Business Leadership Today

Why Forward-Thinking Companies Are Investing in DEI


Matt Tenney, Author of Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process

As the world becomes increasingly interconnected, businesses are finding themselves navigating a more diverse and complex marketplace. This has led to a growing recognition of the importance of diversity, equity, and inclusion (DEI) in the corporate world. 

Far from being just a trendy fad or the bogeyman some make it out to be, DEI has emerged as a critical strategy that can enhance business performance, stimulate innovation, and champion social justice.

In the face of a rapidly globalizing economy and shifting societal expectations, companies are finding that investing in DEI is not just a moral imperative but a strategic necessity.

Companies are investing in DEI to tap into a wider range of perspectives, experiences, and ideas, leading to enhanced problem-solving capabilities, innovative solutions, and a positive reputation. A commitment to DEI can also improve recruitment and retention and increase employee satisfaction and productivity. 

This article will delve deeper into these aspects, providing a comprehensive understanding of why companies should prioritize DEI in their strategic planning.

Brief Overview of DEI

Diversity, equity, and inclusion are three interrelated concepts that are crucial for creating a fair and productive workplace.

Diversity refers to the representation of different identities and perspectives in an organization. This includes but is not limited to, differences in race, ethnicity, gender, sexual orientation, age, physical abilities, socioeconomic status, and religious beliefs.

Equity involves ensuring fair treatment, access, opportunity, and advancement for all people within an organization. It’s about recognizing and addressing the structural barriers that certain groups face.

Inclusion is about creating an environment where everyone feels valued, respected, and supported. It’s about ensuring everyone has a sense of belonging and can fully participate in the organization.

DEI is about creating a workplace that respects and values individual differences, ensures fairness, and fosters a sense of belonging. It’s about leveraging these differences to achieve better business outcomes and create a better world. 

Importance of DEI in the Modern Workplace

In the modern workplace, DEI has become more than just a buzzword and is recognized as a vital component of a successful business strategy for several reasons:

Enhanced Innovation and Creativity: Diverse teams bring together a variety of perspectives, experiences, and ideas. This diversity of thought can lead to more innovative solutions and creative problem-solving approaches.

Improved Decision-Making: Research has shown that diverse teams make better decisions. They are more likely to consider all the angles and potential impacts of a decision, leading to more effective and strategic choices.

Increased Profitability: Numerous studies have found a positive correlation between diversity and financial performance. Companies with diverse leadership often outperform their less diverse counterparts.

Greater Employee Satisfaction: Inclusive workplaces, where all individuals feel valued and respected, tend to have higher levels of employee satisfaction. This can lead to increased productivity and lower turnover.

Positive Company Reputation: Firms that place a high value on DEI tend to be perceived more positively by their customers, clients, and prospective employees. They are seen as socially responsible and progressive, which can enhance their reputation and brand image.

Compliance with Laws and Regulations: Many countries have laws and regulations promoting DEI in the workplace. Investing in DEI can help companies comply with these requirements and avoid potential legal issues.

Diversity is a powerful asset that, when supported by equitable and inclusive policies, can propel an organization to success. 

The Power of Diversity

Diversity drives innovation and problem-solving in organizations. It brings together individuals with varied backgrounds, experiences, and perspectives, enabling companies to access a plethora of ideas. 

On diverse teams, each member contributes their unique perspective, shaped by factors like cultural background, personal experiences, and cognitive style. This diversity can lead to robust discussions, challenging the status quo, and fostering out-of-the-box thinking, resulting in innovative solutions.

Global companies like Google and Microsoft attribute their success to their diverse workforce, which helps them understand their global user base better, leading to products and services catering to a wide customer range. 

Another instance of diversity-driven innovation is the lane departure warning system, the car feature that alerts drivers when they drift out of their lane, developed by a diverse team of engineers considering the varied needs of different drivers.

Diversity isn’t just about representation; it’s about leveraging different perspectives to drive innovation and problem-solving, yielding tangible benefits for companies, customers, and society.

