The Importance of Diversity, Equity, and Inclusion for Effective, Ethical Leadership

By: Lisa R. Coleman, MD, MPH, Erica D. Taylor, MD, MBA

INTRODUCTION—WHAT IS DIVERSITY, EQUITY, AND INCLUSION?

Take a moment the next time your find yourself in a room with others. Look to your left, then to your right. Who do you see? Do you see people in the room who look like you, share similar ideas, share your gender? Alternatively, do you see an array of backgrounds, ideologies, and identities? If you are experiencing the former and not the latter, you may be missing out on critical benefits and opportunities for achieving optimal leadership. We are at a critical juncture where leaders and teams are recognizing the value of diversifying groups but have yet to understand the true “why” and “how” of achieving inclusivity and belonging in our field. Through understanding of the true meaning of diversity, equity, and inclusion (DEI), its value and phenotype, leaders will be able to harness the power of creating an environment where all people can thrive and contribute.

Diversity, equity, and inclusion are separate terms woven together to provide institutions a roadmap to creating environments and workforces that are effective and maintain high-quality talent. The terms are commonly used interchangeably but, to utilize its full effects, it is necessary to understand each term individually in the context of leadership.

Diversity

The term “diversity” is often associated with dimensions of visible difference but its meaning goes much deeper. Derived from a combination of Latin and old French, its root means to “turn aside.”¹ Along those lines, diversity challenges leadership to “turn aside” from a homogenous environment of related peoples and ideas and lead their organizations into a world rich with people who differ in race and ethnicity, gender, ideologies, beliefs, learning styles, religions, personalities, abilities, socioeconomics, and several other aspects of individuality. It is important that leaders consider an inclusive context of diversity and unlock its importance. Heterogeneity creates an environment where peoples of different skills and tools can work together to create new innovations and solutions that were otherwise impossible to recognize if only single-tone perspectives were brought to the table.² This introduces the relatively newer concept of the “diversity bonus.”² The “diversity bonus” is a term used to describe the power of bringing together individuals with diverse characteristics and minimal skill overlap in a way that produces better outcomes and new ideas.²

There are some organizations who have a set framework of what they subjectively believe makes the best candidates for a team. By using such rigid standards, these  organizations do not have the chance to experience diversity bonuses because they filter out any candidate that deviates from their norm.³ These individuals, even though high quality according to these subjective standards, do not add any diversity bonuses because they bring similar overlapping skills to the group.²

Case Example #1: Company “Alpha” has a hiring screen that only allows for candidates with certification test scores of the 90th percentile or higher and requires each applicant to have experience with project funding to be reviewed. By this methodology, it is likely that they will hire candidates with similar backgrounds and skill sets. Through this process, Susan and Michael are hired. They have similar certification scores and experience with project funding. They are given a task to find alternative ways to fund a product design to make the product more affordable while maintaining its effectiveness and marketability. However, although Susan and Michael both have high level scores and experience with funding multiple projects, their ability to create an array of solutions to present to the leadership is a struggle. Because they both have similar overlapping skills and backgrounds, they are creating similar solutions, and not necessarily the best solution. There is no diversity bonus.

Case Example #2: Company Alpha has decided to become active in diversifying their teams and reviews the applications with a broader lens of inclusivity. They find the application of Kenya, whose test scores are slightly below company average, yet she has experience with project funding. On closer review, they see each of the projects she managed was backed by significant stakeholder contributions while maintaining the quality and marketability of the products. Kenya comes from a low socioeconomic  background and could not afford the same resources as Susan and Michael. As a result, she possesses an understanding of how to identify and negotiate with stakeholders. In addition, she was excellent at writing and used those skills to compose compelling proposals and obtain further funding resources. By adding Kenya to the team, she offers a new skill set, which will produce diversity bonuses. In this case, the diversity bonus for the team includes composing successful proposals, identifying a broader range of stakeholders, and negotiating significant investments. In addition, Michael and Susan are able to confer test-taking skills to help Kenya increase her scores, which adds another bonus to the company dynamic. This will further attract more high-quality talent.⁴ Hence the power of team diversity.

