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Diversity, Equity, and Inclusion

It’s time for leaders to nurture inclusion by reinforcing values and creating psychological safety

Published July 11, 2025 in Diversity, Equity, and Inclusion • 7 min read

While some organizations retreat from inclusion commitments under political pressure, the path to lasting transformation lies in embedding diversity deeply within core values rather than treating it as a compliance issue. Leaders must model vulnerability and foster psychologically safe spaces where all voices can contribute.

The conversation around diversity and inclusion has reached a critical phase. While some organizations retreat from their commitments under political pressure, research shows that the most successful companies are doubling down on inclusion as a core business strategy as opposed to a compliance exercise. The key lies in understanding that diversity and inclusion must be approached as a fundamental mindset shift, not merely a set of policies to implement and comply with.

Experience shows that organizations achieve lasting transformation when they move beyond superficial initiatives to embed inclusion deeply within their core values. Companies like Salesforce exemplify this approach, with equality written into their organizational DNA as a core value. This translates into tangible behaviors such as openness, curiosity, and non-judgmental dialogue that create the foundation for meaningful inclusion.

The most effective approach begins with organizations conducting a thorough examination of their core values and translating these into observable behaviors. This means moving beyond mission statements to create what can be termed a “true north” – a guiding force that creates genuine human connection across all levels of the organization. When diversity and inclusion emerge naturally from deeply held values and not just external mandates, it becomes sustainable and authentic.

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Creating psychologically safe spaces requires moving beyond traditional diversity categories or "boxes" that can inadvertently reinforce divisions

Role-modeling and creating psychologically safe spaces

Leadership behavior – the ability of bosses to ‘walk the talk’ – serves as the cornerstone of successful inclusion. Research demonstrates that top management must not only articulate values, but actively embody them through their daily interactions. Microsoft’s transformation under Satya Nadella provides a compelling example of this principle in action. Before Nadella became CEO, Microsoft was characterized as having an extremely competitive, “know-it-all” culture. Employees succeeded by showcasing their own individual achievements and how their accomplishments exceeded their peers. Nadella changed this ethos by championing a growth mindset, encouraging employees to be “learn-it-alls” and not “know-it-alls.” The company embraced Amy Edmondson’s concept of psychological safety, with Nadella reportedly asking for feedback after every conversation, demonstrating a growth mindset that prioritizes learning over being right. This approach filters throughout the organization, creating an environment where defensive responses give way to curiosity and openness to different perspectives.

Creating psychologically safe spaces requires moving beyond traditional diversity categories or “boxes” that can inadvertently reinforce divisions. Instead, successful organizations focus on fostering meaningful conversations across different backgrounds and experiences. The goal is to create space for all voices to contribute authentically, recognizing that true wisdom emerges when diverse perspectives are valued and integrated, as opposed to managing diverse groups in isolation.

In practical terms, instead of being prescriptive, leaders must create the conditions for successful and lasting inclusion by casting a wide net that includes all diversity within an organization – not just by creating specific sub-programs for each underrepresented group.

Experience shows that leaders play a crucial role in modeling the vulnerability required for psychological safety. When senior executives demonstrate openness to feedback and admit their own learning opportunities, it signals that growth and curiosity are valued over perfection. This creates ripple effects throughout the organization, encouraging employees at all levels to engage more authentically with colleagues from different backgrounds.

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“Research indicates that in adverse contexts, underrepresented leaders often must over-emphasize certain behaviors to be heard and respected.”

Empowering diverse leadership and addressing systemic barriers

Organizations serious about inclusion must also examine their leadership development frameworks through an inclusion lens. For example, some forward-thinking companies have begun revising their leadership models specifically to ensure they support and develop female leadership qualities, recognizing that these competencies are essential for navigating complex, challenging environments.

The approach extends beyond gender to encompass all forms of difference. Research indicates that in adverse contexts, underrepresented leaders often must over-emphasize certain behaviors to be heard and respected. Organizations can address this by creating environments where different leadership styles are not only accepted but actively valued and leveraged. Consider the impact of programs like HEMLATA, which aims to break the cycle of intergenerational poverty by supporting bright, high-potential young women from underserved communities in India, helping them thrive through education and empowerment. By addressing systemic barriers – not just providing tuition, but housing, technology, and holistic support – the program enables participants to secure meaningful employment that transforms both their own lives and their families’ circumstances. This demonstrates how creating the right environment enables people to thrive regardless of their background.

