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Risk assessment is an important element in running a business. As entrepreneurs and entrepreneurs, we want to keep the risk as low as possible to ensure that our business can continue to grow, benefit and influence the world – especially in these uncertain times.
If we look at intentional work with Diversity, Equity and Inclusion (DEI), we can actually use DEI to directly influence the risk management ability. Many people consider DEI “nice to have” that supports moral and social awareness in companies. In reality, however, it is a powerful and crucial way to mitigate risk in the marketplace, especially by taking into account reputational bias, process bias, use of reviews and audits, and ongoing DEI strategic learning and development experiences.
1. Reputation bias
Failure to address DEI issues directly, or deliberately addressing them, can put reputation factors at risk. This is especially true in the current political, business and social environment. We have seen over the past few months how not addressing DEI or publicly sharing your thoughts on inequalities in society can affect the public's perception and bottom line of a company.
From a different perspective, small businesses – and especially small women or minority-owned companies – need to be very lean. This means that there may not be large sophisticated systems or processes in place. One benefit of this is that although you are smaller, you don't have to work and think like a small business. We can mitigate risk in a number of ways.
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When companies are new, branding and trying to grow, a reputation for product credibility and quality service is required.
If you make a mistake on DEI from a consumer perspective, people can really criticize and question a company's efforts. Brands can miss the mark by not doing their homework to realize that something was offensive or tasteless.
Sometimes there is the idea that people only pay attention to “big box” brands or companies. However, this also applies to small businesses that may not have an equity history in their brand. The last thing you want is for something to happen because you simply didn't look through a DEI lens and you have ventured into an area that is extremely offensive or harmful to the brand.
From another point of view, it is difficult to find good talent right now. Talented employees have a choice of employers, and everyone wants to work for a brand that has a reputation for being fair, inclusive and practicing what it preaches.
The bottom line is that many companies and organizations join DEI for reasons of character. You want to be on the right side of the conversation. This not only creates value for humanity, but also creates business and reputational value.
2. Systems and processes
To search for DEI, systems, procedures, guidelines, and culture must be considered. Another way to identify business risk is to identify process bias. We're so used to looking for "people bias" that we don't often talk about "process bias".
Many different business processes – how you have employees on board, how you secure suppliers, how you hire or how you market – can be operated through a lens from DEI.
Take the time to review your processes and determine where you may be falling short on DEI.
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For example, I have noticed that the recruiting process is often biased. Some companies find it sufficient to simply post the job posting on their website or on some job posting sites such as Indeed or Monster. And their idea is that they are now releasing it for fair public consumption.
There is actually a trend in this regard. It takes a lot more deliberate effort and strategic planning to create a diverse range of candidates. You must have taken the time to partner with a variety of organizations, leaders, and communities that have access to underserved and underrepresented populations.
You want to make sure that whatever the process in your company, the lens is guided by DEI considerations. It would be wise to have a checklist of the key considerations as you think about your various processes, such as:
Does this solve throwing a wide web and making sure we can meet different constituents?
Do we have accountability measures even before we take this position?
Are we sure that our hiring managers have taken due care to create a diverse pool of applicants?
Does this process validate justice and resolve unconscious prejudices?
By assessing the process distortion, we can better identify and fix problems and thus better integrate DEI practices.
3. Use of ratings and audits
Beyond processes, leveraging reviews and audits in your company or organization can help you identify and make course corrections where you may have risky DEI behaviors in your company.
You can conduct these assessments in a number of ways. They can include employee surveys, residency interviews or one-on-one interviews with various managers or employees in your company. You want to collect certain data on employee satisfaction and then use it to plan strategic decisions.
An important element, also in the world of startups, are the residency interviews. People often do “exit interviews” when they leave. But why not include residency interviews to make sure people are supported as they stay at your company – to make sure you feel like you belong to your culture?
For residency interviews you can ask:
What makes you work here?
What is your concern with our culture?
Do people feel mentally safe?
Are there any special accommodations you think are necessary?
In your opinion, what could we do differently so that you can achieve your goals and work at a higher level?
What do you look forward to when you come back every day?
What would you change in your job?
What would make your job more satisfying?
Which talents would you like to use in your current role?
What can I do to best support you?
Do you feel seen and supported as an individual?
If your culture or environment is not where people are willing to be vulnerable and share some of their challenges, it can create problems for both employee productivity and wellbeing, as well as the connection with the company.
For example, if an employee takes special precautions, e.g. For example, an invisible disability or a portrayal challenge – possibly a parent of a child with special needs who needs many visits to the doctor – some people do not want to share this with their team or employer because they fear that the employer might not be obliged.
We want to create cultures and environments where people can be at their best and feel authentic. When people mask parts of who they are, they don't appear as their whole selves.
Asking questions like these routinely can create a more inclusive culture and experience for team members. And when problems arise, they can also be addressed and fixed. The aim is to open up communication for people to share what their needs are, what potential barriers there are, and how best to be supported so that leaders can try to meet those needs.
4. Ongoing strategic DEI learning and development experiences
If we can continue to provide strategic learning and development opportunities, people can understand the constructs and purpose of DEI. This, in turn, can reduce the risk of perceptions, reputations, and general business practices that are not inclusive.
It is advisable to develop a multicultural engagement strategy. Without a multicultural engagement strategy, you will not have a growth strategy. People will have a greater tendency to apply mindsets, knowledge and skills to work in the organization when they feel seen, heard and valued.
Through continuous learning and development, we can then combine the responsibility factor. It is not enough just to say "Here are the DEI expectations" if you do not enforce them. Through some form of ongoing accountability – when you talk about training, awareness and awareness – you can actually ensure that those actions and ideas are carried out.
Ongoing learning and development experiences also support your infrastructure. The infrastructure is a big part of DEI's work. Part of managing business risk is thinking carefully and deliberately about the types of actions you can take to build the right infrastructure in your organization.
Don't just take your product manager and say, "Hey, can you give DEI some attention?" Make sure you have the right resources and framework to be successful with DEI – whether you hire a consultant or a coach. Don't just assume that, as a smart entrepreneur, you know how to strategically integrate DEI into company culture.
You need the right human capital, the right financial capital, and the right infrastructure.
DEI is good for business
America is changing its face. We will soon no longer have a racial majority. If people cannot currently find ways to attract and target a multicultural audience, they will run out of workforce in the future. DEI is a strategic asset and we must consider it appropriate to develop a multicultural strategy as part of the growth strategy.
This means developing systems, processes and practices wherever you develop a culture in which these multicultural people feel they belong.
Nowadays it is a business risk NOT to navigate your company through a lens from DEI. You want to make sure that you implement the processes, procedures, reviews, and infrastructure to ensure that you are facing a diverse and multicultural marketplace. In return, you reduce the risk and increase success in the years to come.
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