Despite the significant impact its policies and practices can have on commercial and professional success, diversity and inclusion has not, historically, been the most researched topic in the realm of business. And LGBTQ+ issues? The field is even more niche.

As a result, when it comes to the lessons to be learned for business leaders, those rooted in academic investigation and discussion must not be overlooked.

To practice what we preach, we’ve collected seven key pieces of research from business schools around the world that provide key lessons for business leaders to take away.

Whether you’re part of this community, or not, there’s a lesson to take note of…

1) Evolving your marketing

Pride Month offers a timely opportunity for business leaders to reflect on their commitment to diversity and inclusion. Research by Matteo Montecchi (King’s Business School), and his co-authors provides a framework for understanding LGBTQIA+ consumer market evolution, urging businesses to integrate these insights into their marketing strategies

The authors outline three phases; crisis, marketisation, and advocacy, developing a framework that unpacks how the LGBTQIA+ consumer market has emerged and evolved.

Business leaders, the researchers suggest, should take note and adopt proactive policies that advocate for LGBTQIA+ rights and visibility and emphasise the importance of inclusive practices to address ongoing discrimination and stigma against LGBTQIA+ consumers.

For example, ads featuring LGBTQIA+ individuals should be positive and realistic, avoiding stereotypes, and collaborating with LGBTQIA+ creatives to ensure campaigns genuinely reflect community diversity and appeal.

By embracing inclusive practices and authentic engagement, companies can build stronger connections with LGBTQIA+ consumers and foster a more equitable marketplace.

2) Inclusion is a win for business

Marketing is just one-way businesses, by nature, seek to gain an edge over others. And according to research from Aalto University School of Business and the University of Vaasa, one such edge may lie in embracing LGBT-friendly policies.

The study, led by Professor Jukka Sihvonen, at Aalto University School of Business, alongside co-authors Veda Fatmy, John Kihn, and Sami Vähämaa from the University of Vaasa, analysed the LGBT-friendly corporate policies and firm performance of publicly traded US firms spanning from 2003 to 2016

Their findings revealed a strong link between LGBT-friendly initiatives and improved profitability as well as higher stock market valuations, suggesting that these policies translate into tangible financial benefits for businesses.

Interestingly, the study also uncovered that the positive impact of these progressive policies was more pronounced for firms situated in liberal US states.

But what exactly drives this correlation between LGBT friendliness and firm performance? According to the researchers, there are several potential factors at play. Previous studies have shown that companies “with inclusive policies tend to experience greater employee commitment, higher job satisfaction, increased productivity, and a more altruistic workplace culture”, highlights Jukka Sihvonen, Assistant Professor at Aalto University School of Business.

Ultimately, these findings underscore the importance of embracing progressive corporate policies and fostering diversity and inclusion within the workplace. By doing so, companies not only uphold ethical standards but also stand to gain in terms of financial performance and competitiveness.

3) Entrepreneurs are everywhere

As Professor Sihvonen highlights, one of the main reasons for this is because you attract the best talent by doing so. Indeed, gender diversity in business isn’t just about equality, it’s about unlocking untapped potential. A study by Klavs Ciprikis from the Economic and Social Research Institute, along with Damien Cassells from NUI Maynooth and Jenny Berrill from Trinity Business School highlights the challenges encountered by transgender individuals in the workplace, demonstrating  a notable pattern of turning to self-employment as a means to address discrimination.

The researchers discovered that transgender individuals are more inclined to go into self-employment compared to cisgender people. Moreover, they found a substantial income gap between transgender and cisgender individuals, with discrimination accounting for a significant portion of this divide.

The results challenges entrepreneurship stereotypes, including the traditional image of an entrepreneur, and their underlying motivations for embarking on their own business ventures. For businesses, these findings serve as a wake-up call to address systemic biases and foster inclusive environments.

By promoting inclusive policies and combating discrimination, companies can tap into a pool of talent that brings unique perspectives and innovation to the table.

4) Inclusive tools, inclusive workplace

Part of creating a more inclusive workspace involves recognising pre-exisiting bias, which can take a lot of self-awareness from employees and organisations. Bias can appear in workplace policies, office language, and even in the tools we use.

