At the heart of meaningful relationships is connection. When we apply this idea to the workplace, the core message is that employees want to feel connected, valued and motivated. They yearn for a sense of belonging and purpose.

Your goal as a leader – whether a new manager or veteran of the C-suite – should be to create a culture centered on positive and supportive relationships. The resulting employee engagement will have an outsized effect on bottom-line objectives, from stronger customer service to enhanced innovation and better morale. These are the types of results that can turn an average quarter into a winner or become the backbone of sustainable success.

Jamie Ousterout, chief experience officer at The Diversity Movement, has witnessed these outcomes based on her experience with the firm’s hundreds of clients and building internal culture. “When individuals feel linked to the people they work with and the clientele they serve, it leads to meaningful engagement,” she explains. “This culture creates a shared journey where all participants contribute to collective success.”

Employees want to know that their voices matter, that their ideas can spark innovation and their concerns will be addressed. In today’s business world, this is the type of connection that matters to your stakeholders. It’s what you need to focus on if you want to win.

When employees feel authentically engaged, great things can happen. And, as research has begun to demonstrate, lack of engagement makes it almost certain that you will never adequately compete. In other words, a disengaged workforce more or less guarantees missed targets, dismal campaigns and talent fleeing to your competitors.

Paul Leinwand, Mahadeva Matt Mani and Blair Sheppard explain in Harvard Business Review that leaders must “move away from focusing on their individual areas of responsibility,” and instead, focus on “responding to needs bubbling up from below.” The new leadership paradigm is working “together as a team to shape the organization’s future and steer a path toward it.”

Lack of diversity is likely costing you money

At the end of last year, consulting firm McKinsey released “Diversity Matters Even More,” a report based on diversity, equity and inclusion (DEI) findings based on surveys and research across global organizations. When they examined executive teams at companies at the top and bottom of the scale in the categories of “gender” and “ethnic diversity,” they found that companies in the top quartile were 9% more likely to “outperform their peers.”

Even more telling, however, is the performance of organizations in the bottom quartile in these categories, which are 66% “less likely to outperform financially on average.” In comparison, when McKinsey looked at teams in these categories in 2020, they found them 27% less likely to be competitive. These numbers demonstrate that falling behind leads to an almost impossible chance of catching up, leading the researchers to determine that the “lack of diversity may be getting more expensive.”

These findings were telling, and McKinsey uncovered similar results looking at leadership at the board of directors level. Organizations rated at the top for gender diversity were 27% more likely to outperform those at the bottom. Similarly, ethnically diverse boards were 13% more likely. The outcomes, according to the team, support a “hypothesis that diversity benefits extend across top corporate leadership to boards, where DEI policy decisions for the whole organization are often made.”

One solution they recommended is to build employee engagement by creating “a culture that fosters inclusion and belonging.” When “inclusive leadership” becomes “the norm,” employees are more satisfied and lend support to diversity-led initiatives like Employee Resource Groups (ERGs). Engaged employees, then, help leaders achieve mission critical outcomes, such as “retaining diverse talent, innovation, and customer centricity.”

Building employee engagement

Clearly, getting leadership teams and boards to be more diverse may take time, despite the fiscal benefits of making it a top priority. In the meantime, what executives can do right away is focus on building inclusive leadership skills and using that awareness to create cultures centered on belonging and well-being.

For many leaders, this effort is going to force them outside their traditional comfort zones, because employee engagement thrives in an environment where personal and professional are intertwined. To neglect this evolution is to lag behind.

Here are three steps leaders can take to build an inclusive culture:

Spend time creating strong teams: Your ultimate goal is a workplace where well-being is the cornerstone of an empowered culture. Inclusive leadership requires strong executive teams that use their skills to create collaboration, innovation – and ultimately success – throughout their own teams. Teams transcend individual accomplishments. But, the emphasis on teamwork begins at the top and must be supported by leadership.

Use collaboration as a competitive edge: No matter where they are headquartered or where their teams operate, the best organizations across the globe prioritize collaboration and innovation. Well-being at the foundation propels employee engagement throughout the company, ultimately translating into a distinctive competitive edge.

Reward sustainable success: Positive work experiences lead to cultures built on well-being, belonging and improved job performance. Executive teams and board members must prioritize and incentivize actions that lead to success. Otherwise, it will be difficult to operationalize and scale these outcomes over the long-term. To say it plainly – engaged employees outperform those less engaged, which contributes to heightened productivity and revenue growth.

At its center, inclusive leadership is the art of fostering a sense of value and belonging, while simultaneously steering toward organizational goals. Alan King, president and CEO at Workplace Options, advocates for empowering individuals to be their authentic selves, emphasizing a human-centric approach to holistic health.

“Advancing mental health and psychosocial safety at work may call for a significant organizational change in a company’s culture, including a shift in leadership mindset,” he says. “On their own, employees can only do so much to move the needle if not actively empowered by the employer.”

As executives, we must shape workplaces where individuals flourish. This means prioritizing employee engagement. Creating healthy, thriving work environments, no matter where your people are in the world, is a fundamental driver of business success that is measurable and linked to bottom-line results.

Free copy of TDM LeaderView eBook

Before you go, download TDM LeaderView: Elevate Team Performance Through Inclusive Leadership, an eBook that provides detailed analysis of inclusive leadership and TDM’s LeaderView product, an innovative way to assess whole-team skills across seven professional competencies. Leadership groups that have used LeaderView report increased team productivity, retention and organizational impact. Get your eBook here.

About Donald Thompson

Donald Thompson, EY Entrepreneur Of The Year® 2023 SE Award winner, founded The Diversity Movement (TDM) to fundamentally transform the modern workplace through diversity-led culture change. TDM was recently acquired by Workplace Options, which brings holistic wellbeing services to more than 80 million people in more than 200 countries and territories across the globe. Recognized by Inc., Fast Company and Forbes, Thompson is author of Underestimated: A CEO’s Unlikely Path to Success, hosts the podcast “High Octane Leadership in an Empathetic World” and has published widely on leadership and the executive mindset. As a leadership and executive coach, Thompson has created a culture-centric ethos for winning in the marketplace by balancing empathy and economics.

Follow him on LinkedIn for updates on news, events and his podcast, or contact him at for executive coaching, speaking engagements or DEI-related content. TDM has created LeaderView, a leadership assessment tool that uses cultural competency as a driver for improving whole team performance. To further explore DEI content and issues impacting your work and life, visit TDM Library, a multimedia resource hub that gives leaders a trusted source of DEI content.