Senior Diversity is more than just skin deep

Senior Diversity is more than just skin deep

 5 Oct 2018

What does Diversity mean to you?  Is it about identity – gender, ethnicity or religious affiliation?

Or is it about a deeper diversity – a diversity of values, beliefs and attitudes that encompasses having different perspectives on the world and bringing different interpretations to the table?

Research tells us it should be both - and that both have a significant impact on financial performance.  As Sally Penni commented at a recent Tech Manchester event “Diversity is not about tokenism, it is about profit”.  McKinsey’s 2018 report ‘Delivering through Diversity’ shows that gender diversity in management teams increases profitability more than previously thought. 

Companies in the top 25th percentile for gender diversity were up to 21% more likely to experience above average profits. And at a senior level, companies with more ethnically and culturally diverse boards were up to 43% more likely to see above average profits. 

But although there are significant financial benefits in this surface or identity diversity, there is similarly significant and real value for a business from ‘deep diversity’.  Research published in the Harvard Business Review (2017) shows us that cognitively diverse teams solve problems faster and are more innovative, revealing a strong correlation between cognitively diverse teams and high performance. L'Oreal's CEO Frederic Roze agrees.  In Forbes Insights' 'Innovation through Diversity' he reveals  “Diversity fosters creativity. We need to generate the best ideas from our people in all levels of the company and incorporate them into our business practices.”  They rely on this formula for diversity management - DIVERSITY + INCLUSION = INNOVATION & SUCCESS®.

But the research also shows that cognitively diverse teams spot risk more quickly.

A recent article from Deloitte The diversity and inclusion revolution: Eight powerful truths, explores how this works in reality looking at the drivers behind the turnaround at Quantas.

For CEO Alan Joyce, the spectacular turnaround reflects an underlying condition: “We have a very diverse environment and a very inclusive culture.” Those characteristics, according to Joyce, “got us through the tough times . . . diversity generated better strategy, better risk management, better debates, [and] better outcomes.”  

Having a diverse senior leadership team also impacts and benefits the ability to attract talent throughout the organisation which could explain some of the impact diversity ultimately has on profit.  'Innovation through Diversity' explores how diversity and inclusion policies are being designed specifically as recruiting and retention tools, helping to broaden the pool of talent a company can recruit from and helping to build an employment brand that is seen as fully inclusive and giving a range of aspirational role models. “If you want to attract the best talent, you need to be reflective of the talent in that market,” said Eileen Taylor, Deutsche Bank’s global head of diversity.

So while most business leaders do now believe that having a diverse and inclusive culture impacts performance as well being a target rooted in fairness and ‘the right thing to do’, many are still struggling to actually achieve it in practice.

The reasons….

Firstly, we are secretly controlled by our unconscious bias which drives us to naturally recruit people that ‘fit right in’ so perpetuating the lack of diversity. 

And secondly, cognitive diversity is unseen information about individuals, and so it’s difficult to deduce via most routes.

Here is where developments in technology can help us and are able to give us insight like never before. At Tindall Perry we have introduced an innovative game-based psychometric profiling tool developed by Arctic Shores, which is remarkably revealing, in to our retained recruitment processes. It uses big data analytics and AI to give us valuable, data-driven insight into how diverse a Board currently is, where the gaps are and how the potential candidate might add to that team and enhance its ability to perform successfully.

It similarly provides objective data to question our natural unconscious bias and challenge our decisions of who we intuitively think might add most to the team.

The issue of diversity should no longer be skin deep. Whilst it is important to have a workforce that is visually and culturally representative of the wider population, the makeup of the best senior leadership teams shouldn’t just be based on looks and ticking boxes.

Joanne McTiffin, TIndall Perry Insights

joanne.mctiffin@tindallperry.co.uk

https://www.tindallperry.co.uk

 

 

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