… at least in the West, according to some studies. But geographics aside, diversity just makes business sense, argues this contributor.
Any organization’s leadership should reflect its employees and its key stakeholders.
Imagine if a sports management company’s entire leadership team comprised former professional hockey players. That leadership team would be well-versed in all aspects of standing up and managing a professional team, and it would understand aspects of player recruiting and management, team dynamics, facility requirements, schedule logistics, and so on.
However, would that leadership team be in the best position to understand the requirements and subtleties of golf? Or cricket? Or gymnastics? Or refinancing fixed costs such as stadium ownership during, say, a pandemic?
Clearly, the depth of its hockey experience does not provide the breadth of knowledge required to make the best decisions for the company.
Leadership diversity linked to growth
In 2018, the Boston Consulting Group published a study about how having diverse leadership teams can boost innovation, concluding that: “The biggest takeaway is (that there is) a statistically significant correlation between the diversity of management teams and overall innovation. Companies that reported above-average diversity on their management teams also reported innovation revenue that was 19% higher than that of companies with below-average leadership diversity—45% of total revenue versus just 26%.”
The study went on to measure the gain in ‘innovation revenue’ when leadership teams have more diversity via national origin, gender, hires from other industries, and external hires.
Also in early 2018, McKinsey published a report that investigated the link between diversity and company financial performance. In the section on gender diversity, it shared some very interesting findings: “For gender, the executive team shows the strongest correlation. We found that having gender diversity on executive teams, specifically, to be consistently positively correlated with higher profitability across geographies in our data set, underpinning the role that executive teams—where the bulk of strategic and operational decisions are made—play in the financial performance of a company.”
The Synopsys diversity and inclusion DNA
As one of the leaders on the Synopsys corporate staff, I am part of the executive team. Like many companies, Synopsys has a focus on inclusion and diversity. This focus starts from the top; senior leadership looks for ways to enhance diversity across the organization. Our own Synopsys 2020 Inclusion & Diversity report shows our progress in four key metrics: percentage of total workforce, percentage of technical talent, percentage of total talent, and percentage of total external hires.
These KPIs are important, but measuring is not sufficient. Each senior leader sets objectives around diversity and inclusion on an annual basis, works on those objectives throughout the year, and reports to Synopsys’ co-CEOs. We practise four steps to improve diversity and inclusion in the work environment as well:
- Move the needle: Identify groups in which diversity is lacking, and then work with that leadership team to build a plan to narrow or remove the gap.
- Reflect diversity to build diversity: When hiring, ensure that your interview panel is diverse. If you are a leader of an organization, ask hiring managers how many diverse candidates were considered in the candidate pool.
- Use diversity even if it slows you down: If your team is getting stuck in decision-making, engage someone from another group who brings a different perspective on the problem. It may feel like you are slowing down the process by bringing in an outsider; however, you will likely end up with a better outcome.
- Make inclusivity a culture: I find that the quiet person in a meeting often has a gem to share. They just need to be drawn into the discussion. When you are running a meeting, ensure that each voice is heard.
Leadership sets the tone on diversity and inclusion. Wherever you are in your organization, be that leader.