Why Does Diversity, Equity, Inclusion and Cultural Competency Matter?

DE&I as an Operational Imperative

Attaining DE&I excellence is not an organizational “nice to have” – something done only after all other work is complete – but rather a modern operational imperative, woven into the fabric of forward-looking organizations.

What Others Say About DE&I Importance

As leaders of the nation’s most successful and highly regarded organizations know, achieving strong DE&I performance translates directly into more highly engaged and creative teams, and superior bottom-line results. Studies consistently show that increased DE&I leads to greater innovation and broader collaboration, which leads to improved organizational success.

When employees “think their organization is committed to and supportive of diversity, and they feel included,” their ability to innovate increases by 83%.

According to Harvard Business Review, organizations with diverse leadership teams “are 45% more likely to report growth in market share and 70% more likely to report capturing a new market.

Organizations that wish to thrive know they must rely on a broad set of experiences and backgrounds to quickly tackle the toughest problems and provide the best solutions to those they serve. By equipping your organization with the most able, astute AND diverse talent possible, you gain fresh and impactful new perspectives, experiences and insights in beneficial ways previously unattainable.

No wonder organizations with the strongest DE&I performance consistently outperform all others. Companies in the top quartile for racial and ethnic diversity are 33% more likely to financially outperform the median companies in their industry, and companies in the top quartile for gender diversity are 21% more likely to have financial returns above the median.

Five Key Reasons for Improving DE&I

1. Enriched decision-making

Inclusive teams make better business decisions up to 87% of the time and make decisions twice as fast in half the time. How? Team diversity fosters innovation and creativity by providing a greater variety of problem-solving approaches, viewpoints and ideas.

By adding diverse members to your team, you add fresh perspectives based on their varying life experiences. You rely more on facts and less on cognitive biases or groupthink, which likely translates to improved connections with your diverse customer base.

2.Improved innovation & customer/community insights

By increasing organizational diversity, you’re intrinsically better able to understand the customers or communities you serve. Research has shown that “If even one member of the leadership team shares the targeted customer’s ethnicity, the entire team is 152% more likely to understand the customer.” Diversity flows from the top, so if your leadership team is diverse, this will likely disseminate throughout the organization and likely improve your organization’s performance and competitive edge.

3. Enhanced talent recruitment and retention

Strengthening an organization’s human capital is a top issue for organizations seeking to remain competitive and relevant.

Amid a need to remain agile in an ever-changing environment, and leverage a wider array of ideas to solve increasingly complex problems, it makes sense to broaden and diversify your sourcing talent pool.

4. Increased employee satisfaction

Having a more diverse workforce leads to improved innovation, productivity and bottom-line performance and instills stronger employee job satisfaction.

Ninety percent of leaders agree an employee’s organizational fit is equal to or more important than a candidate’s professional skills and experiences.

5. Strengthened employer brand

The most highly skilled, in-demand employees can afford to be selective when choosing an employer. Organizations aspiring to be an “employer of choice” and gaining a competitive advantage via talent quality should consider how their DE&I is affecting their employer brand.

In a recent survey, 54% of women and 45% of men said they researched if a company had diversity and inclusion policies before accepting a position.

Bottom Line

In aggregate, when considering the multiple benefits provided through DE&I excellence, committing to improving DE&I becomes an easier choice. Organizations wanting to enhance performance, differentiate themselves and gain a competitive advantage would be well-advised to make DE&I a strategic priority. Surveying your employee base to assess the status of your culture surrounding DE&I is the perfect place to start.


More likely to capture a new market


More likely to understand customers

Supporting Publications

Can a 10-minute survey get a firm's diversity goals on track? This Minneapolis company thinks so

Art Johnson has a proposition for companies ready to get serious about diversity and retention: Give him 10 minutes with your employees and he'll tell you what's been standing in your way ... 

Getting Diversity Wrong - Chief Executive

Seeing companies striving to rise to the challenge of addressing racial biases and inequities in the wake of the George Floyd travesty reminded me of a study on diversity programs that I co-authored with Columbia anthropologist Catherine Ellis more than 25 years ago. The lessons we gleaned—on what works and what does not—are just as applicable today... 

How Diversity Can Drive Innovation - Harvard Business Review

[N]ew research provides compelling evidence that diversity unlocks innovation and drives market growth—a finding that should intensify efforts to ensure that executive ranks both embody and embrace the power of differences ... 

Magnet for talent: Managing diversity as a reputational risk and business opportunity - PricewaterhouseCoopers

As diversity and inclusion become increasingly crucial in determining how your organisation is perceived by these key stakeholders, it’s important to recognise this as a business issue and, in particular, a reputational risk, rather than just an HR issue. There are clear upsides if you can get to grips with the reputational risks. But there are also damaging downsides ,,,

More Than One-Third Of Workers Would Pass On Perfect Job If Corporate Culture Was Not A Fit - Robert Half

"In today's competitive hiring environment, employers risk missing out on strong candidates if they don't promote what makes their organizational culture unique," said Paul McDonald, senior executive director for Robert Half. "This research reinforces the notion that finding the right fit involves more than evaluating someone's qualifications and experience ...

Diversity In The Workplace Is Now More Critical Than Ever - Forbes

It’s been over 50 years since the Civil Rights Act made discrimination in the workplace illegal. During that period, equality acts around the world have been updated and implemented, yet problems relating to diversity and inclusivity (D&I) in the workplace persist. The broad-reaching ramifications of the global pandemic are the latest challenge.  ...

The Truth About Diversity -- And Why It Matters - Forbes

Diversity is an action, inclusivity is cultural, and belonging is a feeling. Change doesn’t start from top-down leadership; it happens at every level...

Delivering Through Diversity - McKinsey

Our latest study of diversity in the workplace, Delivering through diversity, reaffirms the global relevance of the link between diversity—defined as a greater proportion of women and a more mixed ethnic and cultural composition in the leadership of large companies—and company financial outperformance ...

Why Diversity Matters in Your Workplace -- and How to Achieve It - Inc.


People of different races, sexual orientations, and other differentiating factors all bring something unique to the table, but many leaders defend their choice not to diversify by arguing that cognitive diversity (the diversity of each person's unique life experiences) is more important ...

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Read This:Star-Tribune article about Equimetrics

This article describes the Equimetrics process, as well as a recent success story from Dunwoody Technical College.