Diversity can drive bottom line performance
Managing and encouraging diversity within business is not about paying lip service to political correctness – it is a major piece in the jigsaw puzzle of growth within a fiercely competitive international market. Businesses which seek to engage with the global community must also embrace diversity in every way.
The ‘pale, male, and stale’ presence in the board room - which has been prevalent for decades throughout offices from London to New York to Hong Kong - has remained until quite recently in many businesses worldwide.
But what kind of change is actually taking place? How deep does this change run in the veins of an organisation? Is diversity within the workplace perceived as simply ‘filling quotas’? Or, are organisations genuinely interested in actualizing real and measurable change?
Frazer Jones recently hosted a group of senior HR professionals at their offices in London to take part in an evening of discussion surrounding diversity and inclusion in the workplace.
Charlotte Sweeny, Head of Diversity and Inclusion EMEA at Nomura International PLC, lead a presentation entitled “Diversity & Inclusion – Moving the dial in challenging times”, which generated a lively and spirited discussion around the issues surrounding implementation and delivery of diversity within the workplace.
The reality seems to be that despite an increased awareness and subsequent outpouring of both time and resources into programmes aimed at improving diversity and inclusion in the workplace, relatively little has changed. Charlotte Sweeny pointed to a Harvard study which focused on the subject of diversity in the workplace which had gathered data over the past 30 years, the authors of which concluded, “Diversity training, evaluations and network programmes have made no positive effects in the average workplace.” Why might this be the case? How is it that these programmes – into which millions of pounds have been invested – have not made any lasting positive change, or moved the dial forward in a profound way?
By the end of the discussion, it had been brought to light that there are currently two glaring challenges standing in the way of achieving a truly diverse and inclusive organisation.
Firstly, initiatives surrounding diversity within the workplace are seen as programmes which are often regarded as ‘nice to have’, but not necessary to the business. As one participant noted, “Changing the mind-set of what a diversity programme looks like, is what’s important. Why isn’t diversity in everything we do? Why does it have to be in the form of a programme?” This view was echoed throughout the room, with most people agreeing that until greater emphasis is placed on having diversity and inclusion embedded into every aspect of business practice, any kind of ‘change’ will only be surface-deep and subsequently, will not last.
Secondly, there was an overall lack of accountability. This hindered the ability of an organisation to successfully drive the change needed to see a moving of the dial. As one person was quick to point out, “A company will say they believe in x, y, and z, however, unless people are held accountable to it, they will do what they have to do to get the job done, as they always have.”
How then do you hold people accountable? Will any company really take a hard line with the employee who acts inappropriately but is a key resource in the success of the business? One participant had her doubts, as she raised the question: “If a person makes £10m for the company, but is inappropriate and not at all inclusive, what are you to do? What will the company do?”
Many were quick to agree that it would be a false aim to expect that everyone within the business would ‘buy-in’ to diversity. “If organisations are focusing on fixing people rather than changing culture, there will be no change.”
The cynics will cite that the bottom line of any business is focused on profit, and how they get there is just a minor detail. Those types of mentalities are unlikely to change, yet they can still be held accountable, whether the person who wields that opinion is an MD or a more junior employee. A strong point was raised that change really needs to be driven from the top-down, and that the focus should be on making the right people accountable, “If you hold the leader of the group or team accountable, they in turn will hold their team more accountable, and so on. There has to be a bottom line below which no one should fall, and that needs to be enforced by the leaders across the business.”
As the evening drew to a close a couple of strong constants remained.
Firstly, diversity and inclusion within the workplace needs to be built in to the processes of the every-day running of that business, rather than as a separate programme or initiative.
The second is that the right people within the organisation need to be held accountable for carrying out and overseeing this change, and must avoid turning a blind-eye to issues when it is ‘convenient’ or unprofitable to do so.
So when will we see actual change? What is the likelihood that this way of thinking will become the norm within organisations whose prime focus is running a successful and therefore profitable business?
There were those who seemed very optimistic and most positive about diversity and inclusion and its presence within the organisation. One person rhetorically posed the question, “Why wouldn’t we want to be as diverse as we can be? We think of it as, ‘Who are we missing?’ Why would we want to close out certain people? Being more diverse is all about bringing in new innovative ways of thinking…allowing us to compete against other firms!”
Given a new McKinsey report that showed U.S. companies with the highest executive-board diversity had returns on equity 95 percent higher and earnings margins 58 percent higher, on average, than those with the least executive diversity, the financially driven argument for greater diversity can no longer be denied.
Mark Brewer – Founding Partner, Frazer Jones