In this episode of the Proteus Leader Show, host Erika Andersen interviews James T. McKim, managing partner of Organizational Ignition and author of The Diversity Factor. McKim reframes diversity, equity, and inclusion (DEI) not as a moral imperative but as a strategic lever that improves four core dimensions of organizational performance—efficiency, effectiveness, relevance, and financial viability. He cites research (McKinsey, PeopleMaker) showing that DEI‑rich firms deliver 27% higher value, make 87% better decisions, capture 70% more new markets, and outperform peers in EBIT by 35%. The conversation then shifts to how leaders can create the conditions for genuine DEI dialogue. McKim recommends cultivating a growth‑mindset, practicing active listening, paraphrasing, and amplifying voices of under‑represented contributors. He stresses the importance of recognizing differing perspectives, challenging hidden biases, and using data‑backed “I‑statements” in difficult conversations. Throughout, both hosts provide concrete, actionable advice for leaders to model discomfort, encourage curiosity, and embed inclusive practices that ultimately ignite superior organizational performance. The episode closes with calls to action for listeners to explore McKim’s book and Proteus’s leadership resources.
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You're listening to the Proteus Leader Show with Erika Andersen, where you'll get practical tools and insights for leading, managing, and staying ready for the future. Erika is the founding partner of Proteus, a firm that focuses uniquely on leader readiness. A nationally known executive coach and bestselling author, you may already know her as one of the most popular leadership bloggers on Forbes.com. Ready for something you can use today? Here's Erika.
Hello everyone, and welcome back to the Proteus Leader Show. My guest today is James T. McKim, managing partner of the firm Organizational Ignition and the author of The Diversity Factor: Igniting Superior Organizational Performance. Over his 30-plus-year career, James has helped small and large organizations in many industries to spark efficiency and growth through the aligning of people, process, and technology. He has also co-founded several companies and is a highly sought-after advisor and speaker focusing on the topic of organizational performance through diversity. So welcome to the show, James.
Thank you very much, Erika.
Yeah, I'm thrilled to have you. You know, we were talking about this a bit before, but More and more companies seem to be taking diversity, equity, and inclusion more seriously these days and trying to make their organizations places that fully welcome and support every employee. And so I'm thrilled to have you with us to share your experience and your insight about this critical topic. I'm glad you could take the time to show up and talk to us about this.
Happy to be here.
Okay, so you focus on the power of diversity to improve organizational performance, which is such a great take. So can you tell us more about that?
When we generally hear about organizational performance, it's in the context of, well, we want to make a lot of money. Performance equals money in the organizational world. When you hear about diversity, equity, and inclusion, you usually hear it in terms of, well, it's, it's the ethical thing to do. It's a social justice thing to do.
Right.
What research has shown, though, is that diversity, equity, and inclusion actually has a great benefit for organizational performance. And organizational performance in a slightly broader definition than we traditionally use. So I love Universalia's definition of organizational performance, which is the balance of efficiency, effectiveness, relevance, and financial viability.
So if you look at those 4 areas, those 4 components of organizational performance, we can look at how diversity, equity, and inclusion plays into each of those. So if you look at efficiency— let's start with effectiveness. If you look at effectiveness, which is what are the major accomplishments of the organization? Has the organization really met what it says it's going to do? Has it really achieved its mission? Is it achieving its mission? Or is there an increase in the number of roads that are clear?
Yeah.
Has poverty been reduced by a certain amount? So looking at the effectiveness of the organization, McKinsey has done a study that says organizations that embrace diversity, equity, and inclusion creates 27% superior value.
Wow. Right.
And so moving on to efficiency, which has to do with how well the resources that the organization has are being used to create the product or service that the organization is selling.
Yeah.
So PeopleMaker says that organizations that embrace diversity, equity, and inclusion are 87% better at decision-making.
Wow.
And that speaks to the innovation aspect, right?
Huge. Right.
When we talk about relevance, we're talking about how relevant are the products and services that your organization provides?
Yeah.
And are you really— do you have a reputation of having an organization that provides relevant products and services? And over time, So research has shown that organizations that embrace diversity, equity, and inclusion are 70% more likely to capture new markets, which speaks directly to the relevance of the products and services that are being offered.
