Yes.
If you’re looking for the short answer.
Let me tell it like it is: brands that are struggling to build or maintain growth, and gain traction could be missing one of the most fundamental aspects of reputational management.
The practice of ensuring all persons receive equal opportunity and treatment, regardless of age, gender, ethnicity, nationality, religion, sexual orientation, disability, education and so on, D&I is far from a new conversation in the business landscape. All the same, it’s not on the upward trajectory across all sectors like you’d expect in 2023. And that’s damaging brands’ reputations.
Recent findings from the British Retail Consortium trade body and the MBS Group advisory firm suggest that UK retailers need to do more on D&I across their exec boards, and that around 66% of retailers examined have no targets to measure progress against. On the same vein, female leadership figures are still wobbling, even throughout recent improvements in the arena.
The fact of the matter is, today, a brand can be defined but how it lives, breathes and echoes the values and priorities of its market. And just as its reputation can suffer without great diversity and inclusion, proving that it can flourish with them is just as powerful an argument.
Here’s how it all comes down to the three Rs, and the numbers that reinforce them.
Diversity & Inclusion and… reputation
Brand reputation is embedded in [practically] everything businesses do now.
Greater globalisation has made brands’ reach wider and more diverse than ever before; social media and “viral” content has expanded awareness of the good, the bad, and the ugly; not to mention decades of poor representation and misrepresentation now make D&I all that more crucial.
Anecdotally, talent partners hear the same message all the time: diversity and inclusion is a top business priority. Statistically, that’s matched by talent priorities, too. A Glassdoor survey in 2020 reported 76% of talent look at a business’ workforce diversity when considering job offers. And nearly half of Black and Hispanic professionals have left a role after experiencing or witnessing discrimination.
When you consider the financial weight of hiring, it makes reputational management all that more important towards a business’ bottom line.
That’s not to say that reputation now relies solely on brands’ talent demographics – it’s still as much about D&I in external messaging.
Amongst 3,000 US consumers, 71% of LGBTQI+ consumers said they’re more likely to interact with an online ad that authentically depicts their sexual orientation. Similarly, 69% of Black consumers in the same survey said they’re more likely to buy from brands which positively reflect their race/ethnicity.
Younger generations of consumers are hyper aware and more value- and purpose-driven than ever before.
Connecting revenue with operational frameworks isn’t always simple ROI, but more and more findings are demonstrating what any good brand or marketing specialist new from the start: diverse and inclusive brands see a direct impact on their margins.
Research from Deloitte found that organisations with a more inclusive culture were twice as likely to meet or exceed financial targets, and in 2021, they found that high-growth brands are more frequently establishing key performance metrics for diversity, equality and inclusion objectives than their lower-growth counterparts; McKinsey found equally compelling figures in 2019.
Facts and figures and findings aside, what’s actually driving positive financial performance in brands with high DEI stats? A huge proportion appears to be innovation, and how a diverse workforce can drive ingenuity.
Talking about – and mitigating – risk is a bit like asking, “how long is a piece of string?”; there’s enough for another dozen columns. But arguably one of the greatest business risks right now is commercial competition.
Amidst the rising cost of living, inflation, and pressure to achieve regulatory measures like ESG targets, businesses are competing like never before to protect their bottom line and build up cash reserves to cushion blows. And the key to driving marketability and commercials is innovation.
Harvard Business Review found that among 1,700 businesses across various regions, sectors, sizes and more, companies with above-average total diversity had 19% points higher innovation revenues, and 9% points higher EBIT margins. Cognitive diversification was also found to be a key indicator of increasing marketability.
Why? Because the differing views and experiences that arise from having a diverse workforce breed innovation and agility. Thriving ideation, relevancy and relatability.
In 2023, reputation underpins a business’ overall success. It drives how investors, consumers and the media perceive your brand, and closely influences your business’ revenue and marketability. All of these things combined and it becomes obvious how diversity and inclusion is a foundational pillar to a brand’s reputation. And why that can suffer if you don’t have the right people with the right priorities at the helm.
Diversity and inclusion isn’t an add-on to help businesses attract quality talent more easily, build its reputation faster, or sell sell sell. It’s plainly only successful if it’s embedded in the very nature of a business. And that only happens when there’s a diverse workforce to drive greater D&I in the first instance.
Bottom line: we’re not talking about anything revolutionary here. We’re talking about how talent and leadership is representative of our everyday society. That what we see in a boardroom presents the same picture as what we see in our homes, schools and shopping malls.
Author: Alice Weightman – Founder & CEO
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