Equity

Equity is access to resources and opportunities through elimination of obstacles that limit one’s ability to achieve success thro6ugh talent and skills.⁵ In other words, equity levels the playing field so that disparities are not a barrier to achieve a goal. Disparities can occur when qualities and attributes privy to discrimination, such as race, gender, and socioeconomic status, put certain populations at a disadvantage irrespective of their innate ability.⁶ Equity is not the same as equality. Equality is when everyone gets equal resources.⁷ Equity is when everyone gets the resources they need to achieve quality outcomes.^7,8 For example, in Fig. 1, you have 3 people of varying heights, each trying to reach for a cup. Each has the skill to grab the cup but each does not have access to the cup based on their height (an attribute that leads to a disparity). With equality, each is given the same height stool. Although they are all given equal amounts of resources, it may not be enough to overcome certain disparities. However, equity allocates resources so that everyone has access enough to use their arms (skills) to grab the cup (goal).

Fig. 1. Equality vs Equity. (A) Equality—everyone gets equal resources. (B) Equity—access to resources and opportunities to achieve success by eliminating disparities to achieve success.

Of note, it is important to acknowledge the limitation of imagery and definitions of equity because it is easy to assume that the individual needing different resources has personal shortcomings that are a reflection of their innate value. That is certainly not the case. In fact, it is often the system itself that is skewed in a direction that favors one group over another. As a segue from equity, we often hear the term “justice” included in leadership discussions, as an acknowledgement that there are disparities built into system processes that are contributing to these challenges. For leaders, there is a call to address both equity (providing the appropriate resources to an individual to promote their ability to be successful) while also, in parallel, restructuring the processes that may be widening these gaps.

Inclusion

Inclusion involves creating a culture and environment that supports and fosters the talents of individuals through equality fairness, openness, and belonging. 9–11 Inclusion is one of the most important concepts of DEI because it helps to retain the diverse talent that has been recruited and also addresses the desires of belonging that are innate in all humans.⁴ It is impossible to reap diversity bonuses if the recruited talent consistently leaves or is dismissed. For example, residency programs across the United States may inadvertently counteract diversity bonuses when an inclusive culture is not also present.¹² Within the disciplines of surgery, this has led to an unprecedented 12% of underrepresented minorities being dismissed from their positions at a higher rate than their White counterparts (2% White residents dismissed).¹³ In orthopedic surgery, an article published in 2020 found that Black residents make up almost 6% of orthopedic residents, and more than 17% of them were either dismissed or left the field.¹⁴ Residents report that they were terminated or left due to a lack of an inclusive culture filled with bias, discrimination, intolerance for their diversity contribution, and a lack of opportunities for advancement.¹³ The point of diversity is creating an environment of individuals with different experiences, talents, and skills to foster massive success. For that to happen, diverse members of the team need to feel supported, recognized, and validated for their contributions through a culture of respect and belonging.¹⁵ Only then will a team be able to effectively use their full arsenal of skills and abilities to produce diversity bonuses.³

Putting it all together, diversity is the force that creates an environment where people with different backgrounds, skills, and ideas can come together to contribute to the forward movement of an organization. It provides additive “bonuses” that outpace homogenous environments.² Equity grants access for diversity to happen. It levels the playing field by acknowledging and overcoming disparate resources so those with qualifying talent can compete in fair competition.^7,8 Finally, inclusion allows for the retention of diversity and the bonuses it provides, permitting members of our teams to invest in an environment and make significant contributions, thus strengthening an organization’s value.¹⁵

Misconceptions of Diversity, Equity, and Inclusion

Now that there is a better understanding of how leadership can implement DEI, let us review how misconceptions of DEI by leadership can lead to contradictory results.

DEI is not charity work. According to Jill Davis Kone, the VP and marketing manager of global super diversity at JP Morgan Chase, DEI is a business imperative.¹⁶ The United States is a country that has been rapidly diversifying with more demand coming from minority communities. For an institution to guarantee sustainability and longevity, it is important to foster relationships with these communities. Per Kone, DEI is a business imperative because it causes companies to seek individuals with differing perspectives, approaches, and cultural knowledge that leads to better product development and innovations. So, institutions stagnant in their DEI efforts will begin to fall behind due to inability to connect to the community they are targeting. Organizations, particularly in health care, are recognizing the evolution of DEI effort from optional volunteerism to intentional efforts to decrease morbidity and mortality, thus impacting and saving human lives through health equity. Implementation of the principles of DEI by leadership mandates the restructuring of organizational protocols and processes that are antithetical to achievement of an inclusive environment where all can thrive. This is challenging to do but critical to growth and success of teams.

