we must move quickly), the less likely we are to make deliberate, evidence-based decisions.
Further, the rules and processes that determine who gets laid off often result in more pink slips for women and people of colour. When organizations use formal rules, including ‘last in, first out’ policies, diverse employees are impacted to a much
greater degree. Organizations that have made recent gains in diversity see that progress wiped out. Additionally, staff (vs. line) roles, which are held by higher proportions of diverse employees, are often among the first to be eliminated.
When it comes to D&I, research remarkably upends conventional wisdom. The reality is that companies who do not let up on their D&I efforts bounce back from recessions best. A 2019 study looked at publicly-traded companies before, during and after the 2009 Great Recession. It found that the financials of companies that maintained a diverse and inclusive environment flourished while those that didn’t saw precipitous declines.
The S&P 500 saw a 35.5 per cent decline in stock performance between 2007 and 2009. On the other hand, companies that remained highly inclusive experienced a 14.4 per cent gain.
They outperformed their less inclusive peers by four times.
As we continue to adjust to the effects of the global pandemic, unfortunately, another crisis is undoubtedly upon us. Every day brings uncertainty as we watch swings in the stock market and organizations across the globe get in position to make tough decisions. Perhaps it’s time to replace instinct and conventional wisdom with the scientific insight that will allow us to steer through difficult economic times more strategically.