Article: ‘Boards need to approach D&I like other business imperatives’

Diversity

‘Boards need to approach D&I like other business imperatives’

Nikita Singh, an Organizational Psychologist from the London School of Economics & a Talent, Leadership & Wellness Consultant, shares insights on why organizations should assiduously pursue diversity and a culture of inclusion.
‘Boards need to approach D&I like other business imperatives’

Nikita is an Organizational Psychologist from the London School of Economics with over eight years of experience in Talent Management and Leadership Assessment, Coaching  and Development. Whilst she works across diverse areas within HR and Leadership, she is most passionate about coaching mid-level leaders. She combines her work in leadership assessment/coaching with a holistic well-being approach, thereby enabling individuals to make behavior changes as well as manage their energy effectively. 

Nikita also works in the space of diversity and inclusion, specifically re-integration of women to the workforce (after maternity or a chronic illness). Her experience spans 10+ countries and diverse industries. 

In addition, she has both led and been part of multicultural teams in the early part of her career and believes that these experiences have helped her embrace the value of diversity! Recently, Nikita was awarded the ET Now Young Coaching Leader Award at the World HRD Congress 2020.

Here are the excerpts of the interview.

How do you see the gender diversity landscape in India? Where are we in the bigger picture of diversity and inclusion?

In December 2018, the World Economic Forum reported that we are 200+ years away from bridging the global gender gap. This gap is even more glaring in India which continues to lag the average and ranks 142 among 149 countries on the economic participation and opportunity factor, that forms part of the gender gap calculation. Unfortunately, women are still underrepresented at every level, and they face real barriers to advancement. Having said this, there are also a number of organizations where the needle is shifting from gender diversity/inclusion being a “nice to have” to concrete strategies to enhance both the number of women at work as well as create inclusive environments for them. 

To reap the positive effects of diversity and inclusion, CEOs and senior leaders need to take this on as a priority, and create an organizational culture/ecosystem which allows for women to flourish! 

Research shows that companies that are more diverse are more productive, more efficient and give better returns to shareholders. WhatÕs your take on this?

The key to understanding the positive influence of diversity is the concept of informational diversity. When people are brought together to solve problems in groups, they bring different information, opinions, perspectives and strengths. This makes obvious sense when we talk about the diversity of disciplinary backgrounds (for instance, we would need diversity in backgrounds to build a car). However, increasingly, research as well as results in organizations indicate that the same logic (informational diversity) applies to social diversity too. People who are different from one another in gender and other social dimensions are likely to achieve better outcomes.  

A lot of research studies, particularly those on large, innovative organizations have repeatedly shown a high correlation between female representation in leadership roles to an increase in financial performance. The other key question is – shouldn’t the Indian workforce mirror the diversity of the community we are? After all, we are one of the most diverse nations globally!

While there is a strong business case for diversity and inclusion, each company needs to find the right (strategic) diversity mix based on its unique context and circumstance

It's widely acknowledged that organizations pursue diversity and inclusion not just for ethical reasons, but also to realize enhanced business results and better financial performance. What's your take on the business case of diversity and inclusion?

So, what does diversity bring to an organization? Among other positive outcomes, a key factor is enhanced capacity to innovate. In today’s hypercompetitive business environment innovation can provide the vital differentiation across both traditional and new age businesses. A Boston Consulting Group (BCG) study found that companies with more diverse management teams have 19 percent higher revenues due to innovation. Further, in a recent McKinsey study, it has been estimated that closing the gender gap would add $28 trillion to the value of the global economy by 2025!

Therefore, it isn’t just for “good optics” that organizations should assiduously pursue diversity and a culture of inclusion. This is where the concept brilliantly elucidated by Linda Hill in her book Collective Genius becomes so relevant. She says, “At the heart of driving organizational results and innovation is the need to unleash individual slices of genius and harness them into a Collective Genius”. This is also intuitive and seemingly obvious - different perspectives on business strategy, customer preferences and product improvements could fuel a better, more productive business.

While it's the responsibility of D&I managers to ensure diversity and inclusivity, how can boards ingrain inclusion into their organizational strategy?

