Three proven steps for implementing inclusive decision-making to improve your business

Better decision-making is the key to organisational performance. Decisions made wisely drive profit, reduce risk, decrease costs, and create sustainable business models. And poor decisions have the opposite effect — driving down share values, creating reputational damage, and losing customer and stakeholder support.

But many business leaders are misguided in their attempts to increase decision performance. They focus on getting access to more data, putting in place stricter governance, and having more meetings (yikes!) when they should pay attention to something they already have right at their fingertips.

Their people, and more specifically, the diversity of their workforce.

Diversity refers to the mix of people in an organisation and considers all the ways in which they differ including background, gender, ethnicity, age, culture, and ability. While it is illegal for Australian companies to discriminate based on these factors, that doesn’t mean that diversity is being leveraged in meaningful ways that positively impact company performance. Decision-making is a key example where there is ample opportunity to make better use of diversity.

Why decision-making?

Academic studies have long demonstrated the beneficial impact of diversity in decision-making.

In 2017, Forbes published research demonstrating that decisions that leverage diversity deliver better results at least 85% of the time, with half the meetings.

That means better and faster decisions.

When it is estimated that executives spend almost half their time making decisions, any opportunity for greater efficiency and better results is sure to drive company performance.

And if that isn’t enough to convince leaders to embrace group participation, new research by Decision Revolution shows that inclusive decision-making impacts the elusive triple bottom line of people, profits and planet.

Companies that demonstrate inclusive decision-making achieve better individual performance, lower rates of attrition, and outcomes that are better off overall for stakeholders.

Key findings from the study, which canvassed the experiences of 50 individuals from diverse backgrounds in team decision-making, include:

• Five out of six people were more likely to stay in a job where they can contribute to decision-making;
• Over 85% of respondents said they perform better at work when they can participate in decision-making;
• Almost 90% agreed they are more motivated when they have contributed to decisions;
• Over a third of respondents wanted greater involvement in decision-making;
• Almost a third reported having to stop themselves from offering a view that might be unpopular;
• 42% had to adjust their style to fit in with the team; and
• 18% felt their skills and experience were underutilised in team decision-making.

What does this mean for employers?

In a world where the labour market is so tight and the cost of recruitment is skyrocketing, the opportunity to hold on to valuable employees must be right at the top of any leader’s list.

Additionally, if driving company performance is important to your leadership team, then you can’t ignore the fact that excluding people from decision-making means they will be underperforming, which will undoubtedly have an impact on organisational outcomes.

Finally, it is not enough to have diverse representation across your workforce, it must be harnessed in practical and meaningful ways to derive the benefits of diversity in decision-making — which include making more sustainable and better value-based decisions.

All this boils down to one key fact: companies that limit staff participation in decision-making or stifle their contributions are at higher risk of underperformance and staff walking out.

Take action

So, what can leaders do to promote diversity and inclusion in their organisational decision-making? Here are three steps every leader can take that require minimal time and cost to implement.

Steps to follow

1. Plan for diverse inputs and make it clear these are welcomed

   Don’t just wait for diversity to show up — design decision processes and systems that actively identify the ways in which people are invited to contribute. Find out the participation preferences of the people you want to invite, and make sure to accommodate their needs. It won’t work if people who contribute new ideas and diverse thinking feel like they are putting a burden on the program.

2. Place value on diversity, not only subject matter expertise

   Seek out participants to contribute to decision-making based on their diverse perspectives, rather than the position they hold in the company. This doesn’t mean excluding the experts or taking away the decision responsibilities of the respective leaders. But it does mean acknowledging they don’t have all the answers! Even in highly technical decision-making, it is valuable to get contributions from people outside that field of expertise as they often aren’t tied to the same sense of constraints and understanding of ‘the way things are always done’.

3. Make the conversation about performance and organisational outcomes

   Rather than focusing on your company’s diversity and inclusion goals, make it clear that bringing more diversity into decision-making is about deliberately pushing for higher levels of company performance. This empowers people to contribute specifically to decision-making as a factor of performance and makes it clear that this is not about having ‘token’ participants in a decision process.

Companies that successfully engage their workforce in decisions across all levels of the organisation have everything to gain, and nothing to lose. So, invite more diversity into your company decision-making and enjoy higher performance, lower attrition and better organisational outcomes.