Katica's Voice™

“Gender equity is not only a social issue, it is a massive economic opportunity.”

Welcome to my weekly Q&A roundup. (Scroll down to find the Q&A.)

If this is your first time here, welcome. I spend a fair amount of time speaking at events and conferences. At the end of my presentations, I leave space for audience members to ask questions—tough questions, brave questions, you name it.

The level of candor and curiosity always inspires me, and I want to share that sentiment with you. So each week, I pick one question that I believe others would find most instructive and publish my response to it here.

The purpose of this weekly tradition is transparency and inclusivity.

• Transparency: a behind-the-scenes look at my day-to-day.

• Inclusivity: bringing others along in the journey.

Be Brave™


Question

Why should organizations care about, let alone prioritize, diversity and inclusion KPIs at a time when their income statements are in a state of crisis?

Answer

There’s an assumption underlying your question: that diversity and inclusion (D&I) is at odds with financial performance.

It’s easy to draw this conclusion of the two clashing with each other because, for a long time, we’ve seen D&I (or DEI) initiatives as a cost center. From this view, there’s no ROI on D&I.

So what happens in times of financial hardship? Companies take a critical look at their budgets and slash what they deem unnecessary. People, programs, and paychecks—all are eligible to receive the infamous red strike-through.

When we look at the data, however, we find that D&I enhances companies’ financial performance, not hinders it.

Here’s a glimpse of “just” a few ways D&I benefits companies:

  • Higher return on sales, equity, and invested capital
  • Performance that outperforms industry averages
  • Better stock growth
  • Improved corporate sustainability
  • Lower risk of insolvency
  • Higher market to book value
  • Higher scores of organizational excellence
  • Decreased turnover intentions
  • Higher collective intelligence
  • Higher social sensitivity
  • Better board member attendance and involvement
  • Lower corporate fraud
  • Higher-quality CSR initiatives
  • Increased firm value
  • Better corporate governance and oversight
  • Better corporate social performance
  • Improved corporate reputation
  • Better problem-solving abilities
  • Better performance on highly complex tasks
  • Reduced conflict
  • Increased innovation

 

And that’s not all. Research shows that D&I can actually help organizations weather economic downturns and bounce back faster and stronger.

In fact, the experience of key employee groups (including women, people of color, and front-line workers) determined the velocity of a company’s performance during the Great Recession—whether it nosedived, flatlined, merely survived, or thrived.

“In our study of nearly 2,000 companies, we found that key metrics related to equity and inclusion not only drive stronger company innovation, but also predict whether companies will thrive or stumble during a recession.”

-Michael C. Bush, CEO of Great Place to Work

Conclusion

Companies that put diversity, equity, and inclusion at the center of their crisis management efforts will come out of COVID-19 ahead.


These Q&A roundups can be delivered directly to you—a week before I publish them here. Interested?

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(All you need is an email address.)

© 2020 Pipeline Equity™, Inc.

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