Growing evidence connects diverse leadership and workforces with positive business performance. From a management perspective, a BCG report noted that earnings before interest and tax (EBIT) margins for more diverse organizations “were 9 percentage points higher than those of companies with below-average diversity on their management teams.” Likewise, a McKinsey & Company report found that “companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile.” And, related to ethnic and cultural diversity, the same report noted that “top-quartile companies outperformed those in the fourth one by 36 percent in profitability.” On the workforce front, a Gartner report noted that “gender-diverse and inclusive teams outperformed gender-homogeneous, less inclusive teams by 50%, on average.”
The investment community has taken notice, particularly as this causality has strengthened over time. ESG-focused investment firms as well as large institutional investors are making clear their expectations for board and leadership diversity, as well as increased disclosure of workforce and human capital data. All in an effort to build confidence in their investment portfolios for future financial performance.
While the connection between diversity and business results is not surprising to human resource professionals, only recently has the broader corporate community internalized the effects of diversity and inclusion on the bottom line. There has been an awakening of sorts in the technology industry in understanding the impact of inclusive teams and management on not only corporate success but also broad community prosperity. As a result, diversity and inclusion (D&I) programs within technology companies are being deployed across corporate engagement strategies, where supporting skills development throughout the career lifecycle and tracking progress with related goals and targets are critical to long-term business resilience.
Making the case for diversity in support of techology innovation
Merriam-Webster defines diversity as “the condition of having or being composed of differing elements.” In a business human capital context, this means the inclusion of individuals with varied backgrounds, cultures, experiences, and thoughts working together toward a common goal. These elements, when manifested in a team environment, lead to breakthroughs in speed to market, better recognition of functional improvement opportunities, and strong team problem solving. Likewise, diverse leadership provides unique perspectives to business approaches, supports quick decisioning across multiple viewpoints, and enables recognition of emerging trends that lead to new business opportunities. The potential risk of course is the opposing aspects of these elements, whereby non-diverse or -inclusive teams could possibly stagnate or limit their visibility to new opportunities if not deliberately seeking diverse perspectives, and thus miss some signals and fall behind the competition.
Unique perspectives are particularly impactful in the technology industry where innovation is the core of the business model. From a business results perspective, for example, the BCG report found a significant correlation between innovation and diverse management teams, noting that “companies that reported above-average diversity on their management teams also reported innovation revenue that was 19 percentage points higher than that of companies with below-average leadership diversity—45% of total revenue versus just 26%.”
Diversity and inclusion in the technology industry supports business results and has potential for significant positive impact on the global community. Technology can help us address the myriad societal challenges we face today. Whether it is the e-mobility ecosystem to combat climate change, medical devices to support health and human wellness in the face of pandemic, or secure communications to ensure the expediency of first responders, purposeful technologies are key to global prosperity. However, ensuring next-generation purposeful technologies rise to the occasion requires engineering and technical teams that are as diverse as the global community is. Otherwise, the positive impact could be muted. Now, more than ever before, is the time for technology companies to embrace more equitable, diverse, and inclusive workforces and leadership. If not for the company’s benefit, for global community prosperity.
However, the technology industry is traditionally less diverse than some industries. As a result, there is work to do in driving toward a more equitable workforce and leadership organizational structure. It won’t happen overnight and developing the needed skillset across the career journey is key to building diverse technology teams.
Building diverse technology teams — the career journey
Building a more diverse workforce structure requires strategic planning across the career lifecyle to enable the required skillsets, then develop individuals to thrive and transition into leadership roles. As I look that the career lifecycle, following are key approaches and considerations for technology companies to help drive a more equitable organizational structure.
- Early Education — Building interest in science, technology, engineering, and math (STEM) starts at a young age where learning engagement is the first opportunity to pique student interest in future technology careers. This makes equity in access to STEM education across ethnic, gender and socio-economic boundaries of paramount concern for companies to ensure a future diverse skilled workforce is available. This is why many technology companies sponsor STEM education programs and learning tools throughout primary and secondary schools that are traditionally underserved in this space.
- University Engagement — Once students have selected a technical path, it is important to engage them throughout their university years to help develop skills and support their transition to careers after graduation. Key to corporate engagement at this stage of the career lifecyle is a focus on technical learning, research partnerships, mentoring, tools access, and internships that transition to full-time positions.
- Assembling Diverse and Inclusive Teams — This is where recruiting is key. Technology teams looking to create a workplace that reflects the diversity of the world we live in need to actively seek diverse applicants to expand workforce representation.
- Fostering Diverse and Inclusive Teams — Once the team is in place, that is a new beginning from a D&I perspective. Companies need to be committed to creating environments where everyone can be their best selves through opportunities in employee engagement, inclusive policies, resources, practices and of course leadership support and creating an environment of psychological safety.
- Creating a Thriving Diverse Workforce and Leadership — Even with the right policies, practices, and resources in place, to ensure each individual thrives and grows takes development. Broad offerings of employee networks groups as well as training and mentoring programs help ensure the transition of diverse individuals into leadership positions while supporting prosperous careers at the individual level.
Across all these elements, bringing to the forefront diverse role models gives way to imagining a possible future from early education through the corporate career path or as a tech entrepreneur. This means that showcasing our diverse talent as innovators, technologists, scientists, and engineers tells a story in itself – “if they can I can, there is a place for me.” A great example is our Leader in Quantum computing, who as a great leader is thinking how to bring women’s voices to the emerging technology early on, and as such enabled the formation of Women in Quantum mentoring program. The role model effect is a powerful tool.
Tracking progress and making an impact
While building diverse technology teams across the career journey will help move the needle in workforce and leadership diversity, it is imperative to track progress along the way. Diversity goals, measures, and targets — just like in any enterprise program — are critical for identifying required course corrections in support of progress and ensuring efforts result in intended impacts. However, determining what and how to track diversity progress can be complicated.
Generally, setting up progress tracking starts with what is material, or significant, to the company as it relates to diversity. By engaging key stakeholders, such as investors, customers, employees and the supply chain, companies can identify where diversity opportunities and risks lay within the organization. From there, companies need to understand the current metric and standings of each diversity element. Looking at current metrics helps identify if results are on par within the industry and where opportunities exist for improvements. That leads to targeted metrics that can represent forward-progress, which in-turn lend to development of goal statements that validate what progress and success looks like. The challenge is to ensure that these are not confused with quotas or our unconscious bias interpreting them as such — aspirational goals are not mandates. We operate on the premise that if we work towards a truly inclusive environment where opportunities are visible to a broad set of diverse top talent, and we have inclusive talent management skills, we will see progress.
As an example of this approach to progress tracking, Keysight recently released a diversity and inclusion document outlining our D&I program. In addition to providing our D&I vision, strategy, and approach, we disclosed our current metrics as well as goals and targets that are based on identification of Diversity, Equity & Inclusion as a material aspect as defined in our annual CSR Report. Today, we directly track diversity key impact goals across global women hires and U.S. hires from underrepresented minority groups, with additional target measures for inclusivity training. We are proud to say that in the past year over 900 (or 50%) of our managers have gone through a Fostering Diversity and Inclusion program. The rest will follow throughout the year — that’s a big investment from the company and our people.
Continuous improvement — driving toward the future
D&I efforts play a significant role in the future of the technology industry, and the prosperity of the global community. However, the technology industry’s journey in diversity and inclusion will not be a short-term initiative. Today’s diversity goals will shift as progress is made and requires a continuous improvement management approach. The good news is that continuous improvement is something inherent in the technology industry and one that we must all embrace. We must believe that companies will see the returns and will leave a legacy of inclusion for generations to come.