DEI is not favoring one group of people for another. There has been a misconception that the advancement of one group of people means the demotion of another group of people.¹⁷ For example, this is explained by the term “zero-sum game.”¹⁸ According to Norton and Sommers, there have been concerns of “anti-White bias”—better outcomes for Black people will result in worse outcomes for White people, despite the data showing otherwise.^17,18 For example, White households are 13 times more wealthy than Black households with the gap widening despite dedicated programs for minority communities.^19,20 Further, of the practicing orthopedic surgeons, only 1.5% are Black despite increasing access of pipeline programming.¹⁴ DEI is not an “us vs them” approach but rather a unifying force that allows differences between people to be tools that elevate every group of people. DEI does not take away opportunities from a group of people to give another group of people more opportunities. It creates more resources and opens access so everyone can have chances to succeed. DEI does NOT destroy or underhand traditions. DEI equips traditions to survive the changing times, as demonstrated in the example below.

Case Example #3: Medical School “Beta” has a tradition where a legacy student from physician’s families reads the Hippocratic oath at graduation. It is a tradition that has been long-standing since the start of the school. One year, when nominations for this honor were being handed out, it was suggested that the honor include a first-generation student. At first, there was some resistance, especially from the executive level because the change was seen as the destruction of a tradition. In addition, there was fear that certain donors would interpret this change as an honor taken away from their legacy family members. A diverse think-tank of students and faculty was created. This team produced a proposal that explained the importance of the first-generation student. Allowing a first-generation student to share the honor of reading the Hippocratic oath with a legacy student would allow the institution to pay homage to those who started the legacies in the first place. The first-generation doctor experiences unique hardships and breakthroughs that allow for a strong foundation of legacy physician families to be built and maintained. By creating opportunity for a first-generation doctor to share the stage with an established legacy, it allowed for remembrance of contributions within a family while also celebrating new precedents of excellence. Now, at Beta, there is a new tradition of a first generation to represent the beginning of excellence and a legacy to represent the continuance of excellence that read the hypocritic oath at graduation together. DEI adds to tradition and ensures its lasting effect for future generations.

Fostering Diversity, Equity, and Inclusion: a Critical Leadership Tenet

With the understanding of the language and context behind DEI, it is important to recognize these principles as critical leadership tenets for individuals serving in organizational influential roles. Increasing research has studied the effects of DEI on organizations. Commonly reported benefits are increased profitability and production, retaining and attracting talent, increasing innovative capabilities, and elevating reputation.²¹

The Business Case

Profitability/Productivity—A frequent question for many companies, including healthcare systems, is how diversity affects business-driven metrics. Several companies have conducted massive global studies and have found promising results. A study done by McKinsey & Company, that included more than 1000 different coanies across 15 countries, found that the most diverse companies had 25% more likely hood to obtain profits above the industry average compared with less diverse companies.¹⁰ Research from Development Dimensions International found that among 2488 companies across different countries, the ones with increased DEI efforts had leaders that were twice as likely to work together, creating solutions that produced 1.5 times more sustained profitable growth.²² Women in business and management (WBM) found that among 13,000 companies in 70 countries, those that had increased gender diversity experienced 60% higher profitability and productivity.²³

Innovation—Creating an inclusive environment allows for the creation of a safe space in which diverse talent can work together at their full capacity to produce new and innovating products. Per WBM, companies that were active in creating inclusive cultures saw a 59.1% increase in creativity, innovation, and openness. When groups of differing individuals come together, performance is improved through wider variety of skills and perspectives. In addition, due to these differing perspectives, this can create areas of friction and discourse. Practically, this is desirable for encouragement of deeper deliberation and avoidance of groupthink and conformity.²⁴ Studies have shown that when individuals are in homogenous groups, there is an increased tendency to rely on other’s opinions and decisions. There is an innate bias in trusting the judgement of those who have similar identities, as opposed to those who do not, thus the inclination to conform.²⁵ Diversity encourages the discourse that leads to robust solutions.²⁵ This is particularly important in health care when deliberating on diagnosis and best practices. A study found that medical teams of increasing diversity and inclusivity demonstrated an increase in diagnostic accuracy, patient satisfaction, and health care utilization and access. These positive findings were attributed to improvement in doctor–patient communications and relationships.²⁶