The Benefits of Equity and Inclusion

Equity and inclusion support diversity and contribute to both the attraction and retention of top talent and improve employee satisfaction and productivity.

Attracting and Retaining Top Talent

In an increasingly competitive job market, equity and inclusion have become key factors that prospective employees consider when choosing where to work. Companies that demonstrate a commitment to equity and inclusion are more likely to attract a diverse pool of qualified candidates. 

When employees feel valued and included, they are more likely to stay with the company, reducing turnover and the associated costs of hiring and training new employees.

Employee Satisfaction and Productivity

Equity and inclusion also have a direct impact on employee satisfaction and productivity. 

When employees feel that they are treated fairly and that their contributions are valued, they are likely to be more satisfied with their jobs. This, in turn, can lead to increased productivity, as satisfied employees are generally more motivated and engaged in their work.

The Business Case for DEI

DEI supports strong financial performance. Many successful companies have made authentic commitments to diversity, equity, and inclusion and implemented robust DEI programs and initiatives, yielding positive results. 

Financial Success

Here are some of the ways DEI improves financial performance and long-term financial success.

Improved Ability to Change: Companies that successfully implement DEI policies and practices improve their ability to adapt. This improved ability to adapt to change can lead to improved financial performance, stronger culture and leadership, and more engaged and inspired employees.

Increased Profitability: Companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the fourth quartile. Moreover, the greater the representation, the higher the likelihood of outperformance.

Enhanced Employee Engagement: DEI is conducive to creativity, innovation, enhanced employee belonging, and engagement overall, which drive improved business outcomes and success, including revenue growth and improved profitability.

Risk Identification and Opportunity Exploration: Teams with diverse members have the ability to identify and explore a wider spectrum of opportunities and effectively pinpoint potential risks. This capability can facilitate the implementation of more comprehensive business strategies, contributing to the financial prosperity of the organization.

These financial benefits also facilitate greater innovation. Adaptability and resilience, combined with high employee engagement and a willingness to explore opportunities, lay the foundation for continuous growth. 

Many tech companies, for example, harness the power of diverse cross-functional teams for seamless integration of new features. The concept of identity intersectionality also contributes to better solutions and enhanced customer satisfaction.

Success comes from recognizing that diversity isn’t just about representation; it’s about making room at the table for different perspectives to drive innovation and generate solutions. This means creating an environment where everyone feels valued, heard, and empowered to contribute.

DEI Success Stories

Here are some top companies that have successfully implemented DEI initiatives.

General Motors

General Motors took a public stand against police brutality, racism, bigotry, discrimination, intolerance, and intimidation and has vowed to become “the most inclusive employer in the world.” 

In addition, they committed $10 million to aid organizations that are working toward racial justice and inclusion.


Sodexo, a global leader in food services and facilities management, has earned a spot on Bloomberg’s Gender Equality Index. This recognition is due in part to the fact that women make up 37% of the company’s executive committee and 60% of its board of directors. 

In addition, Sodexo has established over 18 networks worldwide to support LGBTQ+ employees and their allies and recently achieved a perfect score of 100% on the Human Rights Campaign Foundation’s Corporate Equality Index (CEI).

The Moral Case for DEI

Businesses, influential in shaping society, have a moral obligation to promote social justice, with DEI initiatives playing a key role. By fostering a diverse and inclusive workplace, businesses can create equal opportunities for all, contributing to a more equitable society.

Businesses can also advocate for social justice issues, using their influence to support relevant causes and raise awareness. DEI initiatives align with Corporate Social Responsibility (CSR), a model that promotes social accountability and consciousness of societal impact.

Like CSR, DEI initiatives recognize businesses’ broader societal responsibility beyond profit-making. They reflect a commitment to ethical, sustainable, and community-beneficial business conduct. 

The moral case for DEI is clear: businesses have a duty to promote social justice, and DEI initiatives are crucial in fulfilling this obligation, positively impacting society and aligning operations with CSR principles.

