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How Diversity And Inclusion Drive Business Value

As a southern boy from a small town, John Pritchard, senior director of product and engineering for Adobe I/O, thought the world was relatively homogenous until he enlisted in the Army. (Adobe owns CMO.com)

“There are only two colors you’re going to need to be concerned about from this day forward,” Pritchard recalls the drill sergeant shouting to his charges during basic training. “One is green—that’s the color you’re going to wear. And the other is red—that’s the color we all bleed.”

The message was clear: This diverse group of young people was coming together to accomplish things they couldn’t do alone. Their lives could depend on it.

Decades later, Pritchard is an advocate for diversity on his teams—not just for its own sake but because bringing a variety of people together to solve a problem leads to better solutions.

“When you have people with different backgrounds and different perspectives working together, you’re hard-wiring in competitive advantage,” he told CMO.com.

Backed By Research
In recent years, the value of workplace diversity—seeking out, understanding, and valuing differences between people (race, ethnicity, gender, age, ability, religion, sexual orientation, education, experiences) has been more than demonstrated. When combined with efforts to create a collaborative, supportive, and respectful environment that encourages the participation and contribution of all employees, workplace diversity leads to real business ROI on a number of fronts.

For example, companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their national industry medians, and those in the top quartile for gender diversity are 15% more likely to see greater financial returns, according to the McKinsey report “Diversity Matters.”

There is also a statistically significant relationship between diversity and innovation. A recent Harvard Business Review study found that companies with above-average total diversity had both 19% higher innovation revenues and 9% higher EBIT margins. Likewise, a Deloitte report noted that organizations with inclusive cultures were six times more likely to be innovative and agile, eight times more likely to achieve better business outcomes, and twice as likely to meet or exceed financial targets.

Creating a cultural shift to foster diversity and inclusion is challenging, but it’s more important than ever for CMOs and other digital leaders.

“When you’re creating digital experiences, it really magnifies the need for diversity,” Pritchard said. “We’re focused on enabling experiences for this huge populace, and the makeup of that population has to be reflected in the teams that are making the tools that drive those experiences.”

At the same time, an increasingly digital business environment can also enable diversity and inclusion. “Today’s world helps us embrace diversity and allows people to put forward their thoughts, opinions, and ideas and listen, observe, and learn from others,” said Julie Warburton, vice president of Adobe Customer Solutions EMEA.

A Digital Task Force
When Pritchard was promoted to senior leadership roles overseeing Army missions, the organizing principal was the task force.

“The thing you do as a commander of a task force is assign your leadership team, looking for those with the various backgrounds, specialties, and training that will be required to accomplish the mission,” Pritchard explained.

When he got his first civilian role on a product team, Pritchard said he was stunned to see everyone around the table looking like him. They also thought like him. “We're going through our first sets of designs, and basically everyone is agreeing with each other,” he said.

Once the team started getting some feedback from outside the group, it was clear that some choices they made were off-base. “If we had been more mindful about the team we formed early on,” he said, “we would have come to better decisions.”

Indeed, when designing new products, services, and experiences, one of the best ways to understand the customer need is to make sure the team building those experiences is reflective of the end user.

“You need them as part of that feedback loop,” said Nan Guo, senior director of engineering for ad systems at Adobe.

Recruiting: Beyond Skill Sets
It’s critical for digital leaders to apply the same approach to recruiting. When staffing, leaders tend to look for specific skills instead of different mindsets, Pritchard said. They should be aiming to fill not just gaps in capabilities but gaps in perspectives.

“It makes the search a lot harder, but it makes you much more mindful about the team that you’re trying to form,” Pritchard said.

Hiring methods aimed at increasing diversity take significantly more effort.

“We make sure when we enter into dialogues with potential new team members we look for their uniqueness. We don’t want the same people with the same skills and values that we already have,” Warburton said. “You have to try and understand each individual—their story, their experience, their skills, their values, their opinions—and really get under the skin of a potential employee and how they can enhance a team, rather than having already formed thoughts based on their resume.”

Introducing diversity is also about challenging our unconscious bias at every stage. During recruiting, this most commonly surfaces in the form of the similarity effect: being drawn toward and trusting people who are most like us.

“Things like going to the same school or having a similar background or interests create an instant familiarity,” said Jennifer Allyn, diversity strategy leader with PwC. “But those things are actually not that important in doing the work.”

Having diverse hiring panels, more formal hiring processes, and explicit decision-making criteria for each position are also important. “Informality favors the majority,” Allyn said. “You’ll never get the kind of diversity you’re seeking.”

Inclusion Is The Secret Sauce
Achieving diversity goals in hiring is a start, but inclusion is the killer app. “You can say I need to have this team be 35% women and achieve it, but inclusion is the most challenging part,” Guo said. “How do you provide equal opportunity for everyone to be successful in the environment?”

Kakul Srivastava, vice president of Creative Cloud Experience and Engagement with Adobe, said she wants to create a culture where people can bring as much of their genuine self to work as possible.

“Talent has never been more important—and more difficult to get,” she told CMO.com. “We have to do everything in our power to make sure that we attract, hire, and retain great talent from anywhere, so I think it's really a critical business priority to build this inclusive culture.”

That means creating a workplace where everyone is heard. “Having diversity brings a wealth of opinions, thoughts, and values, and everyone needs to be encouraged to speak up and create energic conversations and healthy debates to move forward,” Warburton said.

But that doesn’t happen on its own. “If people aren’t participating in events, meetings, social events—think about why,” Warburton said. “If people aren’t speaking up, we need to help everyone have a voice. There will always be some who will need help in being heard.”

When individuals feel a sense of belonging, their performance improves. “Engagement levels go up, productivity levels go up, and they’re more likely to stay with the company,” Guo said.

While CEOs may set the tone for diversity and inclusion, digital leaders—CMOs, CIOs, CDOs, and their direct reports and managers—play a more important role in creating that inclusive culture in their functional groups.

“We know for sure that people leading teams make a huge difference,” Allyn said. “People aspire to things based on their experiences with their direct team—that everyday environment. Do you listen to me? Are we able to dissent respectfully? Do we avoid making assumptions about who each other is?”

A Work In Progress
One of the biggest challenges with diversity and inclusion is keeping both at the top of the agenda, when hundreds of priorities are competing for leaders’ attention.

“So much is happening and changing so fast on so many levels that it just drops down the list,” Allyn said. “The case for diversity is well-established, and senior leaders can be great ambassadors for this, but you have to make sure these conversations are repeated until it becomes part of the fabric of the organization.”

It takes energy and focus to keep diversity and inclusion front and center, Srivastana admitted. “It would be easy to think you’ve met your targets for recruiting, for example, and that’s all you need to do,” she said. “But we need to see this as a continuous journey and ongoing challenge.”

Even those committed to diversity and inclusion have to remain vigilant in noticing and setting aside their own biases, Srivastana said. Progress has been made, added Pritchard, but there’s still a long road ahead.

“The fact that diversity and inclusion are not simply the ‘right thing to do’ from a moral or ethical standpoint but for business performance, is a drum digital leaders must beat,” Pritchard said. “That’s the work we have before us: to communicate the value side of this equation.”

And that equation? Diversity plus inclusion equals better business outcomes.

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