By Dion Hulleman, The Next Organization
Nowadays, the attention to diversity and inclusivity in society is increasing. Organisations aim to offer an inclusive and diverse working environment and governments aim to foster a multi-diverse society. The demand to involve people with different backgrounds, for example, different education level or nationality, is increasing. Those people can work as employees of organisations or used as new target groups of organisations, and this will support organisations and governments to decrease the inequality in the society. We call this inclusivity.
Inclusivity will foster possibilities of creating diversity at organisations and it is helpful to create a culture where everybody can behave like they like to behave. In the end, this is improving the decisions of the organisation and it is improving the mood of the employees. Besides this, inclusivity fosters the societal output of organisations and support organisations to involve more stakeholders in the organisation’s goals and output. Some of those advantages (e.g. involvement of more stakeholders and better mood of employees) help to improve the efficiency of the organisation, which will finally lead to better results.
The question is: Which elements are important for organisations to implement a more diverse and inclusive organisational strategy? In this article, The Next Organisation describes some conclusions of their exhaustive research about the most important elements of inclusivity.
Definition of inclusivity
Inclusive business can be defined as changing the inequality in the business environment to an emerging business without inequality. This supports an organisation or government to use its expertise and resources more efficient and effective to reach the goals of the organisation and/or the goals of the society. During the research, the Next Organization concluded that much research about inclusivity is conducted in Third World countries. In Third World countries, markets, organisations and governments try to tackle the social-economic problems and include low-income groups in their business. The focus in third world countries is on people who are living at the Bottom of the Pyramid (BoP). Those people are missing the most important needs of life in general (e.g., health and education). Besides the importance of inclusivity in the Third World, involvement of inclusivity in the Western world is also important. Taking for instance poverty problems into account, in 2019, 21,1% of the population of the European Union (about 92.4 million people) were at risk of poverty or social exclusion. Involving inclusivity in the strategy of organisations is helpful to decrease this percentage.
Involvement of inclusivity in the strategy
According to the study of The Next Organization, involving inclusivity in the strategy will bring benefits for organisations (e.g., more opportunities around the involvement of stakeholders). It is possible to divide the most important elements of inclusivity into three layers: the economic layer, the environmental lifecycle layer, and the social stakeholder layer. Especially the elements in the social stakeholder layer are applicable to decrease inequality. To implement those elements in the new strategy, organisations can evaluate their current situation and improve this situation to a more ‘inclusive organisation’. The elements: stakeholders/end-users, intermediaries, collaboration/participation, customers, socio-economic and institutional context, and Bottom of the Pyramid (BoP) are the elements of the social stakeholder layer.
Elements of inclusivity
The most important elements in the new strategy are the elements in the social stakeholder layer. Implementing those elements in the new strategy are helpful for organisations to evaluate their current situation and improve this situation to a more ‘inclusive organisation’.
In the element, organisations determine the value impact of the stakeholder on society. Furthermore, they describe the already existing incumbents and the target groups of possible new entrants. Besides this, they assess the opportunities, benefits and threats of already existing incumbents and new entrants to determine which stakeholders are helping to foster the inclusivity of the organisation.
Intermediaries, like banks, hardware stores and governments, are helpful to overcome cultural and institutional gaps. It is necessary to select the right intermediaries and describe the roles and responsibilities per intermediary. This helps to better understand the contribution to inclusive innovation processes, efficiency, and effectiveness.
With the collaboration/participation element, organisations participate in certain projects and collaborate with other organisations. The participants share skills, knowledge, and assets, which foster each other’s opportunities. In the strategy, organisations select complementary partners, who can share best practices.
Of course, customers are essential for organisations. When organisations implement inclusivity in their strategy, their customer base changes. It is important to describe in the strategy how the organisation tries to keep individuals in mind. In addition, specific segmentation helps to reach more specific groups of people living in unequal situations. Furthermore, it is important to determine the customer values, confidence, and channels, to meet the needs of those people and reach specific groups of people living in unequal circumstances.
Socio-economic and institutional context
One of the most essential elements is the socio-economic and institutional context. To determine which customers and stakeholders an organisation reach, it is important to describe how they identify and integrate ‘fringe stakeholders’ (groups with e.g., social exclusion). In this part, organisations describe the interaction between the business model and the business ecosystem. Furthermore, describing the ‘social mission’ of the business model is a key topic of this element.
Bottom of the Pyramid
An organisation needs to determine the Bottom of the Pyramid of the society in which they are operating. This helps the organisation to decide which people they must reach to improve the circumstances of society. There are two possibilities: native pull (companies are built around given BoP conditions) or native push (some lifestyle changes for consumers to thrive and grow). The native push possibilities are only possible after the pull possibilities.
In conclusion, adding inclusiveness to the organisation’s strategy supports organisations in improving the inclusiveness of the organisation. This leads to a change from inequality in the business environment to a more equal business environment, leading to more efficient and effective use of expertise and resources for your organisation, as well as for society. Efficient and effective use of expertise and resources will be achieved because of more collaboration and participation with other organisations/governments. This helps to save time and money for your organisation. In addition, it helps your organisation reach out to more stakeholders, potentially leading to more diverse revenue streams. Finally, it improves your organisation’s social output, which helps to improve the organisation’s image.