Yeah.
And then last but not least, financial viability, which speaks to what most people think of in terms of short-term profitability, but also Long-term financial viability.
Sustainable positive financials. Yeah, exactly.
Do you have funding sources that are reliable over time?
Yeah, yeah, yeah.
And McKinsey in their recent study says that organizations that are— that have gender leadership and gender diverse leadership are 35% more likely to outperform their peers in EBIT.
Yeah, yeah.
So that's when I talk about diversity in terms of organizational performance. That's what I'm talking about, bringing this notion of efficiency, effectiveness, relevance, and financial viability, which all business leaders think about. It's the language that they use.
Yeah, yeah.
And showing that diversity can support that and, and can really help improve those. That's the tie that makes it more than just a social justice concept.
Man, I love that, James. It's so clear and so compelling, and I want I want everybody to know those statistics. That's really great.
That's why we're here.
Yeah. Yeah. So let's dig into this in terms of why, you know, what the, what the resistance or hesitation is. I love this quote that I read of yours, that the first step to creating meaningful dialogue around DEI is to become comfortable being uncomfortable. I really agree with that. And I love just how can we do that? You know, how do we do that?
Well, I'd say how we do that is, first of all, determine that you're going to have what Carol Dweck from Stanford University calls a growth mindset.
Yeah, yeah, yeah.
Recognize that you don't know everything and have a curious, inquisitive approach to life.
Yes.
But that's a start, because if you don't have that, then you're going to run into things that don't make sense and you're going to think, well, that's not right. And it may actually be right.
I'm just gonna throw them out if they don't make sense, make me uncomfortable. I'm just gonna throw them out.
Yeah. So start with that growth mindset.
Yeah.
And then also start from a place of curiosity. We, we have this notion of listening and active listening, but where we listen and we repeat back, we paraphrase what we've heard, So we make sure that we actually got, we actually got the point, we actually got what someone was saying before we start to speak what's on our mind. Right? That is a great saying that God gave us 2 ears and one mouth. Did that for a reason. Listen more than you speak.
Yeah.
Something else we can do to become more comfortable with the discomfort is realize that not everyone has the same experiences that we do.
Yeah, yeah, yeah.
Not everyone has the same education, the same expertise, the same perspectives. We don't all come from the same culture, and there are going to be differences. Just accept that there are going to be differences and learn to embrace those differences. It's those differences— and we're in the United States of America, many of us— and that's what makes this country, has made this country, and makes this country great. We are a melting pot.
Yeah.
And we've— many of us have— we've learned, we've grown. And if there's one word that I used most in the book, and I didn't realize this until I'd written the book and then looked back, you know, you— when you write the book, you go back, all right, let me create an index.
Yeah.
And then you have to figure out, so what words do I want to index? The word perspective came out far and above the number of times that any other word came out.
Yeah.
So embracing the notion that decisions are better made with as many different perspectives in the room as possible.
Yes, just start out from that point. Yeah.
Right. And people may say something that— say things that you don't agree with or you don't quite get, but there's truth in their perspective because it comes from their own experience.
Yeah.
So we really have to embrace that.
This is such good, simple, accurate, important advice. And I really love— so you wouldn't know this, but the book that I wrote before my most recent book about change was about learning. And I talk about curiosity, and I talk about that one of the skills for master learners is to be willing to be bad first, that you have to be bad at something before you can get good at it. And it's all about discomfort. So I love everything that you're saying, because it goes to leaders modeling and communicating to people that it is okay to be uncomfortable. Yes. You know that? Yeah, you don't know this. That feels weird. Yep. That's okay. Keep going. Keep going. So I've—
In fact, so interesting you point out your, your book on learning. I used to work in learning and development at HP for a number of years.
Yeah.
So we know that We really grow when we make mistakes.
Yes, yes, yes, yes, absolutely.
Not only is it okay to fail, we need to fail.
Yes, yes. That's how we figure things out, that no child ever learned to walk without falling down.
Exactly. Right.
Okay, well, so then let's, let's be really— you— I love the practicality of what you're saying. So let's apply it to individual leaders. I always promise my listeners kind of practical takeaways. So What can listeners do just right now to, as you say, and I also love this quote, show up for one another and ignite organizational performance? What would you recommend?
