Inclusivity has a direct link to your bottom line

If you are leading a hybrid or remote team today and you are not focusing on creating a culture of inclusivity and belonging, you will very likely not go as far as you could and quite likely simply fail in the long run. Here is why you will pay a high price for this omission:

The link between a lack of inclusivity and attrition => replacing talent is expensive:

There has been a lot of research being published recently on the direct links between inclusivity and retention issues. A toxic corporate culture is 10 times more powerful than compensation in predicting a company’s attrition rate compared with its industry peers (Source: MIT Sloan: Toxic Culture is Driving the Great Resignation). And with toxic culture employees mean one that is disrespectful, noninclusive, unethical, cutthroat or abusive. Basically the opposite of a culture of collaboration, mutual respect, trust, support, joy and appreciation, which are signposts of a culture of inclusion and belonging.

Seven of the 20 most powerful predictors of a negative culture rating relate to dimensions of inclusivity, how well companies encourage the representation of diverse groups of employees and whether they are treated fairly, made to feel welcome, and included in key decisions. (Source: MITSloan Management Review: Why Every Leader Needs to Worry About Toxic Culture).

Having to re-hire for a position that has recently been vacated, because somebody found the culture in their team insufferable, is costly and a slower than average process. Talented employees do their research on work culture in their new team and may choose to not even apply and existing team members will likely never refer a good candidate into a team they find challenging to work with. Constant turnover leads to productivity losses, and there is cost for hiring and training the new employee and the slower productivity until a new employee gets up to speed in their new job. The cost for this increases the more highly skilled the employees you need to replace are, and average about a fifth of a person’s salary, but can be in excess of 200% of the annual pay for highly skilled roles (Source: CAP: There are Significant Business Costs to Replacing Employees).

Lack of engagement directly leads to poor outcomes

An environment that does not accept who I am as a person and makes me feel like I don’t belong, or lets me experience that I am not treated fairly is not likely going to see me motivated and engaged to contribute.

Engagement requires feeling valued, secure, supported and respected and thrives in a culture that makes everyone feel included and appreciated as a person. Businesses with highly engaged employees enjoy 100% more job applications. Great talent will want to innovate, contribute and work with you if you create an inclusive culture.

Disengagement on the other hand has a high price: disengaged workers have 37% higher absenteeism, their organizations experience 18% lower productivity, 16% lower profitability, 37% lower job growth and 65% lower share prices over time. And yes, that lack of loyalty you feel with a team, that you do not care to contribute to, also leads to about double the amount of voluntary resignations. (Source: Harvard Business Review: Proof that Positive Work Cultures are More Productive)

Teams that lack equality and trust are less innovative – especially in remote setups

Innovation thrives on an open discussion and ideation culture that allows for a multitude of differing ideas and a rigorous debate and experimentation around them. There is what psychologists call task tension that takes place in brainstorming and ideation phases. In teams that have good interpersonal relationships and high levels of trust, that task tension leads to creative new approaches and the inclusion of a diverse set of opinions from everyone in the team, regardless of their identities, seniority or professional background.

Without a foundation of equality and trust, that task tension can easily spill over into relational tension, when somebody e.g. believes their ideas get discarded because of who they are. And this tendency is even more likely to occur between team members who do not know each other well and have not yet effectively built relationships and trust with each other. This is often the case in fully remote teams, where some of the members of the team have never met each other in person. And this is even more challenging to navigate in hybrid teams where tooling and the experience of participation and the quality of interpersonal relationships is vastly different for employees on site vs. the remotees on the team. Remote staff may feel left out simply because their audio experience of connecting into a rom full of people is poor, and/or they can’t find an easy way to jump into a lively conversation. Equalizing access by having everyone dial in from their own laptop and ideally from their own space, creates a more inclusive logistical setup. However: everyone also carries with them a set of unconscious beliefs and biases that make a truly equal and open conversation challenging to have, unless there are behaviors and practices in place to address these successfully in the team. If you fail to actively work on creating that inclusive culture, innovation may still happen in your organization, but when you can’t effectively engage everyone in ideation, you will likely not get the best possible outcomes.

High performing and inclusive teams will compete much better

Any truly innovative team can’t know what exactly they will create together before they find that new solution to a problem worth solving. They’ll need to bring together the research of what problem is valuable to solve, a solution design that is usable, the understanding of what is feasible from a technical and domain expertise perspective and be able to judge what is viable to create, in other words, they have to have an understanding of what cost, revenue, sales and delivery aspects are entailed. By definition this is a multi-disciplinary endeavor. And it requires that all the members of a team (or larger parts of an organization) work together well. When every member of such a cross-functional team (or temporary project team) feels like they are equally appreciated, valued and included, they will create great solutions. This requires an interdependent mindset, a joint co-creation process, and a lot of team work and collaboration. Inclusive behaviors foster such an environment. Unhealthy competition, withholding information or expertise or primarily sharing these with an in-group of likeminded and similar people, or a cut-throat culture are poison for that kind of innovation and co-creation culture. Any team able to act inclusive to any identity on their team, any seniority level and every kind of skillset needed will outperform teams that can not tap into that kind of collaboration. Yes, you may be profitable even without focusing on this, but your competitor who is able to intentionally create that kind of culture will be faster, more innovative, more creative and ultimately more successful than you. And guess what, your most talented employees will want to work with a team like that as well. It’s simply way more fun!

In summary, if you care about successful and sustained innovation, retention of your top talent, engagement and great outcomes, you can’t ignore how to coach for inclusive behaviors in your teams. This takes intention and a proactive approach from your leadership roles, especially when they lead in a hybrid or remote context. If you don’t know how to start assessing and fostering this, I’m super happy to work with you on this, feel free to schedule a free consultation to explore how I might help. The good news is: this can be learnt, your investment into this will pay for itself.

Photo by Christina @ on Unsplash

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