The Impact of Inclusion

Why a culture of inclusion is a critical underpinning for leadership diversification.

Efforts to diversify the leadership of global companies are at best works in progress. We have made some headway in recent years, but surveys show organizations still struggle to move forward, particularly at the highest levels of the decision-making hierarchy. Women ran just 4.8% of the companies on the 2022 Fortune Global 500 list. In 2022, 88.8% of CEOs, CFOs, and COOs across the U.S. were Caucasian, and 88.1% were men, recent research shows.

Ageism is also an impediment to building a progressive work culture across the world. For example, a recent survey of 3,800 employed and unemployed workers and 1,404 hiring managers in seven countries cited by McKinsey found a pattern of bias against workers aged 45 and older across geographies.

We need more diverse decision makers. The business case for diverse leadership is well established. Put simply, it’s the right thing to do, and it results in better business outcomes. According to executive search firm Korn Ferry, “diverse and inclusive organizations are 70% more likely than their peers to capture new markets.” We live in a world where diverse people, skills and thoughts are critical to our success.

The challenge companies face now is how to institute the cultural changes that engender diverse leadership at the top. This isn’t a one-off proposition: It represents a commitment to transform the way we work; the way we recruit; how we grow and develop employees; and how we measure employee performance. At the core, I argue we need to build a culture of inclusion to transform the makeup of leadership at the top.

I want to be clear that by referencing diversity, I’m talking about every form of it — including ethnicity, race, sexual orientation, gender, gender identity, personalities and neurological characteristics — along with diverse educational backgrounds, age categories and more.

How do we nurture greater diversity at the top?

Leaders aren’t born. They are grown and nurtured through the intentional actions of organizations, particularly the C-Suite and the board, and all the way down to line managers. If you look at diversity, equity and inclusion, inclusion is a foundational pillar. Recruiting diverse candidates is table stakes, but without an inclusive culture, we can’t develop and retain top talent. We have to build our leaders by providing them with the tools to advance.?

Here are a few steps organizations and leaders can take to help build a culture of inclusion and position employees for advancement:

Promote on potential. We need to invest in our future leaders by giving them the opportunities to grow. As managers, we may be trained to promote someone based on past performance, but we also need to promote individuals based on the potential they show. This means we need to trust people — including reaching out to those with whom we may have less of a personal affinity. And not everyone is going to step up and say they’re ready to take on the challenge of a more senior role, or marquee project. As leaders, we need to recognize where there is potential and give people opportunities to shine, trust them to use their skills and build solutions. Performance reviews also need to evolve beyond the traditional one-and-done meetings and evolve toward an ongoing productive conversation about growth.

Address the pay gap. According to data from the U.S. Department of Labor , on average, women working full time are paid 83.7% of what men are paid. This inequity is even greater for Black and Hispanic women. In addition, a recent analysis of the U.K. government’s pay gap reporting found that the gender pay gap stood at 9.7%. Diversifying the pool of talented leaders will make a difference. If we have more women and minority team members in the higher echelons of organizations, I believe we will go a long way in addressing this gap. Leaders also have to regularly review pay data, identify and address gaps.

‘Normalize’ a diversity of perspectives among employees. If the post-pandemic workplace is a more flexible one, we need to embrace a much bigger tent of perspectives to ensure every single employee feels comfortable, happy at work, and fully prepared and expected to contribute to the organization’s success. Whether teams are working remotely or in offices, it’s on leaders to ensure all voices are heard and incorporated, including those that aren’t the loudest. We have to get away from a bias toward what’s perceived to be similar to us and embrace perspectives from employees from different backgrounds and generational categories. Travel is also an enabler: The privilege of working with colleagues in the U.K., Ireland, India, Singapore, Australia and beyond has taught me the value of diversity and inclusion in my personal and professional life.

Build a culture of mentorship beyond what’s covered by traditional programs. Mentorship is a critical part of helping people advance and should be done proactively. But there’s tremendous value in ‘reverse mentoring,’ in which junior employees coach more senior ones on a range of topics relevant to their experiences. Everyone can learn, regardless of where they fit on the org chart.

Hold senior leadership accountable for the results. The board and executive leadership teams need to take accountability for implementing an inclusionary management approach. Managers across the chain of command also need to play a key role in making sure these goals are achieved. In our firm, for example, we track the diversity of hires and the retention of employees. We also monitor how well management-initiated moves are empowering team members to advance. We carefully analyze and monitor data around promotions. Among the questions asked internally are: Are there observable trends? Are there gaps that need to be addressed? We need to pose these questions continually at the leadership table.

Inclusion may seem intangible, but it is measurable, can be improved and is a tremendously important foundational principle that will help grow and maintain a diversity of leaders across the organization. But without an intentional approach — with clear milestones everyone in senior leadership must meet — we won’t meaningfully achieve the cultural transformation required for success.

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