One set of tools that are becoming more and more common are Natural Language Processors or text generators. But Natural Language Processors are more likely to amplify bias, including those related to gender and sexual orientation, found research by Debora Nozza, an Assistant Professor, Federico Bianchi, a Postdoctoral Researcher, and Professor Dirk Hovy, all from Bocconi University.

Recognising these biases and actively working to mitigate them is essential, especially in customer interactions, and an ethical deployment of these technologies should be considered, regularly evaluating and updating them to minimise harm.

Continuous learning and improvement in ethics and bias mitigation for workers and staff also becomes necessary, as informed teams are the most likely to spot bias in generated text. AI may improve productivity, but the cost of not making sure you’re addressing its pitfalls could lead to error after error.  

5) Micro-aggressions matter

As prevalent, and invisible, bias in the workplace can be, it’s not just limited to language and text; micro-aggressions remind us of the bias we share directly, and yet subtly.

Speaking with Professor David Rivera (Queens College-City University of New York) and Wharton School of the University of Pennsylvania Graduate Lori Tauber Marcus, Wharton Strategy Professor Stephanie Creary discusses microaggressions and their role in the workplace. Rivera defines these as “brief and commonplace verbal, behavioural, or environmental indignities that communicate hostility, derogation, negative slight or insult towards anybody of a marginalised or oppressed group.”

They outline four areas where businesses can make tangible steps towards reducing micro-aggressions tin their company culture.

First, expose microaggressions by directly confronting them and seeking support in doing so. Secondly, address them by expressing your reaction and setting boundaries followed, thirdly, by educating offenders by highlighting the gap between intent and impact. Finally, they highlight it’s important to always seek external support following, to make sure all individuals leave the situation ok.

In doing this, a company culture is fostered where people feel more at ease, and able to critique one another without worry of being harshly punished, or cancelled, for mistakes. Doing so creates less conflict in the long term, the three authors highlight.

6) ‘Happy Talk’ is not always effective

When thinking about micro-aggressions, language matters. And when discussing your own diversity and inclusion policies language matters too, and perhaps more than you may realise.

A study by NYU Stern’s Lisa Leslie, Olivia Foster-Gimbel, Elinor Flynn, and Colleen F. Manchester from the University of Minnesota, examined how leaders’ communication strategies regarding diversity can impact the effectiveness of diversity initiatives within their organisations. It suggests that the common practice of only highlighting positive aspects of diversity policies without acknowledging its challenges (which they term as “happy talk”) may not be effective in promoting true diversity and inclusion.

Instead, by using “contingent rhetoric”, which acknowledges both the benefits and obstacles of diversity, leaders can encourage employees to make more concerted efforts towards achieving diversity goals. The researchers showed a direct correlation between use of contingent rhetoric, and efficacy of diversity and inclusion policies.

Business leaders should be open and honest with the benefits and challenges an organisation is experiencing because of a diversity and inclusion initiative, as they might be more effective at bringing workers along the journey with them.

7) Do ask, do tell

Like other invisible diversity groups, LGBTQ+ workers face workplace inequalities stemming from heteronormative assumptions. While coming out at work can have positive psychological effects, many individuals opt not to disclose their LGBTQ identity due to potential discrimination.

Proffessor. Junko Takagi from ESSEC Business School undertook research that explored the experiences of young LGBTQ+ graduates as they step away from higher education and into the world of work. Takagi found that more ‘experienced’ individuals prioritised finding LGBTQ-friendly workplaces, sometimes subtly signalling their LGBTQ+ identity in their professional profiles.

However, often a “don’t ask, don’t tell” approach was adpoted in less inclusive environments. Indeed, in environments where nationality and language were more important, queer identities were often sidelined.

Professor Takagi highlights that when an employee is forced to conceal part of their identity, it impacts not only their productivity, but company culture and output of the entire organisation.

The overarching advice is clear: foster acceptance and get harder working staff. Be inclusive and expect better ideas. Aim for diversity and see better returns.

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