Several weeks ago, I participated in a panel discussing diversity in the workplace. The title of the panel was “Diversity and Innovation,” but the real topic was “Why are we still having this conversation, and why haven’t we made progress?” It’s an important question for the future of American business, and it’s an area in which I believe many leaders should be taking a more active role.

Diversity has been a hot topic for three decades, yet the numbers are still appalling. Minorities—meaning African-Americans, Asians, and Latinos combined—comprise only 4 percent of Fortune 500 CEOs. Women make up only 4.8 percent. Similar disparities can be found down the corporate ladder and across all sizes of companies. At the same time, numerous studies have demonstrated that diversity increases innovation; so most companies are putting themselves at a strategic disadvantage.

I believe the diversity problem persists for three reasons: 1) We are dealing with a problem that is often unconscious, making it harder to address; 2) fostering diversity requires more sophisticated leadership skills; and 3) most companies haven’t yet made the necessary commitment.

Unconscious Bias Rather Than Overt Discrimination

For the most part, overt discrimination in the workplace has become rare. However, we now have a problem that is actually harder to solve—“unconscious bias.” One interesting study that illustrates the problem examined employers’ willingness
to interview job candidates based
on perceived race. The study took identical resumes and substituted white-sounding names (such as Emily and John) with stereotypically African-American names (such as Lakisha and Jamal). The resumes with white-sounding names received 50 percent more interview callbacks. A similar study on gender bias in
the sciences demonstrated that changing the name on a resume from John to Jennifer caused reviewers to rate the candidate as less qualified and to recommend a 14 percent lower salary. Other studies show a similar dynamic with performance appraisals and promotions, and
they reveal how very subtle discriminatory behaviors (sometimes called “microaggressions”) produce unwelcoming work environments.

One major driver of unconscious bias is what psychologists call “schemas”—unconscious shortcuts all humans use to organize complex ideas. Schemas make daily life possible because, for example, they allow us to form a generalization of what a cat looks like and thereby recognize a different kind of cat. However, when applied to people, schemas often lead to bias – for instance, when unfavorable media representations of women or minorities lead to prejudice.

Although schemas can be difficult to break, understanding our prejudices is an important first step, and all humans have prejudices. Harvard University has an excellent free online tool that can help people identify their internal prejudices – the Implicit Attribution Test.

Complex Leadership Skills

In order to foster diverse work environments, leaders need a combination of skills that include self- awareness of their own biases, the commitment to set standards, and the ability to skillfully manage conflict. The self-awareness to identify their own unconscious biases, combined with the willingness to challenge those biases, provides the foundation to lead by example. I know a male CEO who has made a significant commitment to understanding and combating his own unconscious biases. When he witnessed a male employee looking a female employee up and down during a conversation, he quietly pulled the male employee aside and said, “You don’t look at me like that when we’re talking; why would you look at her like that?” This sent a clear message about how he expects women to be treated at his company.

Diversity vs. Inclusivity and Creative Abrasion

Leaders also need to understand the difference between diversity and inclusivity. Diversity
is simply having different types of people, and it’s often simply a “check- the-box” activity. Inclusivity means valuing different types of people specifically because of the different perspectives that they bring, and it involves leveraging those perspectives in order to drive innovation.

Inclusivity can also trigger “creative abrasion” – increases in conflict
from bringing different perspectives together. That is a natural part of the creative process. To be effective leaders must make sure conflict stays productive so that it drives creativity rather than destructive behavior.

Stepping Up To The Challenge

Addressing diversity and inclusivity requires a deeper commitment than most companies have made. Many simply require a few legally-focused diversity trainings, but that is often ineffective and is sometimes even harmful. Recent research suggests that mandatory diversity training that emphasizes legal risk, and that fails to demonstrate senior leadership commitment to diversity, often backfires. It generates a perception that the company is just checking a box to protect itself.

A more effective approach is to actually make diversity training optional but to also have very visible senior leader participation. For example, if the CEO or other senior leaders attend all diversity trainings and actively participate, that sends a very clear message. Sometimes companies complain that diversity training isn’t important enough to warrant senior leadership time—that of course, sends a very clear message that the company isn’t fully committed to diversity.

Another effective approach is to establish diversity committees (that include senior leaders) in order to develop strategies and set measurable goals – just as you would for any other business activity. Most importantly, companies need to recognize that diversity and inclusivity are long- term goals that require an ongoing commitment.

The Majority of US Citizens Will Be Minorities by 2040

Population trends show that the majority
of US citizens will be minorities by 2040, and we are already 51 percent female. If we fail to address the diversity challenge, especially
at the most senior levels, we will have a situation where companies do not reflect the majority of their customers. We know the problem is already stifling innovation and business growth.

In order to build innovative companies, and companies that are prepared for the future, business leaders need to step up to the challenge of building diverse and inclusive corporate cultures, and to insure that diversity and inclusion are reflected up through all levels of their organizations.