Moving the Diversity Discussion On

Moving the Diversity Discussion On

Having set a target of 25% female representation on FTSE100 boards by 2015 four years ago, Lord Davies announced last week that the target has been surpassed. He also announced that the target for 2020 is for 33% female representation on boards.

I commend the FTSE100 & FTSE250 companies that have, over the last five years, made significant efforts to change the way they search for talent and create more diverse talent pipelines. They have also had to undergo some cultural change in order to be more welcoming to women. However, there is always more to be done!

What struck me when reading the report; is that gender diversity should not be viewed one-dimensionally. Five years ago when the first report was produced, it was commonplace for clients to approach me about gender diversity as a sole approach to diversity. But since then, the conversation has moved on. Diversity has become a multi-dimensional goal for businesses, and the focus has moved towards inclusion – capitalising on the benefits of diverse talent rather than just recruiting diverse talent.

Two-dimensional diversity

Speaking to the Financial Times, Lord Davies said he genuinely believed a shift is happening in corporate Britain: “There is going to be a transformation in the landscape of UK corporate.”

And there is, and the most progressive organisations are taking it well beyond gender.

Client conversations have moved on; to diversity of thinking, diversity of skills, and the way in which acquired diversity complements inherent diversity. The graphic below by the Center for Talent Innovation captures neatly what two-dimensional diversity encapsulates. It’s this type of blend of inherent characteristics, built upon by gathered experience that brings a new level to diversity.

Capitalising upon diverse thinking

The Davies report is very much focused on diversity, which is the first step but as our clients will verify, this needs to be balanced with inclusion. One of our clients, an oil and gas major, had made in-roads into improving representation from a more diverse talent pool, but found that these employees were not staying with the organisation. Through our research, we found out that a lack of inclusion meant the workplace did not encourage them to be at their best. Training for all hiring and people managers improved the way in which the company welcomed and developed more diverse talent, resulting in better retention and a more inclusive corporate culture.The Center for Talent Innovation’s research found that “when leaders create a culture where the minority voice gets a majority audience, the company realises systematic benefits”. That’s why it’s critical that the culture of the organisation is ready to receive diverse talent, whether that be gender related, sexual orientation or ethnicity – genuine diversity, that impacts on performance, incorporates all.

This is a stumbling block for many organisations that have got the first part right. But, without a culture of inclusion, there is a risk that new voices will go unheard, and talent that cannot make an impact will leave for more openly-minded pastures new. To do a quick cultural check, ask yourself just one simple question:

“What does our Board and executive team look like?”

All the HR policies in the world, whilst powerful, need to be seen through to fruition. The reality is that, if your leadership team is still broadly white, Anglo-Saxon males then there is a way to go to develop an inclusive culture. If the leadership team and wider workforce is not representative of the local community, or client base, explore how the company encourages these groups to be part of the team. Whilst much attention is given to attracting diverse talent, explore what your company does to promote, and retain, diverse talent.

Powering innovation

There is a “robust correlation between highly innovative, diverse companies and market growth.” According to research, employees at publicly traded companies with two-dimensional diversity are 70% more likely (46% vs. 27%) than employees at non-diverse publicly traded companies to report that their firm captured a new market in the past 12 months, and 45% more likely (48% vs. 33%) to report that their firm improved market share in that same time-frame.”

In companies where there is two-dimensional diversity in the team, managers are more likely to share credit for team success, make it safe to risk proposing novel ideas, ensure everyone gets heard, and to empower decision-making by team members.

So, whilst in its simplest form, diversity means there is a need to match the market in terms of demographics, there is a much richer argument than gender alone. Perhaps after five years of visibly promoting female representation in the Boardroom, it’s time to be braver in terms of ‘recruiting for difference’.

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