Why Inclusive Leadership Works
Why invest in Inclusive Leadership? The answer is easy—it’s the best way to not only increase profit, but to achieve success within an organization through improved employee retention and ultimately, greater worker satisfaction.
In my work as a Diversity, Equity, and Inclusion (DEI) corporate consultant, my clients frequently ask me to illustrate the benefits of “Inclusive Leadership”. Since I am not a fan of simply throwing around buzzwords, I chose to tell them a story about two different families.
Don’t worry—the story applies to businesses as well. In fact, whenever I tell it, I am reminded of those organizations that say, “We’re just like a family.”
So, let me begin…
We have Family A—two parents and their child. Just like many families, the parents want their child to be successful. This family has the financial means and ability to access any resources needed to make this happen—highly-rated schools, the best tutors and coaches, healthy food, a comfortable home, influential social connections, etc. Only one thing is missing—safety.
In Family A, the child does not feel safe speaking up to their parents for fear of saying the wrong thing. So the child stays quiet. It’s also definitely not safe to fail. So the child doesn’t try anything new. It’s not safe to experiment, because there are so many rules of what’s right and what’s wrong that it’s hard to keep track. So the child never takes risks and does not freely grow and evolve.
Now, Family B severely lacks access to resources. They don’t have the ability to hire the best coaches or tutors. They do not eat organic food, or live in a good school district, or have robust social connections. But one thing shines in Family B—it is safe. It is safe to fail. It is safe to speak up. It is safe to admit when someone is wrong, and it is safe to try again. It is also safe to experiment with new ideas, new ways of doing things, and to stretch way outside of one’s comfort zone, because the child in Family B knows they will be able to return to the same safety net from which they wandered.
Given the example of the two families, I then ask my clients—which family would you bet on as being a healthier, happier environment for the child? Which family would be able to pivot and support one another if the market implodes and the parents lose their jobs? Which family would be supportive if their child earns a college degree but then decides to not pursue a job in that same field?
Which family is ultimately better suited to navigate the tough times together?
Typically, everyone picks Family B. And then when I ask the audience to think of the families as companies and select in which one they would invest, everyone unanimously agrees—Family B.
Everyone answers that they would choose to invest in the company that may not have as many connections or robust financial backing, but its company culture allows its employees to thrive. The company that lets people know they belong, permits them to push the boundaries, and encourages them to discover innovative solutions and ideas. The company that tells its employees that it's okay to take risks because we've got you. A company that resembles “Family B” is a perfect example of Inclusive Leadership.
Just like in the example, inclusive leaders are ones that actively seek out and consider different perspectives. They are aware of their biases. They use the information gathered from their teams to inform their decisions and to collaborate more effectively. With this type of openness and self-awareness, they create safer working environments where everyone feels accepted and valued for who they are as a person.
The story about Family A and Family B also demonstrates how Inclusive Leadership is inextricably linked to psychological safety. Harvard Researcher Amy Edmondson coined the term in which she defines psychological safety as “a shared belief held by members of a team that the team is safe for interpersonal risk-taking.”
When we are able to increase psychological safety at our businesses and organizations through the practice of Inclusive Leadership, we see results like:
A 27 percent decrease in employee turnover.
According to HR researchers Hewitt Associates, after accounting for the costs of recruitment, hiring, training, and loss of production, the average cost to replace an employee is about 150 percent of that employee's salary.
What was the average salary of the employees that voluntarily left your company or organization last year? Replacing them is likely costing you about 150 percent of their salary. What would it mean to YOUR bottom line going forward if you were able to decrease your turnover rate by 27 percent?
A 12 percent increase in productivity
Every effective team leader tracks or is at least aware of their team’s productivity rate.
What would it look like if your employees were able to be 12 percent more productive? Would that increased return make an investment in Inclusive Leadership worth it.
A 40 percent decrease in safety incidents
This statistic most often interests clients in the food and beverage and manufacturing industries that are at greater risk of safety incidents. But, safety does not always have to mean the absence of physical danger.
At one company I worked with, safety was their core value. When they realized during our time together how important psychological safety was, and that it impacted their bottom line, they broadened their definition of safety beyond just the physical. They realized how important it was to them to create an organization where leaders and employees are safe to speak up on the issues that matter most.
