DEI: How It Started, How It’s Going & Why It’s Necessary

Diversity, Equity, and Inclusion (DEI) is a concept currently receiving a lot of attention. But it’s also a phrase that encapsulates an evolution in today’s workforce.

Creating a diverse and inclusive workplace where employees feel valued, respected, and empowered to bring their unique perspectives and experiences to the table is a goal of many organizations. Recent studies have found that over 76% of job seekers and employees named DEI as one of their top priorities in their job search and formulating their opinions of companies. DEI is no longer just a goal but a requirement for leadership teams. Here is where DEI started, how things are going, and why it’s necessary for your organization.

Historic Milestones in DEI

Historically, the business world has been homogenous. But since the Civil Rights Act of 1964, which prohibited discrimination based on race, color, religion, sex, or national origin, things have begun to change. This legislation paved the way for more diverse workplaces, but progress has been slow. Initially, companies were required by law not to discriminate. However, they weren’t required to actively recruit or encourage traditionally disadvantaged people to seek the leadership career path.

It wasn’t until 1972 that the first female CEO of a Fortune 500 company was named when Katharine Graham took over The Washington Post. While that historic occurrence happened over fifty years ago, by 2023, only 10% of Fortune 500 companies are led by women. In 2022, six of the Fortune 500 CEOs were Black. While these numbers are the highest they’ve ever been, we still have a way to go in recruiting, grooming, and hiring diverse leaders.

It wasn’t until the 1980s that mainly larger companies began to develop diversity initiatives to increase the number of women and people of color in their workforce.

Today, DEI has become an essential part of corporate culture. Many companies now have DEI teams or officers. They are responsible for implementing and monitoring diversity and inclusion policies, hiring practices, programs, and company culture initiatives.

Some organizations have adopted employee diversity and inclusion training to educate them on overlooked concepts like non-inclusive language and inadvertent alienating actions. Some employers have set targets for the representation of women and people of color in their workforce. In addition, in 2021, President Biden signed the Executive Order on Diversity, Equity, Inclusion, and Accessibility in the Federal Workforce, committing to diversity and inclusion initiatives in Federal government. In 2022, The Commonwealth of Massachusetts passed a similar Executive Order No. 599: Reaffirming Programs to Ensure Diversity, Equity, and Inclusion for Diverse and Small Massachusetts Businesses in State Procurement and Contracting.

Why Some Companies Are Hesitant to Embrace DEI Initiatives

Although there are laws against discrimination and Executive Orders promoting diversity in hiring and contracting, some companies still find it difficult to make DEI part of their leadership strategy. That may be because there’s a:

Fear of Negative Feedback: Some companies are concerned about receiving negative feedback from customers, employees, or shareholders who don’t support diversity and inclusion efforts and/or worry about losing opportunities under an affirmative action environment.

Lack of Understanding: Some companies may not fully understand DEI initiatives and the benefits they can bring to the workplace. Without this understanding, they may be hesitant to invest time and resources.

Lack of Resources: Corporate culture initiatives are often viewed as expensive. Leadership teams may believe the firm doesn’t have the funds, staff, or time to implement inclusion initiatives effectively.

Aversion to Change: Change is difficult. Managing change even more so. Some companies worry that diversity initiatives will disrupt the existing company culture and operations. But, as we’ll see in the next section, that’s not necessarily a bad thing.

The Benefits of Incorporating DEI in Your Leadership Strategy

Many companies are still struggling to create truly inclusive workplaces, and there is a lack of diversity in leadership positions. DEI is not just a box-ticking exercise; it’s a fundamental part of creating a healthy, thriving workplace culture.

DEI has become part of a successful leadership strategy. Leaders who prioritize DEI are better able to create a workplace culture that promotes innovation, creativity, and collaboration. There are many benefits to incorporating DEI into your leadership strategy. Let’s explore a few and how you can achieve these goals effectively.

DEI Drives Innovation
Diverse teams bring a wide range of perspectives and experiences, which can lead to more creative solutions and innovative ideas. Leaders who prioritize DEI are better able to create a culture that values and leverages these diverse perspectives, driving innovation and improving the bottom line.

DEI Promotes Employee Engagement and Retention
Employees who feel valued and included are more engaged and more likely to stay with a company long-term. Leaders who prioritize DEI are better able to create a workplace culture that promotes employee engagement and retention, leading to lower turnover rates and higher productivity.

Disengaged and disenfranchised employees will leave, and if they do so based on what they view to be a lack of diversity or equity, they may review your business accordingly. For example, in a recent study, 37% of workers and job seekers said they wouldn’t apply to a company that was rated negatively by people of color.

DEI Improves Customer Satisfaction
Customers are increasingly demanding more diverse and inclusive products and services. Leaders who prioritize DEI are better able to understand the needs of a diverse customer base and create products and services that meet those needs, leading to higher customer satisfaction and loyalty.

How to Add DEI to Your Leadership Strategy

Knowing about the value and importance of incorporating DEI into your leadership strategy is simpler than effectively adding it. Just like successfully managing any organizational change, communicating the change needs to happen at all levels.

• Start at the top: Leaders must prioritize DEI and communicate this message to all levels of the organization. Prioritizing a DEI initiative is only the beginning. Employees and stakeholders will want to see how the change impacts them and their roles, not just hear about a program or from a committee.
• Set goals: Setting goals for a DEI program is essential to its success. Setting measurable goals toward a higher-level outcome can meter progress and hold leaders accountable.
• Provide education: Leaders should plan education for all employees, including themselves, to address unconscious bias and promote inclusion.
• Lead by example: Leaders who behave in ways that foster inclusivity and value and celebrate diversity will perpetuate any organizational change more smoothly. In addition, mentorship and sponsorship opportunities can help open up dialogue.

Incorporating DEI into your leadership strategy can have significant financial and cultural benefits for your organization. Leaders prioritizing DEI foster innovation, improve their working environment, and increase customer satisfaction. Knowing about DEI and what it can do is different than weaving DEI into an organization. If you are ready to prioritize DEI, Liddell Consulting can help your leadership team develop a program and process that will work best for you. Contact us today to learn more about how to get started.