18 minute read
D I vers I ty
KAte BArKer
Driving diversity and inclusion: Role of Chairs and CEOs
The demand for D&I leaders has skyrocketed as companies rush to deal with racial divisions and inequities within their organisations
The case for diversity in corporate leadership has never been stronger. In recent years, women have made gains in leadership, especially at senior levels, but the pandemic continues to have a negative impact. They are significantly more burnt out than men. Despite the added stress and exhaustion, women are rising to the occasion as stronger leaders and are doing more to support their teams and advance diversity, equity, and inclusion efforts.
A McKinsey report of 2021 finds that companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability. Many business leaders believe that having a diverse set of viewpoints is the best way to maximise defences against relentless disruption and diverse representation has been steadily increasing, the pace of change remains too slow relative to the challenges that businesses and society face—a clear indicator that there is still much to be done.
The path forward is clear. Women leaders who are driving progress must be recognised and rewarded. They also need to do the fundamental cultural work necessary to build a workplace that values all women equally.
The events of 2020 put extraordinary pressure on companies and employees. The COVID-19 crisis shook the economy and turned people’s lives upside down, both at work and at home. A heightened focus on racism and racial violence triggered a reckoning on diversity, equity, and inclusion. Companies’ current priorities reflect these changes: there has been an overwhelming recruitment drive for diversity and inclusion (D&I) Leaders as companies demonstrate their understanding that D&I is one of their key areas of focus.
U.S. companies are rushing to hire chief diversity officers or elevate existing leaders to the position in the midst of pressure to address racial divisions and inequities within their organisations. The role has long been marked by high turnover, with many in the position,
known as CDO, leaving over a lack of resources, unrealistic expectations, and inadequate support from senior executives. Roughly half of S&P 500 companies employ a chief diversity officer, and a 2019 study by Russell Reynolds found that 63% of diversity chiefs in the S&P 500 had been appointed or promoted to their roles within the past three years.
So why is progress still painstaking, so slow?
To learn more, I spoke to nearly 60 directors and senior executives in 2021 at large global companies across 10 countries who have helped foster change in their organisations. They consistently emphasised the critical role that the chair and CEO play in driving D&I in the workplace, specifically in terms of creating inclusive environments where everyone can thrive. From their insights, there are three sets of takeaways, detailing how chairs and CEOs can drive progress on the agenda.
Change starts at the top
As board leaders, the Chairperson can model an ideal culture within the boardroom by:
Ensuring that the board
itself is diverse, including women, minorities, and diverse points of view; engaging in creative efforts to build the board candidate pipeline; and eliminating bias from the ideal director profile. Every member of a board can affect D&I efforts, however, board chairs have the most direct opportunities, as they are responsible for managing the composition of the board, running meetings and setting the board agenda. When the chair uses these functions to create an inclusive environment for the board, it becomes a model for the CEO and the rest of the organisation to follow.
Most of the time, we talk about boards and executive committees as setting the tone; I think it’s more important when they set the example. The obvious and
often uncomfortable starting point is to take stock of how visibly diverse a board is. For better or worse, the composition of the board sends a strong signal about what the company values. To be effective, the group has to attain a critical mass of diverse viewpoints rather than simply including a symbolic woman or other minority representative. My own experience is that when you are a lone female on a board, you are seen as a female voice. Once you reach a critical mass of three or more female directors, you are just seen as a voice; gender is no longer a factor.
Creating an inclusive
boardroom environment
that fully harnesses the benefits of a diverse board and encouraging all board members to contribute and constructively challenge assumptions and perspectives. Just hitting certain numbers isn’t enough. To maximize the value of a diverse boardroom, a board chair must also create an environment that encourages participation from all members. Chairs who are able to truly get the best out of all the voices in the room tend to be genuinely curious about different points of view and experiences. They identify which voices are not being heard and actively create an environment in which everyone can meaningfully participate in the conversation.
Setting the tone that D&I is important to the
organisation by keeping it on the board agenda, asking the right questions and monitoring the relevant data. Chairs and boards can and do have a direct impact on the success of D&I within the organisations they serve. The tone is hard to see or measure, yet it is a powerful tool with which chairs and board members can play a crucial role in advancing diversity and inclusion practices in the organisation. Through the behaviours and priorities, the board chooses, directors can and do have a significant ability to create change. The nature of a non-executive director’s role is to raise important questions with management. When board members make it a habit to regularly probe for details about efforts to improve diversity, they will encourage the CEO to pay more attention to it. That means asking direct and meaningful questions about the development paths of diverse talent and ensuring that they have the skills and exposure within the organisation to reach the top.
Chair and CEO partnership
Within organisations that lead the way on D&I, the chair and CEO are aligned on the importance of the topic. Together they:
Embed D&I into the organisation’s strategy
and empower and remunerate the business to prioritise the topic alongside other business KPIs and objectives. This partnership can make a real difference in terms of progress, as it shows the rest of the organisation that diversity is something both the chair and CEO prioritise.
