Organizational change is the process by which companies or other organizations change the way they operate, use technologies, are structured from a people perspective, and adapt to changes in the market.
Essentially, if your organization is in any kind of flux state related to people, products, or operations, you’re dealing with organizational change. And in order to remain relevant, you should have your radar tuned to early signs that a change could benefit the organization.
Drivers of organizational change include the economic climate, consumer tastes, new technologies, government policies, and competition.
Diversity, equity, inclusion, and belonging (DEIB) have been hot topics for the past year and a half. We hope they will continue to be in the future. Diversity simply means differences between people. A colleague once described the difference between diversity, equity, and inclusion in this way: Diversity is being invited to the party, inclusion is being asked to dance, and equity is having a seat at the planning table. When done well, these three aspects can create a sense of belonging: a sense that one is truly a part of the greater whole.
Here are four things to consider if you want to improve DEIB to support organizational change:
The Role of the CEO
DEIB isn’t just the job of your chief human resources officer or VP of People. It’s everyone’s job, and the CEO goes first. To create a felt sense of inclusion and belonging, the role of the CEO is to model inclusive behavior. That means actively listening to marginalized voices, behaving as an ally or accomplice, and taking on the role of mentor. CEOs mentor people all the time, but how often do they mentor marginalized employees? It doesn’t have to take up all your time if you do it right (ask me how!)
Informal Power Dynamics
It’s important to identify and then minimize the informal power dynamics that occur within organizations. One very common type of informal power can be seen in the “old boy’s club/network.” I experienced this early in my career when I realized that a lot of important decisions were made on the golf course. I immediately took up golf lessons, but they didn’t help: the men played with other men and we women were still left behind.
Much informal power is related to privilege, so it requires intentionality to mitigate these informal power dynamics. One good way to do this is to instill a formal mentorship program, ensuring that marginalized team members get the same opportunity as white, cis-gender men. Without a formal program, people tend to be drawn to help (or ask for help from) people who are like them.
Data on Organizational Performance
There’s a strong business case for doing the work needed to become a diverse and inclusive company. Companies with diverse management perform 19% better than those with all-white, male managers; those with racially diverse teams perform 35% better, and gender diverse teams perform 41% better.
Companies that have women on the board of directors see a 53% improvement in performance– 43% more sales and 66% ROI. It’s not just the right thing to do; it’s really good for business. DEIB performance at companies has been under the microscope since 2020, and one thing that’s clear is that it’s not enough to simply hire more diverse team members. Creating a sense of inclusion and belonging is essential if you want them to be engaged, productive, and around for a long time.
Psychological safety is the single biggest thing that can support a sense of inclusion and belonging. In 2012, Google studied hundreds of teams to determine what made teams most effective. Nicknamed the Aristotle Project, this study remains the gold standard for how to build an effective team.
Researchers discovered that the most important dynamic for effective teams is psychological safety. They defined psychological safety as “an individual’s perception of the consequences of taking an interpersonal risk or a belief that a team is safe for risk-taking in the face of being seen as ignorant, incompetent, negative, or disruptive. In a team with high psychological safety, teammates feel safe to take risks around their team members. They feel confident that no one on the team will embarrass or punish anyone else for admitting a mistake, asking a question, or offering a new idea.” Teams that work to create vulnerability-based trust develop high degrees of psychological safety. And because of how the brain works, building trust isn’t as easy to do when you have a diverse team.
It’s clear that organizations with diverse leadership and team members, when there is a sense of inclusion and belonging, are more resilient and productive. That resilience goes a long way toward helping those teams effectively navigate organizational change.