Promoting Diversity in Leadership Teams

A future-proof leadership team must be a diverse leadership team. 

Diversity has been shown to have a significant impact on business performance. Research found that companies in the top quartile for racial and ethnic diversity are 35% more likely to generate returns that exceed their industry average, while those in the top quartile for gender diversity are 15% more likely to do the same.

But promoting diversity is about more than just financial performance. Diverse, inclusive teams are better able to think and act “outside the box”, which can be crucial to driving substantial change within a leadership setting. As Maria Ferraro, Siemens’ Chief Financial Officer of Digital Industries and Chief Diversity Officer, explains:

“Diversity and inclusion are not only nice to have; they are crucial for the success of our businesses. Diverse teams are more successful overall because they ultimately drive more creative and innovative solutions.”

What’s more, diverse leadership teams are – inevitably – better placed to understand and address the needs of demographically and geographically disparate customer bases. As the world becomes ever-more connected, leaders will need to position their organisations to effectively service wide-ranging markets. As Mattel, the multinational toy manufacturing and entertainment company, puts it:

“We understand that a culture rich in diversity is key to business success. It allows us to better understand the business opportunities in various markets around the world, and develop products that resonate with consumers in diverse cultures."

How to do it

Few companies actively seek to build non-diverse teams. More often they simply lack an understanding of how to tap into more diverse talent pools. What’s more, unconscious biases – around everything from age and gender to weight and disability – mean that interviewers are often inclined to hire a certain type of person. 

Even those who have been trained to reject subjectivity are not immune from unconscious bias. In a landmark Yale University study, male and female scientists were asked to review job applications from identically qualified male and female students; both men and women were more likely to hire the male candidate, while also rating him more competent than his female counterpart. They were even willing to pay the man $4,000 more than the woman.

While the specific steps required to promote diverse leadership will naturally vary from one organisation to the next, the following general points are widely applicable:

• Define diversity: The word “diversity” is most frequently applied to gender, race and religion, but this only tells part of the story. Other aspects – such as age, disability, personality and sexual orientation – are equally significant, and should not be overlooked.
• Set clear success criteria: When building a talent pipeline, be specific about what a “good” or “great” candidate looks like, and discard irrelevant criteria that may have clouded previous hiring decisions. 
• Think about the team, not individuals: It is impossible to build a diverse team while only thinking on an individual level. Rather than focusing on individual brilliance, seek out people with complementary skill sets and personalities. Any other approach runs the risk of hiring more of the same type of talent.
• Assemble a diverse interview panel: It becomes far harder for organisations to recruit diverse talent with homogenous interview panels. Intel saw its diversity numbers improve significantly after requiring that all interview panels include at least two women and/or members of underrepresented communities. Before the measure was introduced, 31.9% of new hires were either women or people of colour. Within two years, this proportion had increased to 45.1%.
• Retain diverse talent: Diversity efforts must not focus simply on the recruitment process; it is vital that equal attention is paid to retaining diverse talent. As well as making the necessary adjustments to onboarding processes and investing in leadership coaching, organisations should ensure that new hires have regular opportunity to vocalise the challenges they are facing and identify solutions.

At Morgan Latif, we help our clients to unlock the business benefits of diverse leadership teams. From promoting female leaders and BAME candidates to advocating for more HR leaders to take a seat in the boardroom, we are passionate about championing candidates with diverse backgrounds and skill sets. Need our help? Let’s chat.