Boards are meant to direct the destiny of organizations towards fulfilling their societal obligations. If boards, in their wisdom, create an environment where diversity in all its dimensions features prominently in a company’s strategy, this simple step would unlock the benefits of diversity and inclusion for the organization. That is, boards need to approach D&I as they would look at any other business imperative.

While there is a strong business case for diversity and inclusion, each company needs to find the right (strategic) diversity mix based on its unique context and circumstance. For instance, does the organization need more women leaders at the mid level vs. senior level, or should the senior leadership team comprise leaders from varying industries and cultural backgrounds and so on. Boards can therefore guide CEOs and organizational leaders on the “diversity mix” that would be most productive for the business. 

D&I has never been that critical it is today. However, it continues to be frustrating and challenging for companies. Why is this gap? Why are we failing? What are the top challenges?

You’re right. Despite all the talk about D&I, there seems to be a gap across organizations. Some of the top challenges are as follows:

Diversity and inclusion as a one-time campaign or initiative: Having a policy or aligning some process to facilitate D&I is not enough. D&I needs to be well thought through – with a vision, clear strategy as well as an integrated action plan to ensure both social and cognitive diversity, as well as create a culture of inclusion! For instance, an organization may do well to hire people from diverse backgrounds. However, enabling these people to work together in a manner that allows for the strength of the diversity to shine through is critical

It is not only about a diverse senior leadership team: Yes, having the right diversity mix can lead to successful senior leadership teams. However, promoting and striving for diversity and inclusion across levels is key

Unconscious biases: For years, psychologists have found that people naturally gravitate and prefer people who are like them. It is the in-group bias. Research has also found that we unconsciously discriminate against those that are not like us – the out-group bias and it is this unconscious classification of people into the out-group that can lead to bias and exclusion. Whilst some organizations spread awareness about unconscious biases, this is often limited to episodic trainings. In addition, given many of our biases are unconscious, only awareness may not be enough. Various systemic and cultural steps will need to be taken to reduce the negative impact of unconscious biases on diversity and inclusion.

Organizations can only capitalize on its diverse workforce if they are able to leverage diverse viewpoints and experiences in their decision-making

Experts say, it's time to move beyond diversity and embrace inclusion. What is the most overlooked inclusion issue in any organization? What are some challenges in creating a culture of inclusion?

If diversity is “the mix,” then inclusion is making the mix work. The true competitive advantage of D&I can’t be achieved without a focus on inclusion. An organization can only capitalize on its diverse workforce if they are able to leverage those diverse viewpoints and experiences in their decision-making. The organization needs to create an environment where individuals feel comfortable expressing their diversity in experience and thought. 

Here are some challenges in creating inclusive cultures: 

  • The conversation seems to be more about diversity numbers and not inclusion: Whilst driving more positive diversity numbers is a good start, it is not enough. Once diverse talent is brought in, creating an environment that both helps them flourish as well as enables them to work effectively with each other is the key. Most often, goals around diversity are about “numbers” across various groups (e.g., gender). 
  • Addressing the unconscious bias challenge: A large number of organizations invest in training on unconscious biases. For the most part, these programs provide an education that people are biased in their decision making. They offer very few solutions on what to do about it, other than to be aware. An alternate solution lies in finding greater commonalities, rather than focusing on differences, so we naturally see people as in our in-group, and we include them. That is, organizations can leverage the in-group bias and the similarity principle to foster inclusion. Dr. Clay Alderfer identified two categories of groups people belong to: Identity groups and Organizational groups. Identity groups are made up of people who have some common social identity, historical experiences, etc. and Organizational groups are made up of people who share common positions within an organizational context (e.g., the executive team). Shifting the focus from “identity groups” to “organizational groups” could address the challenge around unconscious biases 
  • Creating a culture of diversity will require the role of leaders to shift: From setting direction and articulating a vision to building a community where everyone feels a sense of psychological safety and belongingness. Secondly, leaders need to build the organizational capabilities necessary for leveraging diversity – i.e. the willingness to listen to diverse views and integrate these to create impactful solutions.

A study by BCG on gender diversity shows that 91% of companies have a program in place, yet only 27% of women say they have actually benefited from it. How can businesses get the most from the diversity dollars?