So, so good. So I'll repeat one thing I've just said, that is actively listen.
Yeah.
If you actively listen to someone, they will feel heard.
Yeah. Yeah.
They will feel like they're being included.
Yes, yes.
Just active listening is one, one thing you can do right off the bat to show up for somebody.
I love that. And to interrupt for just a minute, it would be hard for me to agree with you more, you know, the power of really true deep listening, especially when you disagree or feel uncomfortable. Yes, yes.
Right. Because that's when you're going to learn, you're going to learn from someone else's perspective that you don't have. that you could never have had because you didn't walk in that person's shoes.
Yeah, exactly.
Something else we can do is what's referred to as amplification, especially of those who are not in the dominant role. Like white males are in the dominant role, but white females or African American females are not in a dominant role. So what happens in a number of cases is A woman will say something, and immediately a white man will repeat exactly what was just said as if it was his idea.
Yeah, yeah, yeah.
So the way we can show up is when a minority says something, or someone who's not in the dominant culture says something, has an idea, has it— it's a really good idea that you like. You should say, well, as Jane just said, and that's a great idea.
Yeah.
And then you can repeat the idea.
Yeah. Yes. Oh, that's wonderful. And, and, and, and when, when some white guy tries to hijack it, you can do that too, right? You can go, yes, I like that. And that's— isn't that just what Jane said a minute ago?
Exactly, exactly. So we're lifting each other up by doing that.
Yeah, that's great.
Something else we can do is look at ways that we can disrupt bias in behavior. And, you know, there— I was just speaking with a group from, from the Republic of Georgia, and I asked them, so do you know how many biases have been identified? And they said, oh, no. There have been over 400 biases identified.
Wow.
So we need to help each other because we have blind spots, we have scotomas, we don't know or recognize our own biases. We can help each other recognize our own biases. Challenge assumptions. And this kind of feels like going back to the '60s and challenge authority here, but challenge assumptions. Make sure that what you're assuming is actually the case.
Yes. Yeah, I love that. And so how would that— so that would that look like if somebody says something you think, you go, huh, is that really accurate? Do we have data to support that?
Exactly, exactly. Okay, exactly.
That's great.
And that's also a concept I teach. I have a workshop called How to Have Difficult Conversations. If someone says something that doesn't quite make sense to you, yeah, doesn't land right on you, you can ask, do you have Data to back that up?
Yeah. Yes. Right. Yeah.
Help me understand. That doesn't quite make sense to me. Help me understand.
Why you're thinking that. Yeah.
Why you're thinking that way. Help me understand why you think that Jane can't do that task.
Yes. Yes.
Right.
Yeah. That's great. It's because it's, um, it's, it's gentle but true. It's not like you're an idiot. It's, huh? Well, tell me why you think that. What data do you have to back that up? That's great.
Right.
Yeah.
And the notion behind that, the philosophy is, we need to use I statements.
Yeah, yeah.
We need to use I statements to talk about what I feel, what I've heard, what I think, what I need to understand, I'd like to understand, not judgmentally, well, you said that wrong, or that, that's wrong. Right? Yeah, coming from that place of it's an I statement that people should not They shouldn't, although these days they do, but they shouldn't, um, they shouldn't gaslight you. They shouldn't say, well, you're not— you're wrong about your own opinion.
Right, right, right. Oh, this is so helpful. I, uh, I, as I said to you earlier, I was promised short and sweet. So think of this, listeners, as the kind of trailer for the, uh, James McKim movie. So this is such great work. And if you want to find out more about James and the work that he and his colleagues do, or to buy a copy of his book, The Diversity Factor, you can go to organizationalignition.com. So thank you so much, James. This has been such a great conversation.
Well, thanks so much for having me. It's been a great conversation indeed.
I love everything you said. And listeners, if you want to find out how Proteus supports leaders to create strong, positive cultures, you're welcome to go to proteusleader.com, click on topics and choose company culture. So thank you, James. Thank you for listening. And until next time, here's to creating the life you truly want.
We hope you're feeling better equipped to create the career, the business, and the life you want. For more insights and tools for leadership and management, join us at ProteusLeader.com. Have an excellent day, and thanks for listening.
