HOW WE WORK
One of my colleagues always talks about diversity as being invited to the party but inclusion is whether you are asked to dance.
Diversity management ensures that you have representation when you look across a company, there is no discrimination and no particular group is disadvantaged. But that doesn’t mean to say there is true inclusion.If companies are only tolerating diversity – making sure they have the right number of employees from different age groups, social backgrounds, gender and ethnicity – that doesn’t automatically lead to inclusion.
One of the big business benefits of diversity is that you get different perspectives, experiences and ideas. And, inclusion is about people feeling that they are valued for who they are and the differences they bring.
It is one thing to make sure companies don’t discriminate against any group in the workforce, but another to actively encourage inclusion. So, how do you do this?
It’s vital that employees feel they have a voice at the table and they are listened to.
At one company, employees mentioned to their manager they weren’t getting time for lunch while working from home during the Covid-19 lockdown, as they had so many back-to-back Zoom meetings. And, they felt they couldn’t say no to senior management. So, the organisation brought in guidelines and told employees no meetings could take place between 12.30pm and 2pm.
It’s also about being valued for who you are. I can give you an example from a finance company I worked with recently. One employee, who had dreadlocks and an earring, said he really enjoyed working there. When asked why by the D&I Director, he said that his last company didn’t like the way he looked and he wouldn’t have been allowed to wear an earring, but the new company didn’t mind.
During lockdown, another firm focused on mental health and wellbeing. Companies that have put in a lot of effort into supporting their staff in this way are doing very well in their engagement surveys because employees feel looked after.
It’s the right thing to do
I write about the business benefits of having a diverse workforce, but there is part of me that gets annoyed with the question. No one ever asked for the benefits of having an all-male board, so why should I come up with evidence for why women, for example, help to improve a business?
Many countries point to social justice. If 51% of a country’s population is female, then why aren’t there more women in senior jobs? At entry level most organisations have a 50/50 split between gender but there are very few women at the top of organisations. In the FTSE 100 [the largest companies listed on the London Stock Exchange], 95 of the 100 CEOs are male. And, it’s predominantly white men. There are very few black and ethnic minority men that run companies. It’s clear that organisations are not meritocratic.
Companies do much better if they represent the marketplace they are serving. An example is a leading British retailer which had an all-male board – this was ridiculous considering that its main customers in stores were pregnant women and young mothers.
Global organisations also need different ethnicities and nationalities on their boards, as they need to understand the different requirements of particular countries. One of my colleagues who sat on the board of a food company in Iceland suggested adapting a product which children could take to school and it ended up becoming a popular line for them. So, the business benefits come from representing and therefore understanding your marketplace better.
PUBLISHED SEPTEMBER 2020
Professor Susan Vinnicombe has consulted for organisations in over 20 countries including the USA, Ireland, India, the UAE, Philippines, Trinidad, Nigeria, Australia and New Zealand, on how best to attract, retain and develop women executives.
She was a member of the Davies Steering Committee from 2010 to 2015 and has been invited onto the advisory board of Sir Philip Hampton/Dame Helen Alexander’s Review on the lack of women in the executive pipeline. In 2016, she was made a Companion of the Chartered Institute of Management and honoured by the International Women’s Forum (IWF) Washington as a woman who has made a difference in the world.
Professor Vinnicombe was awarded an OBE for her Services to Diversity in the Queen’s New Year Honours List in 2005 and subsequently awarded a CBE for her services to gender equality in the Queen’s Birthday Honours, 2014.
A DIVERSE WORKFORCE DOESN’T NECESSARILY EQUAL AN INCLUSIVE ONE, SAYS PROFESSOR SUSAN VINNICOMBE. IT’S IMPORTANT THAT PEOPLE FEEL VALUED FOR WHO THEY ARE, AS ONE OF THE BENEFITS OF DIVERSITY IS HAVING DIFFERENT PERSPECTIVES, EXPERIENCES AND IDEAS WHICH LEADS TO GREATER INNOVATION AND BETTER PERFORMANCE
Everyone has different perspectives. There has been a lot of research done to show that overall where you do have diverse teams it can lead to greater innovation and they perform better.
Certainly, at board level there is better corporate governance, as women are more likely to challenge and ask for clarification. The Lord Davies Review [a UK report with recommendations to increase representation of women on boards] also highlighted research that showed strong stock market growth among European companies is most likely to occur where there is a higher proportion of women in senior management teams.
Companies with more women on their boards were found to outperform their rivals with a 42% higher return in sales, 66% higher return on invested capital and 53% higher return on equity.
Different individuals bring different qualities and they have different life experiences. It’s not about one group being better than another; if companies truly have diverse teams it brings together a much greater diversity of experiences and ideas, and therefore you perform better.
Companies can achieve very good results across D&I regardless of what sector they are in. In fact, there aren’t big sectorial differences. Taking the FTSE 100 again, the companies with the lowest percentages of women on their boards are supermarkets but lots of women work in these businesses. So, what is happening when they are not developing their talented women and bringing them through to senior roles?
We also find that many companies don’t have any black and ethnic minority board members.
When individual companies commit to D&I, they achieve results. Companies including Diageo, GSK, and Unilever have done particularly well in developing women into senior leadership roles.
Setting targets is incredibly important. What gets measured gets done. If companies don’t set themselves targets and if they don’t measure them, it’s a non-starter. So, I’m very pleased that in the last ten years more and more companies have set gender diversity targets and now ethnicity targets, as it does have results.
Once you have a diverse leadership team, it is very inspiring to colleagues at a junior level. Targets are very important in changing the culture of organisations.