Over $6 trillion.
Most organizations are in the process of turning the page on 2021 from a fiscal perspective and aiming their attention at 2022 goals. Yet as C-suite executives issue top-down performance expectations for the coming year, most are failing to account for the significant dollars just waiting to be claimed. This is because they may be ignorant to the exact size of the prize that comes when embracing justice, equity, diversity, and inclusion as a key how to deliver more for more stakeholders: employees, customers, communities, the environment, and shareholders.
Over $6 trillion.
Most DEI work being performed across large companies today is unfortunately not delivering the expected outcomes. This is largely due to a fundamental misunderstanding of this work and why it really matters. Some CEO's may view it as a necessary external expenditure to signal allyship with relevant causes or even as an extension of their existing corporate social responsibility (CSR) initiatives. But DEI work is far closer to Quality, Ethics, Compliance, and Environmental and Social Governance efforts and should be funded and prioritized accordingly. But effective risk management is only one of the ways J.E.D.I. work can enhance a company's financial outlook.
Over $6 trillion.
There are two frameworks, one from the world of ethics and compliance, and another from the world of total quality management, that are fundamental to the work being done in the J.E.D.I. space. The first is the internal control framework which is a system built on identifying potential risks, crafting standard operating procedures, communicating and training the organization around these, and then monitoring the adherence towards them via internal and external audit processes. When you treat injustices, inequities, uniformity, and exclusionary beliefs, biases, behaviors, processes, and priorities as business risks - you are in effect performing similar work to what compliance officers do every day. The second framework comes from the world of total quality management and deals with corrective and preventative actions or CAPAs. CAPA management is fundamentally about learning from failure, elevating standards, and enhancing outcomes. Inevitably issues will arise within any organization - being disciplined and robust with CAPAs is the continuous improvement mechanism company's need to enable J.E.D.I. work.
Over $6 trillion.
The moral argument for eradicating injustices, eliminating inequities, expanding diversity, and enhancing inclusion is clear and cannot be overstated. Unfortunately, the moral argument alone cannot sustain the work required to truly transform the status quo and right long-standing wrongs. Thankfully, there are some very compelling business arguments as well.
Injustice: Citigroup estimates the US economy would see a $5 trillion boost over the next five years if the U.S. were to tackle key areas of discrimination against African Americans.
Inequity: Closing the gender pay gap could add $512 billion to the GDP, not to mention how the inequity impacts everything from healthcare and higher education to international trade and the middle class.
Uniformity: Companies with above-average total diversity, measured as the average of six dimensions of diversity (migration, industry, career path, gender, education, age), had both 19% points higher innovation revenues and 9% points higher EBIT margins, on average.
Exclusion: Workplace belonging leads to a 56% increase in job performance. Employee disengagement costs companies dearly every year—up to $550 billion a year.
Over $6 trillion.
This is just a fraction of the money left on the table for failing to tap into the power of J.E.D.I. work. Individual businesses may choose to opt out of this opportunity - but the leading companies cannot. To achieve the lofty goals of stakeholder capitalism; to add more value to more stakeholders; to mitigate the significant business risks inherent in allowing injustice, inequity, uniformity, and exclusion to corrode the potential and purpose of the enterprise; to turn away from the enormity of opportunity present in embracing modern leadership principles; is fundamentally unacceptable and irresponsible. Corporate irresponsibility should never be rewarded. It's time for businesses to become more and there is no time like the present to set the right DEI goals for 2022 and get back on track!