Diversity and inclusion definitions business leaders should know

While research shows diversity and inclusion (D&I) is good for business, each study uses a different definition of the terms involved. A simple Google search, for example, nets thousands of explanations for key terms like diversity, inclusion, belonging, and unconscious bias.

While there may be no “real” definition, there are mental frameworks business leaders can apply to these complex terms, making them easier to understand in a business context.

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Diversity: The knowledge of difference

In the workplace, diversity is an umbrella term for the different pieces of each person’s identity. Colloquially, this is “the different answers you get to the same questions, depending on who you ask.”

Different answers come from each person’s perspectives, stemming from:

  • Their background

  • Their upbringing

  • Their socioeconomic status

  • How they experienced the world

  • How the world perceived them due to stereotypes about their identity (positive or negative)

  • Their education

  • And a wide variety of other factors influencing their lives

In a business context, D&I is attributed to measurable success through increased innovation, easier time entering new markets, and the creation of more user-attuned products and services. Some companies do this well; others may have a D&I problem.   

Some definitions of diversity extend to action, specifically acknowledging difference and supporting it. On the other hand, others view diversity as a negative term, used as a buzzword for corporate marketing. However, these instances usually indicate a company paid attention to the definition of diversity but didn’t look at inclusion or belonging.

Inclusion: Building an environment for difference to thrive

Typically known as “a more active concept than diversity,” inclusion means building environments where all people are respected and can participate.

In the business world, building inclusive environments takes many forms:

Further, some say inclusion is the antidote to exclusion. So if your organization is having trouble getting started with inclusion, ask employees where they feel excluded and fix what you can.

Belonging: Welcoming people into the environment

Stemming from deep psychological needs, belonging is the human feeling of being welcome in, or part of, a group. In the business world, this is both at the whole-company level and the team or department level. When belonging is present in an inclusive environment, each person looks out for one another.

Belonging is about deep connections, being able to be vulnerable, and feeling supported by the group one is in. To increase belonging in your organization, think about how people may feel excluded and work to offer psychological safety signals. This could mean making one-on-ones more inclusive, creating more inclusive events, or ensuring that D&I executive sponsors are the best they can be.


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Unconscious bias: Inadvertently harming or privileging people due to stereotypes

Unconscious bias is action towards someone based on a stereotype or non-fact-based assumption. This could be either positive or negative, but the key is that it’s not based in fact.

Humans go through life making mental shortcuts to understand the world around them. There’s nothing inherently bad about this process - it helps us process massive amounts of data efficiently. The challenge becomes when incorrect assumptions or stereotypes due to “mental shortcuts” become the basis of how we treat people. This is where unconscious bias creeps in.

Giving someone a promotion because they performed duties well is not a problem. Giving someone a promotion because you “see yourself in them” with no performance justification is a problem. So is withholding growth tasks from someone else because you think they “look lazy,” with no evidence to back up the claim.

Stereotypes and assumptions are often based on easily recognizable or identifiable aspects of a person. When unconscious bias is the reason behind one person’s promotion over another, the working world loses out because the decision was not based on fact or performance.

There are many organizations fighting unconscious bias and advocating for inclusion, making learning about this issue and finding unique ways to handle it very easy.

Tying the system together

Diversity is the fact of difference and inclusion is the environment in which difference can thrive. Belonging then adds the people element, inviting and welcoming people into the environment. Unconscious bias is a hidden danger, something to be acknowledged, brought up, and continually challenged.

No environment is perfect. So the goal of D&I is not perfection, but betterment. Creating better versions over time, inclusive environments thrive because of the uniqueness people bring to the table. The end result is stronger, more resilient, and more innovative organizations.


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Stefan Palios