The pandemic is the perfect time to double down on diversity and inclusion

Greater diversity and inclusivity spur the innovation needed to overcome economic crises.

By: Michelle Scarborough, Managing Partner, BDC Capital’s Strategic Investments and Women in Technology Venture Fund.

“Diversity is our strength.”

It’s a powerful statement echoed by leaders around the world — and when it comes to business, the numbers back it up, as I’ve previously written. Yet too many business leaders are turning away from the benefits of diversity and inclusion at precisely the time when they need them most during the global pandemic.

More than a quarter of businesses surveyed by research firm I4CP said they had halted all or most of their D&I initiatives. Over half said they were not providing any additional support to women and minorities working from home. And 12% said they were giving less consideration to diversity and inclusion when changing their workforce.

Of course, there are many competing priorities during a crisis. In many cases, budgets have been slashed to conserve capital and extend a company’s runway. But diversity and inclusion shouldn’t be on the chopping block.

In fact, now is the time to double down on D&I.

The global pandemic is forcing companies to undergo rapid digital transformation of their workplaces, pivot their products and services to better suit new customer needs, and in many cases, completely reinvent their business model. Clearly, bold leadership and creative problem solving will be needed to prosper through the biggest economic challenge of the century.

That’s precisely what diversity and inclusion deliver to businesses.

Consider that a 1% increase in cultural diversity among employees translates to a 2.4% bump in revenue and half-a-percentage-point gain in productivity on average, according to Policy Options. That’s a powerful dynamic for companies at a time when about 70% of Canadian employees are disengaged at work, as per a Conference Board survey.

Diversity’s impact on innovation is also profound. Businesses with a higher share of female employees are more likely to bring radical new innovations to market, according to a study published in the Harvard Business Review. Furthermore, companies with above-average diversity in their management teams boast revenue from newer products that’s 19% higher than those with below-average scores, BCG found. These bold new ideas will be vital to businesses searching for the right product-market fit in a revamped global economy.

And with remote working reshaping workplace culture and connectedness, a new breed of empathetic leadership will be needed to get the most out of teams. Well, women tend to demonstrate five of the nine types of executive behaviour that improve organizational performance, as per a research roundup by McKinsey.

This time of great upheaval is the perfect opportunity for organizations to rededicate themselves to broadening diversity and inclusion within their ranks.

They can lean on remote working to hire candidates who might otherwise be unable to commute to the workplace or who require flexible scheduling.

They can leverage collaboration technologies to loop in team members from different backgrounds to meetings so that a wider range of perspectives are heard.

They can foster team-building by publicly celebrating the achievements of women and minorities in the workplace.

And, at the leadership level, they can create a diversity council dedicated to attracting talent from underrepresented communities. A great starting point for guidance is the Canadian Venture Capital Association’s Diversity and Inclusion Report, which our team at BDC helped produce.

All of the above are simple steps leaders can take to help diversity and inclusion flourish — and they don’t cost a dime. In fact, RBC estimates that equal participation between men and women in the labour market would lift Canada’s economic output by about $100 billion per year. The only cost is that of inaction!

It’s clear that businesses that curtail efforts to build more diverse and inclusive workforces will suffer in the long term. It’s a mistake many companies made coming out of the last financial crisis, but one they cannot afford to make again.

It’s time they recognize how much stronger diversity makes us in words as well as in actions.