Aligning DEI With Business Objectives
As DEI consultants, our clients often want us to help them understand and articulate how focusing on DEI can have a positive impact on their business imperatives. Many can see the theoretical benefits of having a more diverse workforce. Nevertheless, it can be a struggle to understand how to maintain mission-critical goals, whilst simultaneously putting effort and resources into DEI. Often, businesses will see focusing on DEI as the right thing to do - but as conflicting with their commercial ambitions.
This is a fallacy. We have all been duped into a specific brand of capitalist thinking: that profit alone must be what we strive for, to the detriment of purpose - an idea that the brilliant economist Mariana Mazzucato has emphatically disputed. In her words:
A more purposeful capitalism requires more than just words and gestures or speeches of good will. It requires purpose to be put at the centre of how value is defined in firms, in governments, and by economic theory.
Businesses can and should operate both for social good and for profit maximisation, and a symbiotic relationship can exist between the two (in fact, even the word corporation is derived from the Latin ‘corpus’, or ‘body of the people’).
The same idea holds for ploughing resources into DEI. Many forward-thinking organisations know that their DEI efforts, when explicitly linked to their business goals, can drive innovation, performance, and competitive advantage. But they also know that to reap the benefits, DEI must be fully integrated into a company's DNA, tied strategically to key business objectives, and evaluated rigorously.
This guide outlines a strategic approach to connecting DEI to core business goals, ensuring that your DEI efforts create tangible value for your organisation.
First we begin with the basics, and the ways in which DEI drives organisational success:
Increased Innovation: Diverse teams bring together a wide range of perspectives and ideas, driving creativity and innovative problem-solving. It is important to note here that creativity can be stifled however if a psychologically safe and inclusive environment has not been created for all employees.
Improved Financial Performance: Companies with strong DEI strategies tend to outperform their peers. For instance, McKinsey & Company’s consecutive Diversity reports, suggest rather compellingly, that when there is greater ethnic and gender diversity in leadership, businesses are much more likely to have above-average profitability. For those still not convinced, Mckinsey’s data shows that a lack of diversity in organisations is becoming more and more costly.
Attracting and Retaining Talent: It is no secret that representation matters. When individuals with marginalised identities see themselves reflected in an organisation, they are more likely to be a attracted to the business. Better yet, if an inclusive and equitable culture exists within the organisation, diverse employees will want to stay! Thus reducing the financial and human cost of turnover, and improving employee engagement and performance.
Enhanced Brand Reputation: We are living through a time of huge social and political upheaval, and now more than ever, potential employees, consumers and investors, are looking to organisations to reflect positive social values. The reality is, organisations can no longer get away with merely ticking boxes when it comes to DEI. Thanks to social media, candidates and employees now have more power and a platform through which to whistleblow. For investors, organisations that safeguard against such risks by building out a sustainable DEI approach, are more enticing, and have greater brand reputation.
To drive business results, DEI interventions need to align their purpose with your organisation’s overarching goals, from recruitment and expansion, through to increased sales and innovation. Below we outline some fairly typical business goals and how to weave DEI into them.
Objective 1: Talent Acquisition and Retention
Why It Matters: Diverse and inclusive organisations are more attractive to top talent, especially Millennial & Gen Z workers who deeply value corporate social responsibility.
DEI Strategy: Develop a hiring strategy that a) focuses on reducing bias in recruitment (as much as possible), by expanding out talent pools and removing barriers that create homogeneity of candidates (e.g. criteria around education and qualifications); and b) provides equitable opportunities for career development and promotion, by having a fair and transparent framework for advancement and internal sponsorship to help marginalised individuals to progress.
KPIs: Track diverse hires, promotions, and retention rates by demographics (gender, race, age, etc.). Measure employee satisfaction and engagement through pulse surveys or focus groups.
Objective 2: Innovation and Product Development
Why It Matters: Teams with varied backgrounds, experiences, and perspectives are more likely to generate novel ideas, identify market gaps, and develop innovative products.
DEI Strategy: Create cross-functional, diverse teams that can collaborate on product development and problem-solving. Consider allowing employees to job craft, and on any given task allow employees to play to their strengths. Crucially, diverse voices must be centred in decision-making processes.
KPIs: Track and celebrate new ideas (even if they don’t work out - failure is the key to innovation), track the speed to market for new products, and measure customer satisfaction scores for products developed by diverse teams.
Objective 3: Customer Reach and Market Expansion
Why It Matters: In a global marketplace, understanding the needs of diverse customer segments is critical to gaining competitive advantage and growing market share.