Make a shared commitment to role-model purposeful, authentic and inclusive leadership for the rest of the organisation. While the business case for D&I is powerful, it is the combination of the economic case and committed leadership that changes behaviour. The chair and CEO need to articulate this message authentically and personally, explaining it not as an initiative on the side but as part of the underlying culture of the business. If the company’s top leaders are simply checking boxes to comply with external pressures, the company is unlikely to achieve inclusivity and harness the benefits that diversity presents.
CEO delivers results
While the chair and CEO can partner on tone-setting and making D&I a strategic priority, it is ultimately the CEO’s role to deliver results. The best CEOs:
Gather data and set targets to ensure diversity across the business.
This means going deep into the data around hiring and promotion decisions at all levels across the firm, analysing roadblocks and being transparent about success and failure in meeting targets.
What gets measured gets done. When I designed the D&I for a large $32b global technology organisation, I spoke to two Board members responsible for D&I that we were well below the target. Within 6 months we made 6 years of progress to close the gap. Such targets especially when publicly communicated create focus and the necessary impetus to change. When there is more pressure, people need to act on it, and that does tend to work in driving diversity.
Put structures and policies into place that encourage inclusive working environments and that provide diverse talent with the support systems they need to be successful within the organisa-
tion. Policies and structures that help to create inclusive working environments, such as mentoring and sponsorship, are critical to success. The barriers for diverse talent are a lot higher; mentoring and sponsorship are crucial to overcoming those barriers.
Naturally, it’s essential to understand what programs will be most meaningful and effective within a particular organisation. We have recently seen the rise of parental leave policies expanded to include new fathers and flexible working arrangements for entire workforces.
Coach and mentor leaders with the recognition that diverse teams require different management skills than homogenous
ones do. Increasingly, leaders are recognizing that a bumpy transition period is an inherent part of moving toward diversity—and that many leaders need coaching and mentoring to manage through it. As the ultimate role model for inclusive leadership within the organisation, a CEO must not only learn how to do it, well but also be proactive in helping other leaders learn similar skills.
For all the challenges associated with corporate D&I efforts, the benefits that accrue to companies that meaningfully cultivate diversity and inclusion are too great to ignore. Diversity is vital to future-proof businesses and create organisational resilience, enabling organisations to more effectively mitigate risk and capitalise on a wider range of opportunities. As we look forward, it is the ability of leadership to create a culture and environment where the power of all forms of diversity can be fully realised that is the critical differentiator, and it will be one of the defining leadership attributes for the next generation.
about the author
KatE BarKEr is an HR Futurist, Global Chief People Officer & Board Advisor, UAE Federal Government.
Good performance is about clear objectives, not about appearances
What someone's time spent in the office looks like from the outside is less important than whether they are doing their best work for the organisation with that time. Melissa Dreuth, Chief People Officer of Planful, tells People Matters about how the way people view performance is changing
by Mint Kang
Set clear objectives, communicate them well, and look at what people need to meet those objectives; anything outside that, such as working hours, is a distraction from the real business of doing good and competitive work.
In a conversation with People Matters, Melissa Dreuth, Chief People Officer of cloud financial planning and analysis platform Planful, talks about the connection between productivity and expectations, and the importance of equipping people with the skills to perform well in the hybrid world of work. Here's what she said.
Tell us about your take on productivity. Where do you think we are now?
The concept of productivity really comes down to expectation setting. You want employees to feel like they can bring their whole selves to work, but there also need to be some expectations: this is our mission, this is the the goal for your job, this is when we need it to be done by. What we did
was introduce OKRs (objectives and key results) to create transparency around our corporate objectives, then built department objectives out from there to align the teams and make the tasks more digestible.
Once you build on those expectations and objectives, you will have a clearer picture of whether people are doing their best work and what else they might need. That picture also depends on the role. For some roles, maybe that of an engineer, or maybe someone in sales, the tools they're already using to manage their projects and products will also track their progress. For other team members whose work is less measurable, it boils down to whether that person feels like they are doing their best work. Can they go to bed every night and wake up every morning feeling like they have given 110% of themselves to the job, and the product that they produce is the very best that they can?
When you get to this point, what their best work looks like from the outside actually becomes less important. For some people it could look like the traditional nine to five hours. For others, it could be nine to one, and then stepping out to take care of children for a few hours and coming back to work from six to nine. And it doesn't make a difference, because that's not actually what we're looking at. What we care about is that our employees are motivated to do great work, that they're able to do their best work, and that we're releasing the best product for the market.
What's your take on the impact that remote and hybrid collaboration has had on the traditional productivity and performance concepts?
Before the pandemic, there was a quote going around LinkedIn to the effect that if you don't trust someone to work from home, you should never hire them. And that is so true right now. But it is also very much an evolving process. When a team is not performing, it's natural instinct for the manager to say 'We need to get together in the same office, because we're missing things along the way'. It may be a kneejerk reaction, because we've been conditioned to believe that we do better when we can physically see each other. But at the same time,
we do realise that we are missing the in-person collaboration.
