Inclusivity, diversity and equality breed success, but many boardrooms look the same as they always have.
In late 2014, McKinsey published a global study into corporate equality and diversity which found that businesses with the most gender-diverse leadership were 15% more likely to report financial results above their country’s national average. Those with the most ethnically diverse boards performed 35% better.
“The research on the benefits of diversity and inclusion are growing and hard to ignore,” says Dr Gillian Shapiro, founder and managing director of Shapiro Consulting, which focuses on diversity, inclusion and organisational change. “The McKinsey research shows a statistically significant connection between diversity (gender and race diversity of top management and boards) and financial performance (total revenue, margins on earnings before tax and interest and return on equity).
Shapiro’s own research with Business in the Community backs that up. Over 80% of respondents in a UK surveywho’d experienced an ‘inclusive leader’ reported increased motivation, loyalty and performance, as well as a readiness to ‘go the extra mile’. The Center for Talent Innovation’s research shows companies with inclusive leaders are 70% more likely to capture a new market than those without and 45% more likely to improve their market share.
While the benefits of inclusivity might be clear, how many organisations truly offer equality and diversity from the factory or trading floor through to the boardroom? The short answer is that some organisations have moved a long way, but all organisations have a lot further to go.
In 2011’s UK Census, a fifth of British people identified with an ethnic group other than ‘White British’. It’s unlikely many company boards reflect that one in five. This can have a tangible effect on the success of your marketing. In 2014, an IPA study ‘The New Britain’ found that 77% of British Asians didn’t feel mainstream advertising was relevant to them.
“The importance of diverse perspectives is something that organisations are increasingly recognising as the key to innovation and growth – particularly in a global environment,” says Shapiro. “Inclusive leadership has been shown to make a positive impact on increasing innovation, engagement, customer satisfaction and growth. This is a leadership style that helps to maximise the performance of people and build on the creativity, talents and ideas that a diverse workforce can generate.”
At the end of October, an article in the Evening Standard newspaper by former shadow business secretary Chuka Umunna and former business secretary Vince Cable highlighted the lack of representation of ethnic minority board leaders in UK organisations. Today, there are just four non-white CEOs of FTSE 100 companies. The Standard article urged the government to begin focusing on ethnic diversity in business. “The trend here is worsening, not improving,” says Shapiro.
Marketers can play a key role in improving equality and diversity within an organisation. If that sounds like a challenge beyond a marketer’s usual remit, then perhaps it’s time to think again. Inclusivity should not be seen as an additional function.
“One of the traps organisations can fall into is to make diversity an initiative,” says Shapiro. “When that happens, it often becomes seen as something that’s separate from the real issues of making the business a success – an optional extra. It isn’t. Building greater diversity and making that mix work underpins business success. It’s largely about culture and behaviour change, which takes time. So one of the main challenges is staying the course. Being clear about the value diversity and inclusion bring to your business, and linking it to achieving current priorities, helps ensure the success of the change programmes.”
Shapiro advises thinking about the following questions:
- Do we need to improve employee engagement?
- Do we need to ensure we avoid group-think?
- Are we striving to increase creativity and innovation?
- Is building alliances with different stakeholders and working collaboratively important to us?
- Do we need to better reflect the diversity of our customers in our workforce?
- Are we striving to increase the diversity in our talent pipeline?
- Is being able to work successfully across cultures important to our success?
If the answer to any of these questions is ‘yes’, then a focus on greater diversity and inclusion is important.
Originally posted on https://exchange.cim.co.uk/