The connection between diversity in senior management teams and the achievement of above average financial results by organisations of all types is widely accepted.
Diversity linked to improved financial results
Organisations identified by Mckinsey as being in the top 25% quartile for racial and gender diverse senior management teams are more likely to have returns above their industry national medians. The same research identified that the organisations in the bottom quartile are statically less likely to achieve above-average returns.
Grant Thornton found that the difference in performance between companies in the FTSE 350 with all male board members was lower by 0.53 per cent, when compared to companies with at least one female member. This doesn’t sound much but that percentage equates to a return on investment across the FTSE350 that is measured in billions of pounds. A Market Inspector, report showed that increased diversity at work could boost the UK economy by £24bn per year.
The connection between diversity and improved results is not however automatic. Simply appointing more women or more BAME managers will not directly create better financial returns.
Diversity and Competitive Advantage
Having diverse voices in the workforce can confront the status quo, encourage out-of-the-box thinking, that drives innovation, leading to new ideas, new services, new products, new ways of working, and guide business strategies, that result in growth.
But according to a study published by the Harvard Business Review female employees of companies without diversity in their management teams are 20% less likely than heterosexual, white male colleagues to win endorsement for their ideas.
Integrated Diversity Initiatives
A study by Covenant Investment Management found that companies with diversity initiatives enjoyed over double the profitability of companies which do not have a focus on improving diversity. But the most successful organisations have stopped treating diversity as a separate initiative, and integrated diversity into all their operations and employment policies, procedures, and are acting to eradicate cultural practices that do not support diversity and inclusion.
Diversity and Social Integration.
Researchers at MIT in the USA identified that organisations with a workforce that lacks diversity may have employees who are more socially integrated, but this social integration does not lead to improved productivity.
The reason is straight-forward, a football team made up of eleven goal keepers would not be as successful as a team with a diverse set of skills that had been finely tuned through training and practice.
The Problem of Onlyness
Being the only person in any situation is unnerving for even the most confident person.
This is especially true for people who are invisibly different, because of their religion, sexual orientation, gender identity, or health.
It is a situation that says Dr Nick Drydakis of the Lord Ashcroft International Business School, can be addressed by employers encouraging employees to find out about each other’s culture and lifestyle away from work, in a way that champions inclusion and understanding.
Policies, procedures and cultural practices that highlight different and onlyness are common to many work places.
Imperial College London’s Department of Surgery and Cancer, where 52% of the employees are female has recently announced that the number of mothers returning to work after maternity leave has increased to 87% since the introduction of family friendly policies and procedures. At the same time a change in approach to flexible working is seen as the reason behind a doubling of the number of female scientists it employs since 2013.
- Whilst family friendly is great, giving preference to parents when time off over the Christmas period is being decided can disadvantage those people who will be spending the festive season alone.
- Christmas is a Christian festival, it is important that employers understand the festivals that people of other faiths celebrate and enable those employees to actively participate whenever possible.
- Encouraging employees to socialise on a Friday evening could make it difficult for a Jewish employee to be involved, and still maintain the practices of their faith.
- There are many different reasons why people do not drink alcohol, religion, health, addition, etc but many employers persist in offering alcohol as prizes in performance related competitions.
- Whilst people are often comfortable talking about their physical health, it is a different matter when it comes to mental health. Yet it is unlikely that any employee will be the only one who is dealing with a mental health issue.
- LGBT employees can feel uncomfortable being out at work if they believe they are the only person in that situation and the employer has done nothing to demonstrate their acceptance of LGBT people.
Acceptance leads to Productivity
Believing that it is important to fit in, in order to have a successful career with an employer can force an employee to create a second work place personality, which is essentially false.
This diverts the employee from achieving their objectives and improving their performance to focus on being socially accepted. For the employer this can lead to creation of a team of goal keepers, which has a further negative impact on productivity. For the employee it can result in the development of mental health problems and then related physical health issues.
It is important for employers to demonstrate through their employment policies, procedures and culture that they value employees as individuals, not just for their work performance but the value that their culture and lifestyle brings to and adds to the success of the business.
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