Fostering inclusion and diversity

Mckinsey & Company’s latest research findings say companies with more than 30% women on their executive teams are significantly more likely to outperform those with 10%-30% women.

The findings also show that companies in the top quartile for gender diversity and ethnic/cultural diversity in their executive teams are 25% and 36% more likely to experience above-average profitability, respectively.

Since inclusion and diversity (I&D) is a powerful enabler of business performance, companies whose leaders welcome diverse talent and include multiple perspectives are likely to emerge from the current Covid-19 pandemic stronger.

For those that de-prioritise I&D during the crisis, the impact will be felt not just in the bottom line, but also in people’s lives and will exacerbate inequalities.

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, the report says.

It says as companies send staff home to work, this could reinforce existing exclusive behaviours and unconscious biases and undermine inclusion.

“Inclusion is incredibly hard to get right, but companies that succeed are able to create a workforce where people can bring their whole selves to work to drive more innovation, faster decisions and more longevity with top talent. In the current context, focusing on inclusion isn’t just good business sense, it is a critical tool of the resilience and reinvention required to survive,’’ co-author and Mckinsey partner Sara Prince says.

The research topic “Diversity wins: How inclusion matters’’ covered over 1,039 companies across 15 countries. The findings were measured by both profitability using the earnings before interest and taxes margin and long-term value creation. This is the third such research since 2015.