DEI Strategy: Analyse your customer base to identify underserved or overlooked demographics. Identify the needs of underserved groups with market research focus groups. Use these insights to tailor marketing strategies and product offerings to those marginalised groups.
KPIs: Track customer demographics and satisfaction by group. Monitor market penetration and revenue growth in new demographic segments or regions.
Objective 4: Financial Performance
Why It Matters: Diverse companies are more likely to outperform their less diverse counterparts. Improved innovation, engagement, and customer satisfaction all contribute to higher financial returns.
DEI Strategy: Align DEI goals with financial performance by focusing on inclusive leadership, equitable pay, and access to opportunities for all employees. Integrate DEI into budgeting, resource allocation, and performance reviews.
KPIs: Track profitability, revenue growth, and market share relative to DEI progress. Include DEI metrics in executive performance evaluations and bonus structures.
To successfully tie DEI to business objectives, you’ll need a compelling business case that resonates with your leadership and stakeholders. This business case should be tailored to your organisation’s specific industry, market, and corporate goals. Here’s how to build it:
Data-Driven Insights: Use both internal and external data to demonstrate the impact of DEI. For example, show how a lack of diversity in leadership has impacted decision-making or how diverse teams have contributed to successful product launches. Benchmark against industry competitors to show where your company stands and how DEI can offer a competitive edge.
Quantify the Benefits: Use metrics to forecast the long-term ROI* of DEI initiatives. For instance, estimate the savings from reduced employee turnover or the potential revenue from tapping into new customer segments.
Address Risks: Highlight the risks of ignoring DEI, such as reputational damage, legal liabilities (e.g., discrimination lawsuits), and missed market opportunities. Provide real-world examples where companies failed to meet DEI expectations and suffered the consequences.
*Exercise caution here. DEI is a moral imperative, not just a commercial one. We’ve seen in recent years the sweeping redundancies, which often include deep cuts to DEI teams who were not properly set up for success in the first place. The commercial benefits of DEI are clear, but this work requires long-term commitment, and continued iteration, in order to maximise its financial impact.
A successful DEI strategy requires more than policies and metrics—it must be part of the company’s DNA. Organisations need to embed DEI into their culture through daily practices, communication, and employee behaviours. Here’s how:
Foster Psychological Safety: Create a workplace environment where all employees feel safe to express themselves, share ideas, and raise concerns without fear of retribution. Psychological safety drives innovation and creativity.
Inclusive Communication: Ensure that all communication, from internal emails, to marketing materials, reflects inclusivity. Avoid language, imagery, or assumptions that might alienate or exclude certain groups. Similarly, avoid tokenism and try to keep your language authentic.
Employee Resource Groups (ERGs): Support ERGs as a way to foster a sense of community, mentorship, and development for underrepresented groups. Encourage cross-ERG collaboration to break down silos and promote inclusion across the organisation.
One of the strongest drivers of a successful DEI strategy is inclusive leadership. Leadership teams must not only support DEI in theory but actively participate in and model inclusive behaviours. Here’s how to ensure your leadership is aligned:
Diversify Leadership: Ensure representation of diverse voices at the executive level and in decision-making bodies. Leaders from diverse backgrounds bring unique insights and help embed DEI into organisational culture.
Training and Accountability: Provide leadership training on inclusive decision-making and equitable management practices. Hold leaders accountable by including DEI metrics in performance evaluations and compensation packages.
Visibility of Commitment: Leaders should communicate their commitment to DEI regularly and transparently. This helps set the tone for the rest of the organisation, signalling that DEI is not just an HR initiative but a business priority.
To align DEI to business objectives effectively, you must continually track progress and adjust your strategies based on results. Here’s how to ensure accountability:
Set Clear, Measurable Goals: Define specific DEI goals that align with business objectives. For example, if your objective is to improve innovation, your DEI goal might be to increase the percentage of diverse voices in product development teams by a certain percentage over the next year.
Regular Reporting: Establish a system for regular reporting on DEI metrics alongside other business KPIs. Transparency is key—share progress with both internal and external stakeholders.
Iterate and Improve: Be flexible and ready to adapt your DEI strategies based on what the data shows. Celebrate successes but also acknowledge setbacks and areas that need improvement. Engage employees at all levels for feedback on how to continuously evolve the strategy.
If we want DEI to weather the current storms, we must continue to apply a rigorous, iterative and strategic approach - as we do with all other business functions. The next phase of DEI requires more than lunch & learns and cultural celebrations, but a deep and sustainable commitment to driving impact.