Kevin Dolan, Senior Partner at the McKinsey & Company office in Chicago, responded to The Impact Lawyers´ questions in regards to the issue of inclusion and diversity in businesses. In May 2020, McKinsey published the third report of a series investigating the business case for diversity, with the title Diversity Wins: How inclusion matters. One of the key statements of the report is that diversity and inclusion matter more than ever in times of the COVID-19 pandemic.   

As the COVID-19 crisis strains business models and balance sheets, we may also see organizations reduce focus on diversity and inclusion programs within their organizations. In part, that is because the COVID-19 pandemic is amplifying existing structural barriers that place diverse talent at greater risk. For example, women, LGBTQ+ individuals and people of color tend to be more represented in junior and mid-level positions that are often seen by many companies as more expendable. 

We’re could also see constrictions in the talent pipeline that could negatively impact diverse hiring for years to come. For example, shutdowns of higher education put college completion at risk for many black Americans who are less likely to have broadband internet connections at home. These students are now likely to be delayed or disadvantaged entering the job pipeline. 

After the 2008–09 crisis, when we asked companies what they believed to be the key organizational dimensions needed to emerge successfully from a crisis, most emphasized the importance of the leadership team and the ability to define a clear direction for the company going forward—both dimensions in which diversity plays a vital role. If leaders reaffirm their commitment to I&D and double down on the programs that were working for them prior to the crisis, they are likely to see benefits. 

Our research has highlighted five key domains where diversity and inclusion has been shown to make a significant difference to an organization’s performance. Organizations who focus on diversity and inclusion now will have greater access to top talent, improve the quality of their decision making, gain increased insight into customers and innovation opportunities, attain higher employee motivation and satisfaction and reinforce a company’s global image and license to operate. Companies that maintain—or even increase—their focus on D&I during the downturn are likely avoid the risk of being penalized in its aftermath, for example by losing customers, struggling to attract talent, and losing government support and partnerships. 

Diversity Wins: How inclusion matters shows that while the business case for diversity and inclusion is stronger than ever, overall progress has been too slow. Over 1000 companies in 15 countries, diverse businesses were more likely to succeed, reaffirming the correlation between diversity in the leadership of large companies and financial outperformance. The study also measures the impact Board diversity has on financial outperformance and explores how inclusion makes a difference. 

I’d remind companies that diversity, while important, is not as critical to focus on as creating a culture of true inclusion. Our research found an inclusive culture to be truly a key differentiator between the companies that led on diversity and those that do not; without inclusion, diverse employees often don’t stay. But most companies aren’t yet there. We found a large gap in sentiment between company’s public commitment and the sentiments voiced by employees, who largely believe that they are not included.