The diversity opportunity
It would be wrong to view diversity as no more than a series of pitfalls to be avoided, industry participants argue. Far better also to focus on the opportunities that come from recognition and inclusiveness.
LING As has been mentioned, cultural diversity is a complex issue with many aspects to it. While we’re all very focused on it in this room, people outside this conversation might be wondering why they should read this. I would stress that it affects all aspects of a business.
The president of CEW [Chief Executive Women] said that companies with balanced leadership teams, in Australia and internationally, perform better. She was talking about gender, of course, but it is the same with regard to culture.
According to the data, not only do these companies deliver better profits but they also have stronger talent attraction and retention. They achieve higher returns, better ESG [environmental, social and governance] outcomes, have lower overall risk profiles and better credit ratings. Therefore, one of the things we need to keep emphasising is that cultural diversity affects businesses, not just their profit but across the whole organisation.
YETSENGA My view is that it is difficult to understand why this question still needs answering. The benefits are clear and concrete – they include access to a wider talent pool, more diverse perspectives and thinking, reduced chance that groupthink takes hold and more ethical outcomes.
The bottom line for all of us is that we need to have the right culture, not only to attract great people but to keep them. Whereas this probably was not the case in the past. In many respects, it is great that we have moved to the point where people are voting with their feet. It will force change and help make the difference.
YETSENGA If more diverse companies attract more talented workers, which leads to better decision-making, this seems to be a direct link between diversity and financial performance.
Perhaps the most important subtext to this aspect of the discussion is that a ‘lower-performing’ – however we define this – but diverse team does not necessarily outperform a ‘higher-performing’ homogenous team. Businesses still need to hire for performance in the roles they are looking to fill but should do so in a way that adds to the mix of skills in the team.
YETSENGA Perhaps another way to ask this question is why there wouldn’t be, given what we know about human decision-making and behaviour. Performance and access to talent are both at risk if a team is not diverse.
SIDHER The greatest risk is missing opportunity and being less able to adapt to change. Diversity brings a plurality of views, which surfaces opportunities faster and heightens awareness to change.
LING When you do not have a diverse team, you have a strong chance of creating an echo chamber or groupthink – and we all know where this leads. What we have heard in this discussion today is about employee enlightenment.
Going back in time it was all about carrying on and pretending everything was ok, or ‘fake it till you make it’. What I have heard here, and what we need to be very much aware of as senior leaders, is that if people do not like the culture they will leave. I hear it among the people I work with. I hear it from my daughters, too.
The bottom line for all of us is that we need to have the right culture, not only to attract great people but to keep them. Whereas this probably was not the case in the past. In many respects, it is great that we have moved to the point where people are voting with their feet. It will force change and help make the difference.