  1. A comprehensive, holistic approach to inclusion vs. a piecemeal one: It is one thing to hire an increased number of women across levels, and another to ensure processes/systems are integrated to create the required change. For instance, how does the organization’s approach to leadership development need to change given its focus on diversity? Or when women return to work from either maternity or from a chronic illness, is there a structured re-integration process for them to settle in as well as eventually return to a state of high performance? 
  2. We often talk about the “glass ceiling” that prevents women from reaching senior leadership positions. In reality, one of the biggest obstacles that women face is much earlier in the pipeline, at the first step up to manager. McKinsey’s study “Women in the Workplace 2019” found that whilst the percentage of women at the senior level have increased, there is a “broken rung” at the entry level. This early inequality has a long-term impact on the talent pipeline. Therefore, it will help companies to set goals for getting more women into first-level management and support the growth and development of these women
  3. Personalization is imperative: As with any other program, a one-size-fits-all may not work for diversity initiatives either. Organizations will benefit from combining their current diversity programs with one-to-one, personalized support to women. Even among a group of women leaders, there could be personality/behavior differences
  4. Addressing the “double bind” that women face: A large number of research studies indicate that when women exhibit traditionally valued leadership behaviors such as assertiveness, they tend to be seen as competent but not well-liked. And those who come across as warm, that is, display a more stereotypically feminine style are liked but not seen as having valued leadership skills. This “double bind” needs to be addressed by both organizations as well as individual women leaders itself.

Leaders need to build the organizational capabilities necessary for leveraging diversity – i.e. The willingness to listen to diverse views and integrate these to create impactful solutions

How do you see inclusive leadership and what are the top traits of an inclusive leader? How can companies ensure they have leaders who can create impact in a diverse workforce?

Some of the top traits of inclusive leaders are as follows:

  • Awareness and Empathy: An inclusive leader is aware of his/her own as well as others’ strengths and development areas. He/she has the emotional intelligence and awareness to acknowledge unconscious biases and values differences
  • Vision: Inclusive leaders have a clear vision of how they can leverage diversity for the competitive advantage of the organization, and strive to build a culture 
  • Promote constructive conflict: An inclusive organization is one where individuals are willing and able to accept each other’s viewpoints. A leader’s role would therefore be to enable this culture as well as integrate seemingly different, yet complementary views to shape strategy and drive growth
  • Foster Psychological safety: An inclusive culture is one that allows for moderate risk-taking, creativity, and challenging status quo across levels. Leaders play a crucial role in creating this culture – through an authentic, warm style of leaders, encouraging participation as well as “walking the talk”. Walking the talk could be about acknowledging own mistakes or going up to a young manager and asking him/her about views on strategic initiatives. This also implies that behaviors like insecurity and/or ego-centricity may impede the creation of psychologically safe (inclusive) environments
  • Nurtures the strengths and capabilities of teams/individuals: Identifying the towering strengths of individuals/teams and allowing them to leverage these strengths is a behavior that enables the creation of an inclusive and high performance culture within an organization

To ensure leaders exhibit such behaviors, organizations could: 

  • Define/re-define critical leadership behaviors based on which leaders are hired or promoted
  • Provide leaders with experiences that help them understand the power of diversity (both social as well as cognitive) – for instance, a role in a team with multiple nationalities in a different country 
  • Encourage frequent, real-time conversations as well as self-reflection– This can help people understand each other, enhance curiosity & empathy (vs. blame)

Millennials are curious and open-minded. Not only do they view diversity as gender, age or race related, but also see it as varying experiences and different perspectives/ideas

Where do you see diversity and inclusion five years down the line?  

What is today a “nice to have” is likely, over the next five years to become a compelling, all-encompassing need in organizations. I believe that we are approaching a tipping point driven by the snowballing growth of millennials and Gen Z as well as the changing nature of work itself. Millennials are curious and open-minded. Not only do they view diversity as gender, age or race related, but also see it as varying experiences and different perspectives/ideas. Organizations will have no option but to embrace diversity in all its manifestations rapidly. I hope that research studies about the impact of D&I are not only related to the correlation of increased diversity/effective inclusion with performance, but also directly address the causality – through both quantitative and qualitative methods (such as real stories and experiences) as well as longitudinal studies over a 12-24 month time frame.

 

 
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Topics: Diversity, #EachForEqual

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