The Growing Cost of Ignoring Inclusion
This week, the U.S. released census outcomes and most news centered around the impacts of the previous administration’s efforts to undercount minority and poor populations on political outcomes. I watched, read, and listened—slightly bewildered—to account after account of the gains in red state congressional seats, losses in blue state seats, and the redrafting of voting districts impacts of the future of political races (2020 census results shift political power).
My confusion comes from the perspective of the lack of focus on the impact that the exercise will have on the practical operation of states and municipal responses based on the exclusion of certain populations from the count. Yes, Latino leaders and poverty organizations quickly challenged the accuracy and bemoaned the impacts on communities where their populations of interest live, but no one seems to have done the math.
The nobility of living your values, regardless of how others feel or are impacted, are muted in very practical ways when it comes to business and organizational decision making.
Take, for instance, the family bakery that does not make cakes for gay people, because they believe doing so encourages homosexuality and their religious conviction requires them to fight against the normalization of that community. That decision comes at a cost: some of like mind will increase support, but others—typically more vocal and willing to engage directly—will remove, boycott, or actively work against that business’s interest. That practical (and financial) outcome is real and has to be considered when making decisions on social impact issues related to your organization.
In the case of the administration and congressional leaders, the practical impact of an undercount of these populations is the limitation of resources that support local and state municipalities. Whether you support immigrant communities or the access to services by underserved populations or not is irrelevant, and so is the fact that you decided not to count people who are there. The reality is that these folks really are there and will engage with services and systems that now have limited their federal backstop of support, meaning local communities whose leaders decided to take a principled stance and support the undercount efforts and policy actions will be paying for that position for the next decade.
Like this recent example, organizations make decisions that often work against their own interest, and we advise clients to focus on the organizational impact and the practical outcomes before committing to positions that can impact their actual mission.
In 2019, RW3 Culture Wizard a consulting firm in the D&I solution space, shared the outcomes of the growing costs of ignoring diversity. In it, they compared multiple McKinsey reports that demonstrated the increases directly: “The first is from 2015, and it found that companies in the top quartile for gender diversity on executive teams were 15% more likely to have above-average profitability than teams in the fourth quartile. In 2018, the study revealed an increase to 21%. And, we’ve found that multicultural workforces foster the indispensable combination of diverse talents, skills, and ideas to catalyze creativity and innovation” (Halcrow 2019).
The growing trend of value loss in ignoring inclusion is only deepening. According to the PEW Research Center, an evaluation of U.S. trend shows that more than half of our population growth is attributed to Hispanics (Krogstad 2020). Newly released data shows that nearly 1 in 4 Black people in the US identify as Hispanic or Afro-Latino, and Black economic impact is also rising as recent data shows that over half of US Black households earn over $50,000 a year (Tamir 2021). This, coupled with the growing influence on the economy of the fastest growing working age population in the US—Latinos—who are contributing at escalating rates in all categories, means that excluding these segments of the market will impact business and government bottom lines in very real ways. According to the We Are All Human Foundation and Hispanic Star, Hispanic buying power has grown to $1.7 Trillion, and 8 of every 10 new businesses are being started by Latinos (Building the American Dream 2021). The same report also demonstrates a 72% growth in consumption impact so businesses that sell anything need to consider how not paying attention to this demographic space translates into missed market capture opportunities.
To ensure your organization is taking into consideration the emerging demographic shifts across the country and what it means to you, as a market participant, requires a plan. Prioritizing what you will focus on is critical and maintaining a clear line of sight to its value will help organize efforts and create genuine success. How internal diversity design, pay equity, and similar HR decisions can transform your organization into an employer of choice, and they are all decisions that require the inclusion of: decision makers who can influence the process, the input from actual affected employees, and process owners as well as expectation setting for existing employees.
If your focus is on external messaging, you must be in touch with the communities or desired market participants that you are trying to engage. This means investing time, resources, and focused energy to identify their needs and communication styles, as well as learning about existing perceptions about your organization and how it interacts with the desired group(s). Your organization’s ability to design a brand personality that addresses the needs that you are paying attention to must be consistent and continuous (learn more about brand personality from our friends at Omicle).
CEOs, Boards, and government leaders will always let their moral compasses guide decision making, but we encourage our clients to start from the mission-impact focused view and weigh the effect of other influencers on the actual goals of the organization as a starting point. Important takeaways are:
Look at the market space you occupy. Understand the data is real and demonstrates Pro-diversity businesses are doing better than other businesses.
Determine where you will spend your energy as an organization. Prioritize your critical needs and keep the promises you are making as an organization. Internal diversity and inclusion is different than community impact engagement and customer promises, you need a plan for each and a strategy that connects the dots into a cohesive and consistent story.
Communicate early and often, gaining internal buy-in and setting expectations externally is critical for your success
Measure progress, identifying how you are doing, what’s working, and what’s not will allow you to make decisions on how to pivot and when it make sense so you can deliver the strongest outcomes.
Failing to include all groups, whether in the U.S. Census or in individual organizations, is not only having a negative impact upon underrepresented populations, but it is also preventing organizations from maximizing their market impact. Intelligent Partnerships is focused on helping our clients reduce the risk associated with ignoring inclusion, and you can find tools that support your business or agency here.