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10847231085?profile=RESIZE_710xDiversity and Inclusion are 2 interdependent concepts.  Nevertheless, they are not interchangeable. Managing Diversity and Inclusion (D&I) requires activities beyond policies, initiatives, and headcounts.

Diversity refers to the representation of races, ethnicities, and other minority groups in an organization, or its composition.

Inclusion is the degree to which inputs, presence, and perspectives of distinct groups of people are valued and the level to which they are integrated into an environment.

Diverse and Inclusive workplaces have several benefits, including improved revenue growth, more innovative capacity, expanded capacity for recruiting a diverse talent pool, and increased employee retention.

Maintaining an inclusive workplace culture not only benefits in attracting a broad talent pool, but also aids in retaining the diverse talent pool.

Diversity is important to today's overall business performance.  Likewise, Inclusion of varied viewpoints is essential.  According to the findings of a long-term research undertaken by the global consulting firm McKinsey, Inclusion appears to have a favorable influence on the bottom line.

Since 2014, the study has tracked the trajectories of dozens of major corporations.  It measures both ethnic and cultural Diversity, as well as Diversity based on gender.  The 3rd analysis, by far the largest data set, contained over 1000 significant corporations from 15 nations.  This data collection provided the basis for a report titled "Diversity Wins" (2019).

Recent evidence indicates to the following 6 important areas of attention that favorably or negatively affect performance:


  1. Gender Diversity on Executive Teams leads to stronger performance.
  2. Progress in Gender Diversity in Boards is slow.
  3. Women representation low on executive teams all across the studied countries.
  4. Executive teams with more women perform better.
  5. Female executive representation across big industries is slow.
  6. Business justification for Ethnic Diversity on executive teams is very strong.


According to the conclusions of the study, the link between Diversity on executive teams and the likelihood of unrivaled financial success is now clearer than ever before.

Let's go a bit more into a few of the findings.

1. Gender Diversity on Executive Teams leads to stronger Performance

Data has revealed that greater representation enhances the likelihood of improved performance. Companies with 30% or more women on their executive teams are significantly more likely to do well than those with 10% to 30% women.  In turn, companies with 10-30% women on executive teams may outperform those with fewer or no women executives.  As a result of Gender Diversity, there is a 48% performance disparity between the most and least Gender-Diverse organizations. 

2. Progress in Gender Diversity in Boards is slow

In enterprises headquartered in the United States and the United Kingdom, the proportion of women on boards has increased from 21% in 2014 to 28% in 2019.  Despite the fact that this is progress, it is sluggish.  In the 2014 data set, a positive association between Board Diversity and financial underperformance was discovered, although it was not as strong as it has been in the current data set. 

3. Women representation low on Executive Teams all across the studied countries

A 2019 data set comprising 15 nations on 5 continents demonstrates that progress in the Inclusion of women on executive teams is gradual in the majority of countries.

On one end of the spectrum of women's representation is Norway, with at least 1 woman on the executive teams of all enterprises evaluated, and on the other, nations such as Brazil and India, where 83% of businesses did not have a single woman.

Interested in learning more about the Business Case for Diversity & Inclusion (D&I)?  You can download an editable PowerPoint presentation on Business Case for Diversity & Inclusion (D&I) here on the Flevy documents marketplace.

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The purpose of Human Resources (HR) is to ensure our organization achieves success through our people. Without the right people in place—at all levels of the organization—we will never be able to execute our Strategy effectively.

This begs the question: Does your organization view HR as a support function or a strategic one? Research shows leading organizations leverage HR as a strategic function, one that both supports and drives the organization's Strategy. In fact, having strong HRM capabilities is a source of Competitive Advantage.

This has never been more true than right now in the Digital Age, as organizations must compete for specialized talent to drive forward their Digital Transformation Strategies. Beyond just hiring and selection, HR also plays the critical role in retaining talent—by keeping people engaged, motivated, and happy.

Learn about our Human Resource Management (HRM) Best Practice Frameworks here.

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