Reputation—Reputation is a common top priority for health-care organizations and leaders. It represents the perception of an organization’s mission, ethics, and ability to deliver results.²⁷ Reputation can be a determining factor for recruiting high-quality talent, obtaining needed financial stakeholders, and attracting consumers to use services.²⁷ Implementation of DEI effort is a powerful approach to support enhancing an organization’s reputation. Per WBM, companies with active DEI efforts were able to increase their reputations by at least 60%.²³ Customers perceiving organizations as diverse and inclusive were more likely to use their services.²⁸ In addition, organizations with higher diversity were 37.9% more likely to accurately gauge the interests and demands of their target consumers.²³ Another study found that employees linked an organization’s diversity and inclusion efforts to their degree of ethics and virtue.²⁹ When employees thought that an organization was diverse and inclusive, they saw the company as more ethical and hence reciprocated behaviors that reflected these ethics to fellow coworkers and within their work.²⁹

Talent Retention—An inclusive environment leads to diverse talent being able to use their skills to the best of their abilities because they feel safe and valued.¹⁵ Organizations  with active DEI efforts have been found to attract and retain their recruited talent 59.7% more than organizations with less-active DEI efforts.²³ When DEI is prevalent in executive or management roles, it was found that these inclusive leaders were able to unlock the potential of their teams. A study at Harvard found that organizations with inclusive leaders had employees that reported as 42% more likely to be more engaged at work and without intentions to leave their jobs within a year.³⁰

Although these areas are business-driven outcomes to support embrace of DEI, leaders must also place value, if not higher, on the ethical and moral imperative of creating a culture of respect and belonging for all.

The Fairness Case

Diversity, equity, and inclusion: ethical considerations for leaders

It is no secret that DEI does benefit institutions at the organizational and individual level. For DEI to thrive, ethical considerations must be acknowledged.

Homogeneity—The first ethical consideration brought to light is the unchallenged homogeneity. Across the board, DEI is challenged on every level for its efficacy and ability to profit an organization, yet homogeneity is rarely required to prove itself.³ Homogeneity or “sameness” is the default of society. It provides a “standard,” or something that society can use to determine the value of a person, product, or idea. Often in organizations, the White, male, heterosexual, cis-gender, able-bodied person is the prototype and is rarely asked to prove their value.³ Homogeneity is convenient and comfortable, which is why conformity exists. It is challenging to combat the convenience homogeneity provides because it does not necessarily rock the boat. Studies have shown people are more likely to trust the judgements of those who look like them leading to requiring less deliberation, which is easier than the challenging engagement of diverse opinions and perspectives that can cause a healthy friction that can produce diversity bonuses.^2,24 However, because of the perceived inconvenience of diversity, it often is discussed as an optional part of leadership value.^3,25

Policy and Culture—Currently, barriers to DEI are not routinely addressed in policy or culture. According to the theory of the social-ecologic model for behavioral changes, behavior is influenced by multiple levels from the individual to interpersonal, organizational, community, and policies and laws.³¹ A change at one level may not produce a behavior change and often requires change at multiple levels. Many institutions have policies such as grievance reporting systems that are, in theory, supposed to identify sources of discrimination and prevent them from propagating further. In reality, these systems are often flawed and can actually support heightened discriminatory and noninclusive behaviors. Investigations have found that many grievance procedures filed with the US Equal Employment Opportunity Commission have led to many cases of retaliation against the people who file complaints.^32,33 In addition to retaliation, there is the issue of the extreme anonymity associated with investigations into discrimination in the workplace. Investigations are commonly carried out without anyone knowing about it.³³ Although intending to protect the identity of the victim, there is also required protection of the accused and makes it harder for a pattern of discrimination and noninclusive behavior to be recognized and reported.³³ This often leaves the victim feeling like the accused is not held accountable, leading to talent leaving the institution.³³ In addition, substantial amounts of evidence are required to prove discrimination and noninclusive behaviors. This takes time, leaving victims to weather the storm in harsh environments for extended time periods.³³ It should also be noted that diverse individuals are often the subject of reporting at a rate higher than those who are part of majority groups when exercising the same behavior.

Values and Unaddressed Bias—Important, DEI requires leadership to honestly evaluate their values and face their own implicit biases. When the word “bias” is mentioned, it is often incorrectly associated with extremes such as racism, sexism, and hatred. However, the bias mentioned here are ones that often go unrecognized, for example, stereotyping. Stereotypes are subjective assumptions used to categorize individuals  to quickly understand them.^34,35 One such trouble stereotype is that Black people lack advancement in institutions because they lack work ethic or are lazy.³⁶ This is commonly seen in training environments when minority residents are perceived as “not up for the job.”¹² This can also lead to gaslighting, where diverse residents are scrutinized more severely for mistakes than majority counterparts. This leads to a vicious cycle of closer monitoring, evaluators seeing more mistakes (selection bias), and then an eventual fulfillment of the initial stereotype that diverse residents are not as hardworking or capable as others. In reality, these disparities and lack of fairness in evaluation may result from unchecked biases in leadership.^36,37 Indeed, it is difficult to admit that one may have misjudged a person due to unfounded perceptions of group of people based on attributes that are not objectively true. So, what can leadership do to use DEI to create a culture of respect and belonging in which all can thrive?