For companies that value Inclusive Leadership, and in turn achieve psychological safety, it creates an environment where employees are looking out for each other. When a workplace has psychological safety, everyone belongs. Employees don’t just co-exist, they are a part of something bigger. They take extra care in their interactions with each other and ensure that everyone is physically, mentally, and emotionally saf
Imagine if the money you invested in preventing safety incidents and increasing psychological safety became significantly more effective, and the associated costs went down by almost half. How would that affect YOUR bottom line?
Besides my work as a DEI corporate consultant, I’m also an Executive Coach for LGBTQ+ professionals with a focus on vocal empowerment. When I found statistical proof that when an organization increases its buy-in to Inclusive Leadership and supports the psychological safety of its employees it becomes easier for them to speak up, particularly those that identify as LGBTQ+ , of course I was ecstatic.
In a research study conducted by VitalSmarts (now Crucial Learning), researchers concluded that every time an employee avoids a high-stakes conversation, it costs a company $7,500.
In the ideal workplace, organizational leaders have the training and exhibit the inclusive leadership skills to effectively support all employees. These leaders understand and embrace the opportunity and responsibility to ensure that all of their employees experience equity, safety, and belonging in their work environment, regardless of how they identify.
When companies are lacking in inclusive leadership and psychological safety, it’s safe to assume they are also struggling with authentic inclusion and allyship. It is in these environments that I often hear from employees, “I really want to say something, but I have no idea what will feel supportive and not offensive. So I end up not saying anything at all. But that doesn’t feel like the answer.”
That lack of support preventing employees from speaking up in the workplace is especially daunting when it’s compounded with navigating conversations around LGBTQ+ issues. Many companies are leaving these issues out of the conversation when it comes to addressing authentic inclusion because the path forward is perceived as too polarizing, and so their policies stay stagnant.
Regardless of my professional opinion, the above statistic clearly identifies the importance of vocal empowerment as an important component to psychological safety and inclusive leadership as a whole. It’s easy to see that when an organization increases psychological safety it not only becomes much easier for employees to speak up, it is important to the bottom line that they feel comfortable doing so.
How much money is it costing your bottom line due to your employees not feeling safe enough to speak up? What is your company risking if it doesn’t address LGBTQ+ issues as a part of inclusion and psychological safety?
If we look at the future of work, the risk is huge.
As mentioned, my work as a DEI consultant focuses on the LGBTQ+ community, of which I am a member. Viewing the talent pool through that lens, it’s likely that within five years, Generation Z will occupy more than 25 percent of the workforce and LGBTQ+ employees, while not the majority, will make up a sizable component. The fact is there are statistics that report Gen Z is identifying as LGBTQ+ anywhere from 24% to 33%. Regardless, we’re looking at anywhere from a quarter to one-third of an entire generation being part of this protected community. How can you ensure that your recruiting, interviews, onboarding, and ongoing development and leadership practices support your LGBTQ+ employees to feel a sense of safety, belonging, and authenticity in the workplace?
However, it’s not just upcoming generations that will benefit from such practices. Inclusive Leadership also supports Generation X employees, who are the parents of LGBTQ+ children. The majority of LGBTQ+ employee resource groups that I work with are heavily populated by these parents, and they value employers who support them as they navigate their parenthood journeys. Many of these parents find it challenging to come to work weighed down by issues their marginalized children face, such as bullying and discrimination, and not knowing which co-workers are safe in which to confide.
If managers fail to recognize and address individual and organizational bias and miss the opportunity to improve workplace culture, this growing component of the workforce will choose an employer where they feel seen and can safely bring their full voices forward. And those organizations will miss out on the diversity of problem-solving, communication skills, and other valuable attributes of a huge part of the workforce.
The fact of the matter is that while Inclusive Leadership can feel like a “soft skill” that doesn’t actually impact the bottom line, as you can see, we now have data that shows it’s one of the ways a competitor could edge you out in attracting and keeping valuable workers through higher productivity, greater retention, and lower safety and legal costs.
Inclusive Leadership is critical because of what we all knew from the beginning of this article: Family B will win. We would all put our money behind the organization that is psychologically safe and therefore, most inclusive. And when we invest in Inclusive Leadership development, we get to bet on the success of ourselves, and our organizations.
That is why Inclusive Leadership works.
Inclusive Leaders are developed every day through our Four Pillar training program. Information regarding the trainings can be found here.