By J. Yo Jud Cheng and Boris Groysberg | Harvard Business Review | June 18, 2021
The killing of George Floyd catalyzed a reckoning around racial injustice that led many corporate leaders to seek to evolve their organizations to meet today’s tremendous societal challenges. Many U.S. organizations have publicly pledged to increase diversity by filling more executive positions with individuals from underrepresented groups. Some boards of directors, like Nike, Starbucks, and Uber have gone further, tying executive compensation to diversity goals.
While it is still too soon to know the effects of these policies, we do know from prior research and our own experience that financial incentives can be effective in changing behavior in the short term. But will these policies create sustainable and long-lasting organizational change?
Alongside these formalized change mechanisms, we think it is just as important for leaders to turn their attention toward an informal lever for organizational change: culture. We asked more than 19,000 HBR readers to rate the diversity and inclusivity of their organizations and to rank their organizations’ central cultural attributes.