Something is changing; diversity is going mainstream.
It is no longer a ‘bolt on’ issue that only those companies wanting to present a certain image concern themselves with. It’s becoming clear that diversity makes solid business sense.
Witness the tech industry, so often at the forefront of cultural change, in recent weeks engaging in a very public debate about the importance of diversity. Industry giants Apple and Twitter have published diversity audits and pledged to do more to increase diversity in their workforce.
Janet Van Huysse, Twitter’s Vice President, Diversity and Inclusion put it simply: “As we look ahead, we see opportunity rather than a challenge.”
Companies currently looking to appoint Heads of Diversity include Airbnb, Asana and Dropbox. Those recognised by Diversity Inc. as making the most effort to increase diversity this year include Novartis, PricewaterhouseCoopers and Procter & Gamble.
This has become a mainstream issue, a competitive business imperative.
Diversity building profit
Natasha Clarke, Managing Partner at SThree Group, has been responsible for a strategy that has led to the company being recognised in the Times Top 50 Employers for Women two years running. As SThree’s Diversity Lead she advanced the company’s Identity programme to create an inclusive environment in which women are supported to succeed, an achievement recognised with a Diversity Champion award from Opportunity Now.
Clarke believes it is an understanding of the very real financial benefits of diversity that is driving fundamental change, “You have to help people understand that it’s not just the ‘right thing’ to do but that commercially, it makes sense,” she says. “Diverse opinions and perspectives bring better decision making and a higher quality of thinking to the table.”
Clarke cites the banking sector as an example. She agrees with the suggestion that more women on the boards of financial institutions would help moderate risk-taking because of their tendency to be more risk averse.
This is also a theory backed by a new University of Oxfordstudy into the US oil industry which finds a “worrying” lack of diversity on company boards. The report warns that lack of diversity significantly increases the risk of ‘groupthink’ in the sector and that, in turn, increases the likelihood of bad investment choices being made.
Broader benefits of diversity
The business case for diversity doesn’t begin and end at board level, of course. Research by the New York-based Center for Talent Innovation looked at what it called “two-dimensional diversity”, a combination of “inherent diversity” such as gender and race, combined with “acquired diversity” such as global experience and language skills.
The report found that publicly traded companies with two-dimensional diversity were 45% more likely than those without to have expanded market share in the past year. They were also 70% more likely to have captured a new market.
When teams had one or more members who represented a target end-user, the entire team was as much as 158% more likely to understand that target end-user and innovate accordingly.
And the Economist Intelligence Unit conducted a major study on why businesses valued diversity. More than half of the senior executives surveyed said it tapped into a broad range of background and skill sets, while 43% said it allowed them to gain new sources of talent to understand customers better and increase sales.
Actions speak louder than words
So far, so persuasive. But convincing business leaders of the benefits of diversity is not the only challenge. They must also understand how to go about achieving it. Concrete diversity strategies need to be developed and implemented to make any real impact.
Rachael Saunders, Age at Work Director at Business in the Community, says the key to driving change is absolute clarity about why you want it to happen. “If it is just because it’s a nice thing to do it won’t get traction,” she says. “It needs to be something that’s core to the organisation. You have to make sure it’s embedded within all your business structures and processes. You need to make sure your board is accountable and make sure you are measuring and reporting on it in the same way you would with any other business priority.”
Saunders says organisations should have the confidence to try new approaches when it comes to diversity. “Be innovative. Be brave. You can learn from others but there is no one template.”
Dara Lubarsky, Director of Client Relationship Management at Huxley, a brand within the SThree Group, has been instrumental in driving her company’s diversity strategy in the US. She says the biggest challenge is often changing an organisation’s culture. “I think three things need to happen,” she says. “Firstly, there needs to be an HR policy in place - it has to be supported at a corporate level. Secondly, it needs to be top-down with senior level sponsors promoting the initiatives. And thirdly, tactically, you need a bottom up approach too, you need local champions.”
Lubarsky says that although diversity is a complex thing to get right, she is optimistic about the changes she is seeing.
Is she frustrated that some organisations still don’t seem to take diversity seriously? Apparently not. So clear is the business case for diversity in Lubarsky’s view, those not willing to change will pay the ultimate price, “Yes, there are firms that don't believe in it. But to be honest, I just think they are going to be left behind.”