What we've done is to get the executive team together once a month, and the extended leadership team together once a quarter. We always make sure to do it at an outside venue where we can have a good balance of work and socialisation, and that has been really helpful for us. And while the focus is more on bringing the executives together here, we also want to empower our managers to do that for their teams.
Do you find there are certain qualities, maybe in the business culture or in the leaders and managers, that help this model to work more smoothly?
There is trust of course, as I mentioned. But you also need to look at your hiring profile. You want to be hiring managers and employees who have a high degree of autonomy, but also ownership and accountability. And then you have to make sure that your internal communication is good. You need to explain the role of the employee, the role of the manager, even the role of the job, and then people feel empowered and have a lot of ownership in the work that they're doing. It only works if people feel that they are connected to the company values and mission, that they know what role they play in the company structure.
If you look at those horror stories about the remote or hybrid model failing, you see some common issues, such as companies that thrived being remote but suddenly called all the employees back to the office without properly explaining why. Or you might find that they hired people who aren't used to working from home.
On the issue of people not being used to working from home, what are your thoughts on easing these people into the new working model? Do we need to train them in a hybrid-specific set of soft skills?
Yes, a big part is identifying the skills that are needed to do the job in this particular way. And in the hybrid or remote context in particular, if you've never been exposed to this way of working, it's so very different. My heart goes out to any fresh college graduate who had to get their first job in the pandemic, because the expectations and the style of management are not at all going to be what they might have learned to expect.
On the training end, I think it's something that companies need to prioritise regardless of where you are in your career. We have
employees who are everywhere on the spectrum of life, and remote work is very new to a lot of them. And we have a very heavy Slack culture at our company. So in the onboarding boot camp, we actually do one-on-one Slack training to teach people how to use the statuses, how to show others where they are, how to interact a little bit better, and so on.
I think that as long as you are taking the time to set people up for as much success as possible, and giving them the tools to be successful in your company, they will be able to settle into the new world of work quite well.
Helping people to adapt is actually a big part of inclusion, and it helps contribute to diversity as well. How is that working out at Planful?
I mentioned the approach we take to hiring and onboarding, the way we look at the fundamentals and the transferable skills that people need – what's coachable and what's not, how we can leverage that for the workforce. Here's an example, we hired someone who had been a teacher for the last 15 years and wanted a change, but she'd never worked in a corporate environment before. I sat down for coffee with her and at the end of the conversation I hired her on the spot. She had so many transferable fundamental skills: educating people, bringing them along on the journey. She had never worked with a software company, but software and Slack are all teachable.
If you look at our initiatives, we prefer to focus internally As long as you are taking the time to set people up for as much success as possible, and giving them the tools to be successful in your company, they will be able to settle into the new world of work quite well
rather than talk about it externally, because of where we are on our journey. The example I'll use is the George Floyd protests. We could have easily posted something, changed our logo, done all that. But the reality is we didn't have good internal representation in our team. And we didn't do a lot of education up until that point about what does inclusion look like. So instead of just checking a box, we really focused on educating our team working with our recruiting team to have a more inclusive environment, because you can have representation, but it's those people who don't feel included in your company who you really need to pay attention to.
The Evolution of Diversity
Diversity, equity, and inclusion have broadened far beyond the initial push for representation. Today, DE&I has advanced to include supporting people according to their individual needs and circumstances. Let's keep expanding our horizons
The definition of diversity, equity, and inclusion (DE&I) has evolved rapidly in recent years, and so has the approach to it. We have advanced from the initial step of trying to balance representation and eliminate various types of bias in the workplace, to a much broader move to support people based on their individual needs.
Undeniably, the events of 2020 were a great accelerating factor in this shift. The pandemic forcibly pushed people to accept and understand the vast range of circumstances under which their fellow team members worked. But even before that, organisations' understanding of bias and representation was already evolving, with broader social movements such as #MeToo and Black Lives Matter spreading internationally and finding echoes around the world. Like a matryoshka doll with layers nested one within the other, the push to meet initial goals such as achieving gender and racial parity in the workplace, or putting a stop to bias-driven harassment and unfairness, uncovered more and deeper needs.
To mention just a few: the need to rethink entire systems such that bias can be minimised; the need to make workplaces not just representative but wholly inclusive; the need to tangibly show the connection between diversity, equity, and inclusion, and the ability of an organisation as a whole to perform well.
So it has been a natural next step to look more deeply into the idea that people's individual challenges are not just personal idiosyncrasies, but something that the organisation actually has a stake in overcoming and a responsibility to support them through.
The journey is a long and complex one. Technology has played a major role for many organisations, enabling to track the success of their DE&I efforts and link these efforts to a business case. Acceptance driven by the aforementioned social movements has also made the transition smoother than in past years. Nevertheless, industries, entire professions, individual organisations, and even departments within organisations progress at greatly different rates depending on their own situations.
This month, we touch on some of the ways in which the concepts of diversity, equity, and inclusion have broadened, and look at how this has affected organisations' approach to DE&I. Most of all, we acknowledge that DE&I is still very much a work in progress, and may always be so, simply because diversity, as a completely human trait, will evolve alongside people and societies, and the corresponding needs for equity and inclusion will do the same.
