How should businesses go about change, in a world where diversity training actively reduces diversity by up to 9%?
Darren Thayre
CEO Advisory | Professor of AI & Digital Innovation| Advisor to G20 | AI Innovation/Digital Ventures | Chair and Board Member
This short series of three articles applies some transformation and innovation thinking to an issue in desperate need of drastic solutions.
In October 1903 a group of leaders met in Manchester, England to discuss change in their area of operation.
They surveyed the status quo. Performance was unacceptable. Change was slow, or non-existent. Minor, incremental tweaks were getting them nowhere. Something different was needed.
The group moved towards a strategy that it was felt would have more impact. Major change would not come from minor operational tweaks. Major change needed disruptive thinking. To innovate from where they stood to where they wanted to be, they had to take action and think big.
Amongst the group of leaders were Emmeline and Christobel Pankhurst who adopted the motto “Deeds, not words”, to show that change would come from taking action.
The group called themselves the National Union of Women’s Suffrage. They would later become known as The Suffragettes and ultimately their actions led to women in Britain finally being allowed a democratic vote.
In part one of this series we explored the reasons why the current pace of change means it will take 217 years to close the workplace gender gap. In part two, we looked at why businesses should care and why businesses with more female representation deliver 34% greater returns to shareholders.
Now comes the how.
If we all accept that the pace of change is too slow and that businesses should want to change because they will become better-performing businesses, then the only remaining question is how to create the needed change. Clearly, given the evidence we’ve looked at, a big part of the problem is that what’s currently happening isn’t working.
What’s not working - diversity training reduced the percentage of black women in a management role by over 9%
Over a five year period, looking at the three most popular diversity programs (diversity training, job tests and grievance systems), across more than 800 companies, Frank Dobbin and Alexandra Kalev found decisively that each program not only failed to improve diversity, but actually produced a negative impact.
The number of black women in management roles, in organisations that had undergone a diversity program fell by 9.2%. Companies that introduced job tests saw white women in management roles fall by 2.7%. In fact, no matter which program or demographic the researchers looked at, all produced falls in diversity across the board.
Is it any wonder the pace of change is so slow when three of the most popular ways large scale organisations tackle diversity issues actively hinder diversity efforts?
The first part of the ‘how’ then is that the go-to methods are not part of the picture. Instead, we need big, innovative ideas, communicated clearly. We need ‘Deeds, not words’.?
This is in line with organisational transformation thinking. McKinsey tell us that 70% of transformations fail, but, if there is a clear ‘big picture’ narrative to the transformation, which the CEO communicates clearly, then that statistic can change to an 80% success rate.?
Sodexo: When the answer is something more
In the early 2000s, Sodexo, a multi-billion dollar, multinational, facilities business, was sued for discrimination, in a class-action lawsuit, which it eventually settled for $80 million.
In terms of diversity efforts and outcomes, it would probably be fair to say that Sodexo was in a worse place than most businesses. How could they change? As a large corporate, perhaps diversity training, job tests or grievance systems were the answer.
Instead, Sodexo started thinking big and thinking innovatively. In response to the lawsuit, Sodexo eschewed the usual diversity training and hired a dedicated Chief Diversity Office, whose mission it was to make diversity a part of Sodexo’s culture. Not just fix the issue. Not just do some training. Make Sodexo a pro-diversity organisation, arguably the opposite of how they were perceived at the time.
This was a cultural and transformational approach, which is exactly how the change was viewed and communicated within Sodexo. In 2015, the CEO described the change that needed to happen like this:
“Greater diversity and inclusiveness are part of a cultural transformation that requires time and humility. It needs a set of clear, measurable, and attainable long-term objectives for management. Teams must be held accountable and accountability cascaded through the organisation. We all know that without targets, nothing gets measured and nothing changes.”
Today, Sodexo recently celebrated the 14th straight year of appearing on DiversityInc’s Diversity Leaders list. In 2022 they were awarded a DiversityInc Hall of Fame award for their diversity efforts.
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Sodexo are the perfect case study for our three part approach. Though, for this company in particular, the road to change has been long, it has also not been drastically difficult to achieve. Firstly, Sodexo recognised that change needed to happen and that the change they required was not happening quickly enough. Then they highlighted a business case for the change. Sodexo regularly write about diversity, including detailing why companies should care about the topic because of the financial impact. They also measure diversity success using five familiar scoring metrics, including operating margin. Then they set about the ‘how’, not by way of diversity training, but by following a big idea that took them from diversity pariah, to diversity leader.
How can other businesses do the same thing, with relatively simple changes?
3 practical, transformation ideas to try today to make your company more gender diverse
Make a personal, public commitment to improving gender diversity to a stated level
When we commit to things in public, whether personally or professionally, we tend to be better at sticking to them, because we are aware that we may be held accountable for the commitment made. This is also true for businesses. When a business says ‘we are committed to gender diversity’, that isn’t news and it is easy for that commitment to fall by the wayside. When a business CEO says ‘I am personally committed to improving this company’s male/female management team ratio to 50/50 within the next two years’, that’s something that can inspire, generate action and lead to big ideas.?
Tie executive pay to your gender diversity target
CEOs, C-suites, executives and management are busy people. Sometimes transformations fail to happen because they simply never reach the top of the agenda or ‘to do’ list (see this article on ESG initiatives). How do you force transformation to the top of list and start to generate innovative ideas? Targeting yourself or your team, or both on delivery of transformative goals is a good way to communicate that something matters to you and to the company and should therefore matter internally as well.?
Get ideas from your team - create a diversity board
You can see some responses to a question on my LinkedIn regarding diversity efforts here. Not a single response suggested diversity training. Once you have communicated that diversity is important, how do you follow that statement up with actions: ‘Deeds, not words’? A junior board - in this case with a specific diversity remit - can work. Those appointed have direct access to the real board. Their role is to help rollout diversity initiatives and feedback to the board on what’s working and not working throughout the company.?
A ‘day without women’, sponsorship not mentorship, fix your board first and more…?
As mentioned above, the responses to this LinkedIn post featured an overwhelming array of innovative, genius initiatives, ideas and fixes to address gender diversity. To finish this series, here are just a few of my favourites (but please do go and read the rest and then consider trying a few in your company).
Shooting your moonshot
Google has a team called ‘X’, whose job it is to approach really big, societal-level problems with new, big idea thinking.
“Moonshot thinking”, the team’s website says, “is about pursuing things that sound undoable, but if done, could redefine humanity.”
Their approach and way of thinking and working are far different from the ‘average’ business, which is why they operate entirely separately from Google and why they are tasked with huge challenges.
Moonshots exist in the middle of a Venn diagram, where a huge problem overlaps a radical solution and breakthrough technology.
Usually, in the background, there is some level of business opportunity.
Given all that we have discussed in these articles about gender diversity, the commercial opportunity for businesses, the obviousness of the issue, the impact it has on vast swathes of businesses and individuals, it is easy to wonder if solving diversity issues is a moonshot.
If it is, if businesses were really serious about solving diversity, if we embraced radical thinking and gave our innovation teams some space to consider a gender diversity moonshot, you wonder what the outcomes would be.
The answers to my LinkedIn post suggest that the ideas would be quite something. And, to me, given that this process started with me worrying about my daughters’ future, they also suggest that there is hope yet.