How Leadership can Embrace Diversity, Equity, and Inclusion to Make Organizations Competitive and Effective

Recognize That DEI is Challenging—Bringing together a diverse group of people with differing perspectives, skills, and experience can produce friction. It is in these moments of friction that leadership should rely on maintaining a culture of good communication skills such as nonviolent communication (NVC). NVC is a method of communication where a viewpoint is verbally acknowledged by the listener before the listener gives a rebuttal.³⁸ By acknowledging the speaker’s point of view, it allows the speaker to feel valued and heard. This enables the speaker to become an active listener instead of being distracted by thoughts of continuing to make their point. In addition, to good communication, it is also important to recognize that diverse teams will still have failures. Because DEI can be challenging, it is tempting to make easier conclusions that diversity does not work instead of exploring the possibilities of other important pitfalls such as implicit biases, suboptimal leadership teams, and malaigned strategy and inadequate execution.³

Be Consistent in Everyday Actions—Celebrating big holidays or having special diversity events are well intended actions to support DEI efforts. However, showing those commitments consistently in everyday activities can be more impactful than intermittent grand gestures.³⁹ For example, knowing the names of team members and pronouncing them correctly yields significant increases in inclusion.³⁹ A name is an identity and taking time to consistently do this simple gesture shows inclusive leadership through valuing one’s identity and culture. Another small gesture is to take time to understand other background and lived experiences, and find ways to integrate them into the work culture.³⁹ This can take the form of asking thoughtful questions over coffee, making sure team social events are inclusive, and allowing employees time for wellness.

Seek Feedback—Improvement is made through awareness and collecting data. Leaders should ask for honest feedback from team members about how they are doing as an inclusive leader. By humbly seeking feedback, leadership sets an example that despite their own beliefs, expertise, and experience, their goal is to allow a space for alternative views to be presented.² Health care is a dynamic industry, and one has to be flexible, humble, and be willing to learn new things, as well as have a willingness to be wrong.³⁹

Promote DEI Properly and Recognize its Value—In many institutions, health-care executive teams are homogenous. A survey from the Center for Talent Innovation found that most men with leadership positions reported that they did not have time to be involved in DEI efforts. This points to an unfortunate reality that institutions still perceive DEI as “optional” instead of essential to their success. A way to reverse this is to promote DEI in a way that helps leaders to see that these values are contributing to their goals, instead of taking time away from achieving them.^4,40 This can be presented as incentives to inclusive practices, such as more weight given to creating an inclusive culture on performance reviews, linking value to the recruitment and retention of diverse talent, and presenting current data of the benefit of more diverse teams, which can increase motivation to be part of the change.⁴⁰

Leadership Development Programs—DEI efforts among leadership may be stagnant due to knowledge gaps surrounding of how to be an inclusive leader. As a part of DEI efforts, institutions should include leadership development as an integral part of creating an inclusive culture.⁴⁰ There are several resources and groups available to help facilitate availability of these opportunities. For example, the Orthopaedic Diversity Leadership Consortium (ODLC) serves as a network of orthopedic diversity leaders whose mission is to optimize the effectiveness and sustainability of diversity efforts by sharing best practices and innovative strategies for success.⁴¹ Organizations such as ODLC have provided resources for developing DEI leadership skills, including workshops, coaching services, and online certificate classes linked to prominent institutions. Instruction on the pearls of effective leadership domains, combined with an understanding of the fundamentals of DEI, has produced a very powerful set of skills for leaders to drive organizational change.

In conclusion, DEI is a powerful tool and each of its components is of great value to the advancement of an institution, especially in health care. With the increasing diversity of our population—humans in need of equitable health care, fair and just work environments, and inclusive learning experiences—DEI becomes a business and fairness imperative. It is critical for health-care leaders to recruit and nurture the diverse talent needed to produce the organizational while building and maintaining important relationships within the communities we all serve.

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