Elliot Vaughn, Managing Director and Partner at Boston Consulting Group in London, is also the Global Leader of Pride@BCG, the firm’s LGBTQ network, and has been featured for a number of years on the OUTstanding 100 LGBT+ Executives list. Elliot also received a Point of Light award from the UK Prime Minister for his commitment to LGBTQ+ activism.
Outside BCG, he is the Founder and Chair of GiveOut, a charity raising funds for global LGBTQ advocacy, and serves on the Board of OutRight Action International, the leading global NGO dedicated to the human rights of LGBTIQ people around the world.
In conversation with People Matters, Elliot talks about the moment that triggered his journey towards diversity and inclusion, the Out @ Work Barometer that shows that 50 percent of LGBTQ employees are not yet out at work, measures to boost innovation at the workplace through diversity and much more.
In your corporate experience of nearly 25 years, what was the moment that triggered your journey towards diversity and inclusion?
My Mum and Dad met in the 1960s at MIT where my mum was the only woman in a class of 700 men. She could appreciate what it was like to be the different one in the room, and their support emboldened me to come out early on in my life. In fact, last weekend I was at their house, and came across material from a campaign that I ran at Cambridge University as a student 25 years ago called “Assume Nothing", calling on my fellow students to assume nothing about a person’s sexual orientation. I think it has a fresh relevance today. But when I joined BCG 15 years ago, corporate culture was not as welcoming of out employees and so I found myself going back into the closet in the corporate environment. I think that was the moment I realized I was going to have to be a part of the change at the corporate level.
How do you see the current global diversity and inclusion landscape?
Most companies now understand that diversity is not only a moral imperative, but also a business imperative that improves company culture, innovation and ultimately profitability. In a BCG study, companies with above-average diversity on their management teams reported 19 percentage points higher innovation revenue and 9 percentage points higher EBIT margins.
Media and public attention has increased the awareness on diversity and inclusion which has helped engage corporate and organizational leadership and in turn grow resourcing for the topic. However, this progress is far too slow as we think about representation of women, ethnic minorities, LGBTQ employees, or employees with disabilities. This slow progress in part is because even with the attention and resourcing to make a difference, it is difficult to understand and apply what can truly drive meaningful change.
Another BCG study found that almost 100 percent of companies have a diversity program in place, but only a quarter of diverse employees feel that they have personally benefited from the diversity program. Furthermore, progress varies by country, where legal or regulatory barriers may impede progress.
I think there is a myth, that companies operating in countries where it’s illegal to be gay can’t create an inclusive environment. Actually they have clear obligations to do so, as highlighted by the UN standards of conduct for business on LGBTI people.
So all in all, I see some progress, but there is still a long way to go.
What are the different areas of diversity that organizations need to work towards? What is your advice for leaders to build scalable D&I initiatives?
Most forward thinking global companies focus on gender, ethnic/racial, sexual orientation and disability - and this is a great start. But other kinds of diversity, including work experience, age, educational background, socio-economic background, and cognitive diversity - people with different ways of solving problems - also can create a dynamic and resilient environment that will support company success.
A BCG study of 1,700 companies around the world shows that increasing the diversity of leadership teams leads to more and better innovation and improved financial performance – in this study for example, we looked at 6 dimensions of diversity (gender, age, nation of origin, career path, industry background, and education), and all of them showed a correlation with innovation. To increase innovation revenue by 1 percentage point, companies could (for example):
- Replace 2.5 percent of all managers with female managers
- Hire 1.5 percent managers with another origin than the one the company is headquartered in
- Replacing 3 percent of existing managers with externally hired managers from different career paths
For D&I initiatives there is no one-size-fits all model - underrepresented groups face different challenges at work.
Our research shows that racially diverse employees perceive the highest obstacles in advancement, while LGBTQ employees see the biggest challenges in recruiting and leadership commitment.
However, for all diverse groups to thrive, basic conditions/policies/programs must be in place, such as anti-discrimination policies or employee surveys or anti-bias trainings that are truly inclusive across all dimensions of diversity. The rewards are worth the work. Employees at organizations who are committed to diversity are three times less likely to be looking for a new role in the next three years.
As the global leader of Pride@BCG, what is your take on the progress so far in making organizations LGBTQIA inclusive? Who according to you are the flag bearers of the progress so far?
I typically see three main types of flag bearers, which are prominent in HRC’s Corporate Equality Index:
- Professional services firms (lawyers, consultants, accountants)
- Big tech companies - because of the importance of talent in our businesses. We’re in “people businesses” – we need to attract and retain and fulfill our people
- Big global brand names who are in the retail/consumer good space, like Levis, Coke, Pepsi, travel companies, because they realize that consumers care about who they’re buying products from and that company values are important
Beyond those traditional groups, we’re actually seeing surprising leadership by companies headquartered in emerging markets, where it’s harder to live openly as an LGBT person (e.g. Tata and Godrej in India, Natura in Brazil), developing LGBT inclusive workplace policies and marketing campaigns.
