9 min read
Opinions expressed by Entrepreneur contributors are their own.
Evaluating risk is an important element of running a business. As business owners and entrepreneurs, we want to mitigate as much risk as possible to ensure our business can continue to grow, profit, and impact the world —especially in these uncertain times.
If we look at intentional Diversity, Equity, and Inclusion (DEI) work, we can actually use DEI to directly impact the ability to manage risk. Many people view DEI as a “nice to have” that helps support moral and social consciousness within businesses. But, it is actually a strong and vital way to mitigate risk in the marketplace, especially through the lens of reputational bias, process bias, leveraging assessments and audits, and ongoing strategic DEI learning and development experiences.
1. Reputational bias
If you don’t directly address or operate intentionally around DEI issues, reputational factors can be at risk. This is especially true in the current political, business, and social climate. We’ve seen in the past months how not addressing DEI or sharing your thoughts publicly about inequities in society can affect a business’s public perception and bottom line.
From another angle, small businesses — and particularly small women- or minority-owned businesses — must operate very lean. This means you may not have big sophisticated systems or processes in place. A benefit of this is that even though you are smaller, it does not mean you have to operate and think like a small business. We can mitigate risk in different ways.
Related: Now Is the Time to Integrate Diversity and Inclusion Initiatives Into …
When businesses are new, building their brand, and trying to grow, it requires having a strong reputation of credibility and quality service of product.
From a consumer perspective, if you make a mistake around the space of DEI, people can really criticize and scrutinize a business’s efforts. Brands can miss the mark by not doing their homework to realize something was offensive or tasteless.
Sometimes there is a notion that people are only paying attention to ‘Big Box’ brands or corporations. But, the same holds true even for small businesses who may not have a history of equity in their brand. The last thing you want is for something to occur because you just weren’t paying attention through a DEI lens, and you’ve gone into territory that is highly offensive or damaging to the brand.
From a different angle, it’s hard to get good talent right now. Talented employees have their choice of employers, and everyone wants to work for a brand with a reputation of being equitable, inclusive, and practicing what it preaches.
The bottom line is that with many businesses and organizations, their entry point into DEI is for character reasons. They want to be on the right side of the conversation. Not only does this create value for humanity, but also business and reputation value.
2. Systems and processes
Solving for DEI requires looking at systems, procedures, policies, and culture. Another way you can solve for business risk is to solve for process bias. We’re so used to solving for ‘people bias’ that we don’t often talk about ‘process bias’.
Many different business processes — such as how you onboard employees, how you secure suppliers, how you recruit, or how you market — can be operated through a lens of DEI.
Take time to audit your processes and see where you may fall short in respect to DEI.
Related: Equity, Inclusion And the Evolution Of Venture Finance
For one example, I’ve noticed that often there is a bias in the recruiting process. Some businesses will deem it sufficient to just put the job posting on their website or on a couple job posting sites like Indeed or Monster. And their notion is by doing that, they’ve now put it out there for equitable public consumption.
There is in fact a bias in that viewpoint. It takes much more intentional effort and strategic planning to bring in a diverse offering of candidates. You need to have taken the time to build partnerships with diverse organizations, leaders and communities that have access to populations that are underserved and underrepresented.
You want to make sure whatever the process is in your business, the lens is guided by DEI considerations. It would be wise to have a checklist of key considerations as you reflect on your different processes, such as:
Does this solve for casting a wide net and ensuring we can meet diverse constituents?
Do we have accountability measures even before we field this position?
Do we feel certain our hiring managers have done due diligence to create a diverse applicant pool?
Does this process assess for equity and solve for any unconscious bias present?
By assessing for process bias, we can become more aware of and fix any issues—and therefore better integrate DEI practices.
3. Leveraging assessments and audits
Beyond processes, leveraging assessments and audits across your business or organization can help you to identify and course-correct where you may have risky DEI behaviors in your business.
You can do these assessments in various ways. They can include employee engagement surveys, stay interviews, or one-on-one conversations with different leaders or employees in your business. You’ll want to collect certain data about satisfaction of employees and then use this to plan out strategic decision-making.
One important element, even in the world of startups, are the stay interviews. People often do “exit interviews” when people are leaving, but why not include stay interviews to ensure people are supported in staying with your business—to ensure you’re cultivating a sense of belonging with your culture?
For stay interviews, you can ask:
What keeps you working here?
What keeps you engaged in our culture?
Are people feeling psychologically safe?
Are there any special accommodations that you feel that you need?
What do you perceive we could be doing differently that could allow you to reach your goals and perform at a higher level?
What do you look forward to when you come back each day?
What would you change about your job?
What would make your job more satisfying?
What talents would you like to use in your current role?
What can I do to best support you?
Are you feeling seen and supported as an individual?
If your culture or environment is not one where people are willing to be vulnerable and share some of their challenges, this can provide issues in both employee productivity and wellbeing, and association with the company.
For example, if an employee has special accommodations such as an invisible disability or challenge in how they show up — perhaps a parent of a special needs child who needs a lot of doctor’s visits—some people are reluctant to share that with their team or employer because they fear the employer may not be committed.
We want to create cultures and environments where people can be at their best and feel authentic. If people are masking parts of who they are, then they aren’t showing up as their full selves.
If you ask questions like this as a routine, it can create a more inclusive culture and experience for team members. And if issues arise, they can also be brought up and corrected. The goal is to open up communication for people to share what their needs are, what potential barriers are, and how they can be best supported, all so leaders can try to accommodate those needs.
4. Ongoing strategic DEI learning and development experiences
If we can continue to put forth strategic learning and development opportunities then people can understand the constructs and purpose of DEI. This in turn can decrease the risk of perception, reputation, and general business practices that are not inclusive.
It’s wise to create a multicultural engagement strategy. Without a multicultural engagement strategy, you do not have a growth strategy. People will have a greater propensity to leverage mindsets, knowledge, and skills for the work they do in the organization if they are feeling seen, heard and valued.
With ongoing learning and development, we can then connect the accountability factor. It’s not enough to just say, “Here are the DEI expectations,” if you are not enforcing them. Through some form of ongoing accountability — when you talk about training, promoting awareness, and exposure — you can actually make sure these actions and ideas are coming to fruition.
Ongoing learning and development experiences help to support your infrastructure as well. Infrastructure is a big part of DEI work. Part of managing business risk is to be thoughtful and intentional about the types of actions of building the right infrastructure within your business.
Don’t just grab your product manager and say, “Hey, can you give some attention to DEI?” Make sure you have the right resources and framing to have success with DEI — whether that’s hiring a consultant or coach. Don’t just assume that because you are an astute business person that you know how to strategically integrate DEI into the organizational culture.
You need the right human capital, the right financial capital, and the right infrastructure.
DEI is good for business
America is changing face. We’re soon going to find ourselves with no racial majority. If people do not find ways right now to attract and appeal to multicultural audiences, they are not going to have a workforce in the future. DEI is a strategic advantage and we must find it appropriate to get intentional about a multicultural strategy as part of the growth strategy.
This means developing systems, processes, and practices wherever you develop a culture where those multicultural people feel a sense of belonging.
These days, it’s a business risk NOT to navigate your business through a lens of DEI. You want to ensure that you are enacting the processes, procedures, review, and infrastructure to ensure you’re meeting a diverse and multicultural marketplace. In turn, you’ll decrease risk and increase success in the coming years.
Related: How to Use Executive Search Recruitment Practices to Foster …