New i4cp Research: Faking Diversity is Bad for Business

Fake it 'til you make it doesn't work when it comes to diversity and inclusion (D&I). New research from the Institute for Corporate Productivity (i4cp) shows that efforts to promote diversity solely to improve a company's brand or image can actually have a negative effect on market performance--at least when those efforts don't represent a genuine commitment to having a more diverse and inclusive culture.

The new i4cp research report, Diversity & Inclusion Practices that Promote Market Performance, looks beyond standard D&I program infrastructures and benchmarks to expose the organizational values and behaviors that have the greatest impact on market performance. The report features four key findings, as well as case studies from American Airlines, Baystate Health, Kelly Services, and Ingersoll Rand.

Among the findings is that the why behind diversity and inclusion efforts matters. When asked about the drivers of their organization's D&I strategies, high-performance organizations reported pursuing D&I to strengthen some internal element of their organizations, such as enhancing their culture, increasing innovation, or because it's integral to the business strategy.

Low-performance organizations, however, are 2.5x more likely to say they pursue D&I to enhance public relations and branding efforts, and also are more likely to focus on satisfying other external demands such as legal compliance or meeting shareholder expectations.

The argument could be made that the end justifies the means--in this case, that promoting D&I efforts externally might, in the long run, result in a more inclusive workforce. But the research shows otherwise. If a company doesn't truly embrace D&I, if its leaders don't espouse the value of inclusion, communicating a different message will likely backfire.

The report, which was developed in coordination with several heads of diversity from i4cp's Chief Diversity Officer Board, is now available exclusively to i4cp member companies.