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Why Focusing on Diversity Numbers Won’t Really Make Companies More Inclusive

June 21, 2019, 6:06 PM UTC
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10'000 Hours via Getty Images
10'000 Hours via Getty Images

Diversity is simply good for business: Companies with greater gender diversity in their leadership outperform their less diverse competitors, have higher returns on capital, and are credited with better employee engagement and retention. These companies have more engaged customers, are more relevant to a broader customer base, are more innovative, and better at problem-solving. The same goes for companies that are more ethnically and racially diverse.

Yet while most C-Suite leaders know this, progress in making corporate America more diverse and inclusive, particularly in its leadership, remains far too slow—and in some cases, the industry has regressed. As of last year, there were only three black CEOs running Fortune 500 companies, which is actually down from seven in 2007.

Despite earnest efforts, it seems like no one in corporate America has really cracked the code on how to make U.S. companies and workplaces more reflective of the diverse makeup of our country.

Part of the problem is that the fixation on diversity numbers dominates the dialogue around diversity and inclusion. But just looking at the numbers may not be the best indicator for progress. While numbers are incredibly important—they provide a needed snapshot of how an organization’s employee base is made up, and can measure things like attraction, retention, and promotion—a focus on diversity numbers alone can create dangerous tunnel vision. By only targeting diversity numbers, businesses can end up failing to deal with the underlying causes of how an organization’s diversity makeup came to be, and what the culture of the organization is like.

The fact is, business leaders should balance their approach by paying more attention to company culture. Workplace culture is critical to advancing diversity targets, and also creates greater equity, unity, and opportunities for minorities, women, and other underrepresented employees. Establishing a workplace where each employee feels comfortable bringing their true selves to work is key to supporting them to stay, thrive, grow, and contribute within an organization. This means making efforts so that employees are aware of (and can prevent) unconscious bias in the workplace, can have open conversations about inclusion-related issues, and feel understood by their teams and management. Employees also learn best when encouraged to actively seek the opinions and perspectives of those who are different from them.

Moreover, diversity and inclusion efforts only work when they are integrated into the core of an organization’s strategy, not siloed away from the center, deprioritized as needed to drive financial results, or tacked on as an extracurricular. Moving the needle on diversity and inclusion requires deliberate planning, and expert execution—and like other business challenges, diversity and inclusion planning requires accountability.

The CEO Action for Diversity and Inclusion, a 700-organization strong coalition committed to changing the diversity landscape in our workplaces and communities (of which I am co-founder), is working to drive that accountability. To do so, we are introducing, as the new CEO pledge commitment, a promise by signatories to present or review diversity and inclusion plans with their boards of directors starting this year.

By presenting such targeted plans to their respective boards, participating CEOs will be underscoring their commitment to real change in their organizations, opening themselves to valuable input from the wisest stewards of their businesses, and ultimately receiving increased support from the organization as a whole to put plans into action. The CEOs that present these plans are also putting into place a mechanism which holds them accountable to their employees to make the workplace better for all.

America’s workplace diversity and inclusion problem is a systemic one—it’s larger than any one company, industry, or sector and is just too big to solve company-by-company. Today’s societal issues are the result of years of institutional racism, conscious and unconscious bias, and lack of access to education and resources in underserved populations. We simply cannot undo all of these deep issues one shop at a time.

Ultimately, a few (read: top, well-resourced) companies fixing their diversity and inclusion issues will not solve the problem for all. Not everyone can work for the handful of companies with stellar diversity programs, and we cannot be satisfied by fixing diversity issues only at organizations that have an abundance of resources to throw at the problem.

And these issues potentially affect most if not all workplaces in this country, not just corporate ones. For that reason, the CEO Action now includes organizations outside of just Fortune 500 companies—smaller businesses, colleges and universities, and nonprofits—because all organizations and institutions should have the same level of access to diversity and inclusion resources.

We need to tackle the issue collectively to bring about lasting change. Leaders and their employees must join forces to reach across industries, silos, and aisles, and form meaningful relationships that drive action, accountability, and a continuously rising standard. As CEOs, our time as leader is limited. We can focus on our bottom line but we also have a rare opportunity to make our society more fair and equitable for all.

Tim Ryan is U.S. chairman and senior partner of PricewaterhouseCoopers and co-founder of CEO Action for Diversity and Inclusion.

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