Noon Dalton Supports DEI & You Should Too
Regardless of their opinions about the societal benefits of diversity, equity, and inclusion (DEI), many business leaders find it difficult to comprehend whether and how DEI may genuinely benefit their company.
The most popular strategy for arguing for the importance of DEI is to list the numerous studies that demonstrate relationships between different types of corporate diversity and typical Key Performance Indicators. However, the “business case” defense has not consistently held up, and in some instances, it has even been found to backfire.
Some DEI specialists advise depending more on the “fairness case” and less on the business case. Every business leader’s primary duty is to take the necessary steps to ensure the success of their organization. As a result, any endeavor that is not blatantly related to the success of their business is deemed a “nice-to-have,” meaning that it will only receive a limited amount of funding and will be among the first to be eliminated in the event of financial difficulty.
Fortunately, there is a solution that is both considerably easier and more effective for persuading CEOs of the crucial significance of DEI. In fact, it is not difficult to make the case that utilizing DEI has the potential to become any business leader’s most important and effective tactic.
The argument is based on a single factual observation: diversifying your assets always produces better results.
And when you consider that your employees are, in fact, your most valuable asset, you’ll soon see the benefits of DEI as well.
Fact: Asset Diversification Yields Better Results
Diversification is advantageous for every organizational activity that depends on the usage of assets. Programmatic advertising, for instance, optimizes the mix of marketing resources to boost sales. Financial portfolio management, on the other hand, diversifies financial assets to boost returns. Inventory management optimizes a company’s stock mix to reduce costs. Product portfolio management, optimizes product offerings to spur market expansion.
A diversified portfolio consistently outperforms homogeneous portfolios for any business asset class. Would you put all of your savings into one stock? Would you use one channel for all of your advertisements? Would you promote a single item? From this vantage point, it seems illogical to believe that the optimum potential structure of human resources is a workforce that is essentially homogeneous.
By the same logic, you could increase the performance of your organization by diversifying human assets.
Your Employees Are Truly Invaluable: They’re More Than Just an Asset
The most important asset and the biggest budget line item for every organization are its human resources. Yet, somehow, expenditure on payroll is typically 30 times greater than spending on advertising. US businesses spent a total of $254 billion on advertising in 2019 compared to a total of $7,429 billion on wages. Over time, this ratio has stayed the same.
Since human resources dominate all other categories of corporate assets, business leaders must understand that this sector offers the best chance to boost success.
Bottom Line: Business Leaders Need to Support and Embrace DEI
By using DEI to diversify their most precious asset—their people—business leaders have a rare opportunity to create massive value.
You are failing in your responsibility as a business leader if your attention is not on figuring out how to diversify in such a way as to maximize the value of your human assets.
This argument is not intended to instruct leaders in the selection or execution of DEI initiatives. Neither is it intended to imply that doing this is simple. However, it must be made abundantly apparent that failing to make a sincere, concentrated effort to build a more diverse, egalitarian, and inclusive company is a failure of leadership.
Each executive team should demand that all leaders and managers participate in the design and implementation of initiatives that support greater levels of diversity, equity, and inclusion. Additionally, each leader and manager should make it clear to all staff members that acting in a way that supports DEI is both the right thing to do and a part of everyone’s job responsibility.
In addition to the potential effects of DEI on a company’s top and bottom lines, ignoring DEI poses a serious competitive risk. Looking back at recent history can help us understand the scope of this risk: a few decades ago, a number of small, agile, digital-first businesses started using the Internet for advertising, figured out how to measure the effect of advertising on consumers, and then created tools to increase revenues by optimizing the advertising mix. They succeeded in dominating every sphere of our business because of their hard work.
Imagine what will happen when today’s agile, DEI-first businesses discover out how to measure the impact of DEI and build tools to optimize the mix of human assets. given that payroll costs are thirty times more than advertising expenditures and that people are considerably more valuable than ads.
Diversity, Equity & Inclusion: You Need All Three
To guarantee that it is having the greatest impact possible, a company must have inclusion policies in addition to diversity and equity policies. The main goal is to make sure everyone feels like they belong once everything is running smoothly. This results in your employees feeling like they belong.
DEI should be promoted not only now, but also in the future as business needs and employee needs evolve. It should also be maintained, updated, and controlled. When training is done correctly, it will significantly impact employee success, job productivity, and workplace happiness, all of which contribute to a more successful and robust organization.