In fact, 40 percent of almost 100 leading multinationals headquartered in emerging markets explicitly prohibit discrimination based on sexual orientation and/or gender identity.
Many companies now have LGBTQIA networks and promote LGBTQIA diversity, but many haven’t yet focused on inclusive work environments. If employees don’t feel included as valued, appreciated contributors, they won’t bring their ideas to the table and companies won’t be able to reap the benefit of diversity. BCG research shows that LGBTQ employees feel 8 percentage points less likely to be their authentic selves and that their perspectives matter at work, and our Out @ Work Barometer shows that 50 percent of LGBTQ employees are not yet openly out at work.
The work of Employee Resource Groups needs to be embedded into the business with programs such as sponsorship, mentorship, engaging allies and pipeline planning which actively support LGBTQ people and their careers.
What are the recurring challenges that organizations come across as they endeavor to build an inclusive workplace? How can they overcome them?
I see three main challenges. First, cultural changes like building an inclusive workplace need leadership support across all leadership ranks - from the executive level where the tone is set to frontline leaders. In fact, frontline leaders - those who directly supervise line employees - have the biggest influence on employee’s day-to-day experience. If they are not committed, a cultural change is unlikely to happen. Unfortunately, this support isn’t always “even” across the organization, or doesn’t always happen - and this is a real challenge for many companies (or functions within companies).
We know from our research that over a quarter of employees believe their direct managers are not committed to diversity and inclusion - with the alarming result that employees are nearly three times more likely to leave their company, than those with consistent leadership support.
There are five specific measures to engage frontline leaders:
- Make D&I a part of the company’s DNA - integrate D&I into everything the company does - every decision, process, project, and strategic initiative. For example, issuing a clear value statement on D&I and including D&I metrics in the 360-degree feedback for all employees
- Offer ongoing leadership development programs that include training on inclusive and strengths-based leadership and overcoming unconscious biases
- Translate cultural shifts into concrete changes in daily routines
- Provide people management tools that support inclusive personnel decisions
- Communicate expectations, and hold leaders accountable for results
Another challenge is impatience. Cultural changes take time and are ongoing efforts - improving diversity and inclusion is not a one-year initiative. Leaders should not be discouraged when they don’t see positive results immediately. It's better to celebrate the progress their companies are making - while acknowledging that there is still a long way to go
The third challenge is that most companies who actively want to improve diversity and inclusion focus on recruiting. While this is important, they have to focus on all parts of the employee lifecycle - recruiting, advancement, retention and leadership commitment - to make sure there is no leaky pipeline
As organizations strive to be more inclusive and understanding of the needs and personal responsibilities of today's workforce, how challenging is it for them to measure the effectiveness of these policies, especially with the increasing focus on caregivers? What kind of metrics can be applied to measure the effectiveness of D&I initiatives?
There is one very good way to learn what employees value and which interventions they see as most effective – simply ask them.
Companies should do regular employee surveys and listen to what their employees say. It is very important that companies take this feedback seriously and act on it. Measure team outcomes, retention rates, and satisfaction - if possible, before you implement new policies and after to see how metrics have evolved, and also track utilization of initiatives.
The reason why, for instance, new flex work policies are not used by many employees may be that senior leaders don’t make use of them, which would send a powerful signal that flexible work could take a person off the track to advancement.
Conversation, understanding, advocacy, discussion, acceptance, policy changes, and finally implementation. The journey to translate diversity conversations into a living, breathing and thriving inclusive culture comes with its challenges. What according to you can accelerate this transition?
As mentioned before, consistent and visible leadership support across all levels is key. The importance of an inclusive culture should be communicated regularly, with diversity and inclusion being part of every company’s core values.
Engaging all employees, and in particular allies in the conversations and in initiatives is another great accelerator. Research we did in Canada showed that diverse employees who feel they have allies at work are 1.6x less likely to perceive obstacles and twice as likely to say their workplace is bias-free.
It is crucial that leaders role model inclusive behavior. In addition, diverse role models need to be put forward and celebrated to show viable career paths. Focus on the greatest needs in your company. Too often there is an assumption that all diverse groups need the same types of policies, or that every company is the same in terms of what they need. What we found instead was a wide spread. Figure out what are the specific diversity drivers in your company, focus on them and don’t try to address them all at once.
Can you tell us in one word what diversity and inclusion means to you?
Fulfilment. Helping people have more fulfilling lives and careers. When people feel more valued and included in the workforce, they’re more productive, the companies they work in are more productive and even at the country level we see higher productivity. Growth and fulfilment and LGBT+ inclusion go hand-in-hand.