The lesson for corporate leaders is clear: inclusion requires addressing structural barriers, not just individual attitudes. This might mean revising promotion criteria, reimagining networking opportunities, or restructuring mentorship programs to ensure they serve diverse leadership styles and backgrounds effectively.

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Successful scaling requires a clear vision and strategy that inspires participation rather than mandating compliance

Scaling inclusion and building corporate curiosity

Large organizations face unique challenges in scaling inclusion efforts across diverse geographic and cultural contexts. Successful scaling requires a clear vision and strategy that inspires participation rather than mandating compliance. The key lies in engaging all voices during the initial stages to understand the full spectrum of diversity within the organization.

No single leader can comprehend all dimensions of difference within a large organization. Someone in a wheelchair faces different challenges than a single parent, who encounters different barriers than someone from a particular cultural background. Effective inclusion strategies require systematic listening to understand these varied experiences and design solutions that address real needs – not just assumed ones.

Corporate curiosity is essential for thriving in diverse, fast-changing environments. Embracing varied perspectives makes organizations more innovative by using different viewpoints to solve problems and spot opportunities. For instance, Novo Nordisk promotes diversity and inclusivity, driving innovation through patient-focused research and collaboration. This strategy has led to breakthrough treatments and recognition for gender equality and ethically driven innovation.

Takeaways for business leaders

Business leaders seeking to build truly inclusive organizations should focus on these key areas.

Embrace diversity and inclusion wholeheartedly as a fundamental mindset as opposed to a compliance requirement. This means examining organizational values deeply and ensuring they translate into specific, observable behaviors that promote openness, curiosity, and empathy.

Commit to authentic role-modeling and ambassadorship at all leadership levels. Leaders must demonstrate vulnerability, proactively seek feedback, and show genuine openness to different perspectives. This creates permission for others throughout the organization to engage authentically across differences.

Create genuinely psychologically safe spaces where people can express themselves, share their experiences, and disagree constructively. This requires moving beyond demographic diversity categories to focus on enabling all voices to contribute meaningfully to organizational success.

Maintain curiosity and continue asking questions rather than providing all the answers. Questions sustain dialogue and promote learning, while premature answers can shut down exploration and discovery. The goal should be building on each other’s perspectives, not on winning debates.

Prioritize human relationships and connections as the foundation of all inclusion efforts. At its core, diversity and inclusion is about recognizing the equal rights and dignity of all humans and creating organizational cultures that enable everyone to contribute their best work.

The most effective strategy involves maintaining commitment to core values while engaging in respectful dialogue with different viewpoints.

Navigating political and social challenges with courage

The current political climate presents significant challenges for organizations committed to inclusion. Some companies are retreating from their stated values when faced with external pressure, but experience shows this approach ultimately undermines credibility and employee trust. If a company alters course on inclusion, in the face of the first signs of a headwind, some colleagues may conclude that the company’s values were entirely disposable.

The most effective strategy involves maintaining commitment to core values while engaging in respectful dialogue with different viewpoints.

Nelson Mandela exemplified this approach, learning “even from enemies like prison warders and National Party ministers” while never “surrendering his standpoint or denying differences.” This demonstrates how organizations can maintain their principles while remaining open to different perspectives.

Successful navigation requires creating organizational cultures where people feel safe to disagree and explore different viewpoints without fear of retribution. This means developing employees’ skills in having challenging conversations, helping them recognize their defensive mechanisms, and providing frameworks for meaningful dialogue across differences.

Organizations must resist the temptation to avoid controversy by abandoning their values. Instead, they should focus on remaining curious and asking meaningful questions that explore different perspectives while maintaining their commitment to inclusion and equality.

The path forward requires courage to maintain commitments to inclusion even when facing external pressure, wisdom to engage respectfully with different viewpoints, and persistence to continue building more equitable organizations regardless of the political environment. Organizations that master these capabilities will not only create better workplaces but will also achieve superior business results through the power of truly diverse and inclusive teams.

Authors

Silke Mischke

Senior Leadership Advisor and Lecturer, IMD and EPFL

Silke Mischke is a Senior Leadership Advisor and Leadership Lecturer at IMD and EPFL, where she teaches leadership in the E4S Master in Sustainability Management, a joint program by IMD, EPFL, and UNIL. She holds a Doctorate in Business Administration and a Master’s degree in Cognitive Psychology. Her work focuses on leadership through the lens of emotional intelligence, exploring its impact on individuals, teams, and organizational performance. She coaches and teaches leaders and teams from a wide range of international organizations, supporting their development through both individual and collective learning. At IMD, she also serves as Co-Director of the Executive Coaching Certificate program.

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