It’s important to keep in mind that the business case and moral case for DEI are strongly linked. Over two-thirds of consumers want companies to be more engaged in social and political issues but want this engagement to be authentic, sincere, and supported by real actions.

Challenges in Implementing DEI (and Strategies for Overcoming These Challenges)

While the benefits of DEI are clear, implementing these initiatives is not without its challenges. Here are some common obstacles companies face when implementing DEI initiatives and strategies to overcome these challenges.

Resistance to Change

Change can be difficult, and this is particularly true when it comes to changes that affect a company’s culture. Employees may resist DEI initiatives if they feel threatened or uncomfortable.

Lack of Awareness and Understanding

Many people are not fully aware of what DEI entails and why it’s important. This lack of understanding can lead to skepticism or indifference towards DEI initiatives.

Insufficient Resources

Implementing DEI initiatives often requires a significant investment of time, money, and resources. Some companies may struggle to allocate sufficient resources toward these initiatives.

Inadequate Leadership Support

For DEI initiatives to be successful, they need to be supported by the company’s leadership. However, not all leaders understand the importance of DEI or are committed to making it a priority.

Fortunately, there are some strategies that can help companies overcome these challenges. 

Communication and Education

Regular communication about the importance of DEI and how it benefits everyone can help to overcome resistance and increase understanding. This can be achieved through workshops, training sessions, and regular updates about the company’s DEI initiatives.

Allocating Resources

Companies need to view DEI not as an expense but as an investment that will yield significant returns in the long run. This may involve allocating a budget for DEI initiatives, hiring dedicated DEI staff, or investing in DEI training for employees.

Leadership Commitment

Leaders play a crucial role in driving DEI initiatives. They need to demonstrate their commitment to DEI through their words and actions. This can involve publicly endorsing DEI initiatives, holding themselves accountable for DEI outcomes, and leading by example.

While implementing DEI can be challenging, these obstacles are not insurmountable. With the right strategies and commitment, companies can successfully implement DEI initiatives and reap the numerous benefits they offer.

The Future of DEI

As we look toward the future, DEI will continue to evolve and adapt to changing societal and business landscapes. Two important emerging trends in DEI include the concept of intersectionality and the impact of remote work. 


Intersectionality, a term coined by Kimberlé Crenshaw, refers to the interconnected nature of social categorizations such as race, class, and gender, which can create overlapping systems of discrimination or disadvantage. 

Companies are increasingly recognizing the importance of intersectionality in their DEI initiatives, understanding that individuals often face multiple, intersecting forms of discrimination and different obstacles to success.

Remote Work

The shift towards remote work due to the COVID-19 pandemic has significant implications for DEI. On one hand, remote work can increase accessibility and flexibility, making it easier for people with different needs and circumstances to participate in the workforce. 

On the other hand, it can also exacerbate inequalities if not managed properly, as not everyone has equal access to the necessary technology and resources for remote work.

The Role of Leadership in Driving DEI

Leadership plays a crucial role in driving DEI initiatives. Leaders set the tone for the organization, and their commitment (or lack thereof) to DEI can significantly impact the success of these initiatives. 

Leaders need to demonstrate their commitment to DEI through their words and actions, creating a culture where diversity, equity, and inclusion are valued and prioritized.

The future of DEI will be shaped by emerging trends and the actions of leaders. By staying abreast of these trends and demonstrating a strong commitment to DEI, companies can ensure that they continue to reap the benefits of diversity, equity, and inclusion in the years to come.

Matt Tenney has been working to help organizations develop leaders who improve employee engagement and performance since 2012. He is the author of three leadership books, including the groundbreaking, highly acclaimed book Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process.

Matt’s ideas have been featured in major media outlets and his clients include numerous national associations and Fortune 500 companies.

He is often invited to deliver keynote speeches at conferences and leadership meetings, and is known for delivering valuable, actionable insights in a way that is memorable and deeply inspiring.

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