Diversity and inclusion produce results
Credit union leaders have long viewed diversity and inclusion as the right thing to do. More and more data show how correct they were and are. Diversity in work teams, when combined with an inclusive culture, delivers measurable business results. Smart leaders know that their credit union’s management and boards must reflect the communities and the membership that they serve. Yet, it is wise to consider diversity in even larger terms, as organizations that rank above average for diversity show better financial returns and are more innovative than less diverse peers.
Diversity is multi-dimensional. We often think of diversity in terms of the intrinsic traits that you were born with like gender, ethnicity, race, age and sexual orientation. Importantly, diversity also includes characteristics that one acquires through experience like the discipline studied in college, industry background, career path, veteran experience, and foreign work experience, where one learns to greater appreciate cultural differences. A combination of inherent and acquired diversity can really energize your work teams and make results happen.
Numerous studies confirm the positive business impact of diverse teams. The Wall Street Journal recently published a study based on the paper’s first diversity rankings of corporate sectors and companies in the S&P 500 Index. It showed how the 20 most diverse companies had better operating results, higher compound annualized return on investment and better performing stocks than the lowest scoring firms. The Harvard Business Review reported that EBIT margins were about 9% higher in companies with more diverse management teams than for those with below-average diversity. Additionally, the consulting firm BCG established that diverse management teams were more innovative than ones that are less diverse, as evidenced by the portion of revenue from products and services launched in the last 3 years. Credit unions appreciate how critical digital transformation is for their business, and those companies with the highest levels of digital investment exhibited the strongest link between diversity and innovation revenue.
It takes more than diverse teams to harness this power. It always comes back to your organizational culture. A culture that is inclusive and welcoming serves to attract and retain talent, and recruiting and retaining a diverse workforce is virtually impossible without a culture that supports and empowers the employees. A healthy culture that embraces diversity and inclusion starts with attention from the top. The CEO and senior leaders must own it, promote it and treat it as a business imperative.
Best practices for a healthy culture are also best practices for a welcoming and inclusive workplace that values diversity. All employees feel valued. All voices are heard, and people feel safe to propose new ideas. Ideas are considered regardless of age, background or experience level. Innovative twists on old and new problems are considered. Agility, risk taking, bold thinking and action orientation are rewarded. Fair employment practices include a strong non-discrimination policy and equal pay for equal work. Decision-making authority is shared, and people are empowered to act. Feedback is clear and actionable, having a real focus on what is working well and going right. Leaders and the teams share credit for successes. Give your credit union every opportunity to perform to its peak potential and strengthen your organization by making diversity and inclusion a strategic priority.
