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The “how” in creating inclusive workplaces

Creating a diverse and inclusive workplace takes more than just the will to make it happen.

Leads McKinsey’s diversity, equity, and inclusion work; directs initiatives focused on establishing inclusive, productive workplace cultures that support greater collaboration and innovation from a diverse workforce

Drew Goldstein

Advises clients across various industries in creating and sustaining high-performing workplaces with particular expertise in culture, organization design, diversity, equity, and inclusion

Laura London

Helps clients create and sustain long-term success by making the most of their people, culture, and organizational design. Serves as global leader for McKinsey Influencer, an organizational network analysis tool that helps identify the “hidden influencers” who can make or break a change program

A leading private equity firm was focused on improving its diversity for years, but it was struggling to see results from its efforts. With a workforce consisting of less than 15 percent women and a small pipeline of female prospects in place, many leaders were worried about the numbers. However, this concern did not obviously translate into dollars, and the HR leadership team was struggling to secure additional resources to address the issue.

The firm was performing well and its diversity numbers were in line with the industry. However, through interviews with employees, leaders learned that women and other minority groups experienced a very different workplace from the white male majority. Still, they struggled to understand what to do with that information.

Over the past few years, more and more companies across industries have faced similar situations. Research has continually shown organizations that are more diverse outperform peers on longer-term value creation. While research has helped to drive these discussions forward, organizations have craved a simple way to understand whether employees of all backgrounds feel valued and supported. To address this need, we conducted extensive research and literature reviews of workplace inclusion, identified and aligned on major drivers with experts, generated and tested a framework and related employee questionnaire, and launched an assessment model to tackle this tough issue.

McKinsey’s inclusion assessment tests whether a subset of employees believe they have an equal chance of succeeding. By taking this data-driven approach, we identified that inclusion exists when employees share a positive connection to the organization and their peers (belonging); perceive that everyone has an equal chance of succeeding (equality); and feel safe to express thoughts, ideas, and concerns about work (openness).

To create belonging, peers show interest in others' ideas and well-being, leaders show concern for employee well-being, and action is taken to prevent and stop inappropriate behavior. To create equality, peers actively support diversity, leaders encourage diversity of thought, employees have access to what they need to do their jobs, promotions and pay are decided in a fair manner, and the company creates room for diversity groups and initiatives. And to create openness, peers treat one another with respect and leaders encourage discussions, risk-taking, and feedback. We can now quantify and address inclusion with the same rigor that we use for other critical business topics, such as performance and organizational health. Belonging, equality, and openness have now become the leading indicators formalized into a model/methodology and approach to measure workplace inclusion through this assessment.

After running the inclusion assessment, leaders at the private equity firm took a hard look at the data and agreed that they needed to act quickly. Their overall inclusion score looked fine, but perceptions of under-represented groups painted a much more troubling picture. This is common; more homogenous organizations tend to have better overall inclusion scores, masking the underlying experience of some subgroups. More diverse organizations tend to have lower overall scores, given the greater presence and weighting of under-represented populations; we refer to this as the “diversity tax.”

The HR leadership team immediately communicated existing policies related to protecting employees, pay, and promotions. They also used the data to secure the resources needed to launch conscious inclusion training across the organization, to implement manager best-practice training, to continue working at recruiting diverse top talent and widening the funnel, and to further engage with under-represented populations to understand where they should improve. Within three months, the team took control of the conversation, set a baseline, developed a plan, and gained the support needed to move the needle on both diversity and inclusion.

By defining an aspiration, diagnosing their current practices, developing a roadmap with clear key performance indicators, and optimizing based on their learnings, the private equity firm was able to lay the foundation for their ongoing inclusion journey.

The authors would like to thank David Mendelsohn for his contribution to this blog post.

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