Measuring Inclusion: A Conversation with Silke Muenster and Alexander Fleischmann

Research shows it’s not so simple.

How do we really know if our workplace values inclusion? Leaders and employees both question inclusion in the workplace, and it’s a topic that’s been studied for years. Many companies have released inclusion indices and shown different ways for measuring inclusion, but there’s never been a concrete, benchmarked way to measure inclusion in the workplace. Inclusive Future, the yearlong study on measuring DE&I in the workplace sponsored by Philip Morris International (PMI), has completed its first of three phases of research. We talked with Silke Muenster, Chief Diversity Officer at PMI, and Alexander Fleischmann, the lead researcher for the Inclusive Future project and member of the Equity, Inclusion, and Diversity department at IMD Business School, about the latest findings from Phase 1 of Inclusive Future and what the research is showing so far on measuring inclusion in the workplace.

We’re eager to learn more about the findings from Inclusive Future. Before we dive into the findings so far, can you remind us of your goals for this year-long research study?

For this study — which is still ongoing — we have broken the topic into three sections. Phase 1 is complete; it focused on the definition of inclusion, what inclusive leadership means today, and what approaches are already out there that measure inclusion. Phase 2, which is close to being complete, inquires whether these approaches to defining and measuring inclusion are still relevant in light of the tremendous changes we are facing today. Social movements like #MeToo and Black Lives Matter, rising economic inequalities, and disruptive changes due to the COVID-19 pandemic have no doubt played a role in how inclusion is being measured, and additional drivers like the technological transformation, Gen Z entering the labor market, and Millennials becoming managers have definitely transformed the workplace. Phase 3 focuses on how to build an inclusive future against this backdrop. What approaches are needed? How are we going to measure inclusion in the future? And how do we measure to create an inclusive future?

What does inclusive leadership look like at each level (the individual (I)), the relational level of teams, and the organizational one?

At the individual level, inclusive leadership means to be both humble and courageous. Leaders have to be able to listen and be humble enough to commit mistakes, while realizing that they do not know everything. But, at the same time, it often takes courage to call out inequities and microaggressions, which is a very important aspect of inclusive leadership. It’s also important to educate oneself and be aware of differences, privilege, and bias.

At the team level, inclusive listening includes being able to listen to others while also being empathetic and curious. And at the organizational level, it’s crucial to set the stage for an inclusive culture, which involves creating the conditions to exchange different views. This is crucial to create team cultures that have psychological safety. Simultaneously, organizations have to set rules that show discriminatory and exclusionary behavior is not tolerated.

All in all, creating an inclusive culture calls for a clear commitment from top management as well as making inclusion a shared responsibility of every employee.

At PMI, we made tremendous progress this year with regards to female representation, especially in senior roles. We currently have more than 40% more females in leadership roles than 18 months ago, and this is clearly driven by our leaders who took the challenge.

Silke and Alexander, when talking about inclusion as belongingness and authenticity, how do we measure this, and why is it important to view inclusion through this lens?

Belongingness and authenticity reflect two seemingly contradictory individual needs: the need to be a part of a collective and relate to others, and the need to be oneself — to be authentic and have autonomy. These two elements are key because they target crucial aspects of inclusion and diversity: employees should feel part of a team and the organization while thriving at work, and they should be able to be their authentic selves. These two facets are also important for inclusive leadership and creating an inclusive future. Companies often focus on creating team spirit and a coherent organizational culture, but sometimes the value of authenticity gets lost. External hires should bring in new ideas, new spirit, and new values, but sometimes, once they are inside the company, they’re rewarded for the complete opposite.  They are rewarded for conforming.

Alexander, in your research so far what method(s) have proven most successful when measuring inclusion in the workplace? After researching and comparing several different methods of measuring inclusion, did you notice any common shortcomings across the board?

The biggest shortcoming at first sight is that there is no common way to define inclusion and, accordingly, no common way to measure it. Looking at current definitions, inclusion can be seen as composed of seven components: belongingness, authenticity and uniqueness as personal aspects, fairness and participation as organizational parts, and psychological safety as the linchpin between the two. Moreover, diversity is key to inclusion as people from all walks of life should feel included.

The standard approach to measure inclusion that many corporations take is to ask their employees about it in annual surveys. They use five to eight questions that relate to different dimensions of inclusion which makes benchmarking across companies virtually impossible. Some companies, like BP, focus their questions on inclusive leadership, on how the company and managers are able to create an inclusive culture. Others, like Microsoft, have questions that target belonging, authenticity, and psychological safety. Both have in the end an “inclusion index,” but from a conceptual perspective, they are measuring different things.

In the end, however, whether an inclusion index is successful or not can only be judged by the impact it has on changing exclusionary cultures and behavior. So, a customized approach might actually be more useful than having a standardized tool that allows benchmarking. For the companies that publish their index, most report annual changes of 1 to 2 percentage points and their overall figures are around 80%. So there’s still room for improvement.

Another problem with annual surveys is that you measure the perception of employees at one point in time. After an encouraging meeting with your boss, your feeling of belongingness might be higher than after a conflictual situation. Some companies, like BP, are changing to more frequent pulse surveys, and Microsoft is using the data created by their own software products to measure how employees interact.

Alex, what is psychological safety and how should psychological safety be measured?

Amy Edmondson, who coined the term, sees psychological safety as a “shared belief that the team is safe for interpersonal risk taking.” One could say that psychological safety interlinks the two aspects discussed earlier: belonging and authenticity. Psychological safety describes an environment in which an individual can express oneself without the fear of negative consequences. This means that one trusts that the environment is safe, one trusts that one can be authentic, and that one can bring up difficult or troublesome issues, such as talking about mistakes or discrimination and harassment.

Edmondson developed seven questions to measure psychological safety. The questions explore if making mistakes is held against a team member, if one can bring up tough issues, and if one’s unique skills are valued. This scale is validated and has been used in studies around the world.

Silke, how can leaders/organizations foster a positive perception of psychological safety?

The concept of psychological safety resonates easily with employees and leaders, given its proven linkage to team effectiveness. There is also a strong link to wellbeing, a topic which grows in importance these days. Our latest research shows that people who can discuss their boundaries with their managers have better psychological wellbeing, are more energized, and more engaged. On an individual level, leaders can support this by showing vulnerability and talking about mistakes they personally have made. Being humble and recognizing that you don’t have all the answers are characteristics we have defined as part of our leadership model, and people get evaluated against this model.

Alex, what do the next few months look like for you in terms of the Inclusive Future project? What will you be focusing on?

Phase 2 is currently in its finalization. Looking at the social movements and their calls for justice implies that fairness as part of inclusion should be emphasized. We also need to take uniqueness into account while remaining aware that unique intersectional experiences are embedded in broader social structures. External stakeholders and newer generations call for an inclusive culture from A to Z. COVID-19 and the disruptions of work life call for a recalibration of inclusion in terms of hybrid work. So, the focus of the upcoming months will be to explore tools to implement this and how inclusion can be measured reliably in this new socio-political context.

Silke, what would you say is your biggest learning so far from the Inclusive Future project?

Confirmation that there is currently no gold standard in measuring inclusion. Complexity in defining inclusion became very clear, resulting in difficulty to measure. Originally, the idea was to find a way of measuring which would allow benchmarking, but what we might get as a result is that measuring needs to focus on the specific focus and the individual situation of an organization.