The time for talk is over
Diversity and inclusion (D&I) are top-of-mind for leaders across every industry and geography today. Customer needs and demographics are fast-changing, and competition is at the ready. There is increasing scrutiny around practices, policies and the composition of leadership at corporations. Competition for top talent is high, and up-and-coming leaders place a premium on corporate culture and institutional values that match their own. Evidence is accumulating to show that companies with diverse talent and an inclusive culture serve their clients better1, innovate more2, and have stronger employer brands3 – all vehicles for achieving resilience and staying relevant in the long term. A journey towards a more diverse workforce and inclusive culture today is therefore critical to companies in their quest for a more resilient tomorrow.
To gather first-hand insights and perspectives, Russell Reynolds Associates spoke with a number of leaders at companies known for their leading-edge approach to D&I. Our conversations with CEOs, chief diversity officers and other influential members of the leadership teams at these game-changing companies – the #GameChangers – revealed a number of insights. While there are no simple solutions, several patterns emerged.
LESSONS FROM CONVERSATIONS WITH #GAMECHANGERS
A conversation about diversity alone is not enough: Inclusion is essential. Companies that are making real progress in D&I are focusing not only on creating a diverse workforce, but on fostering an inclusive culture as well. Further, many strive for a sense of belonging among employees – a critical end goal, without which diversity metrics and inclusive corporate initiatives are superficial at best.
#GameChangers see diversity and inclusion as inextricably linked to business goals. #GameChangers align their D&I objectives with their broader business strategy and desired evolution in order to achieve resilience.
Diversity and inclusion are about the long game. #GameChangers think about diversity and inclusion as long-term efforts, rather than a series of discrete short-term initiatives. Additionally, D&I are treated as company-wide issues affecting everyone, rather than separate efforts for a few diverse individuals.
#GameChangers move beyond talk and symbolic hires. These companies hold themselves accountable to a set of established diversity goals reinforced through measurement and reporting. More essential, they actively work to change behaviors and mentalities across every facet of the organization.
Engaged and inclusive leadership is critical to success. Our conversations repeatedly showed that diversity and inclusion must start at the top. For a company’s D&I work to have lasting impact, leaders need to be committed to, and engaged in, the company’s D&I agenda.
A conversation about diversity alone is not enough: Inclusion is essential
Committed companies create and foster inclusive cultures. A Deloitte study revealed that over 60 percent of employees cover up some part of their identities at work to try to fit in, with underrepresented groups feeling the most pressure to do so – and experiencing a strong negative impact on their sense of inclusion and opportunity as a result.4 Therefore, rather than simply accommodating employees of diverse backgrounds, an inclusive culture must go further, encouraging them to bring their “whole selves” – their passions, strengths, beliefs, backgrounds, priorities and relationships – to work.
Many leading companies use a simple but effective litmus test to gauge the success of their diversity and inclusion practices:
Will this make employees feel like they belong?
Belonging is the extent to which employees feel they can be their authentic selves at work. If diversity and inclusion efforts are perceived as superficial, the company has not succeeded in creating an environment that embraces and leverages the voices and capabilities of its entire workforce. Ultimately, if employees do not feel like they belong, efforts around inclusion and diversity will fall short, limiting the opportunities available to a truly evolved enterprise.
#GameChangers see diversity and inclusion as inextricably linked to business goals
Our conversations revealed that #GameChangers leverage diverse talent to develop enterprise-level strategies and meet business goals. These D&I leaders exhibit:
A better ability to serve customers
Melissa Harper of Monsanto cited an inclusive culture as a leading catalyst of commercial success in the face of an increasingly complex and global customer base – a sentiment echoed in many of our conversations. Latasha Gillespie of Caterpillar shared that employee resource groups (ERGs) dedicated to specific employee communities typically go beyond a focus on diversity to serve concrete business needs; for instance, the company’s mobility team has tapped the experienced-hire ERG for its insights, while the corporate medical team has tapped the women’s ERG.
A higher level of innovation
Innovation, whether related to products, channels or business models, is a well-known path to long-term success. Steve White of Comcast shared that, in addition to supporting the company’s more obvious goal of creating an inclusive culture through employee engagement, the company’s ERGs help drive new business ideas and inform market strategies. Marta Tellado of Consumer Reports added that reflecting one’s consumer base through employee diversity helps inform the outreach to key diverse audiences, such as the Latino community.
A stronger employer brand
Leading companies recognize that the ability to hire the best talent is essential to long-term market relevance. Judith Williams of DropBox told us that an inclusive culture is so central to DropBox’s employer brand that potential employees inquire about it prior to joining. Further, given that employee referrals are a key source of talent, existing employees need to feel like they belong; otherwise, they will not refer the best talent to DropBox.
Diversity and inclusion are about the long game
#GameChangers understand that to unleash the benefits diverse talent promises, D&I Strategy must be a long-term, company-wide journey towards business goals, rather than a series of tactical initiatives catering to specific groups. As a result, they:
Engage a broad spectrum of employees in diversity efforts, not just diverse individuals. Leading D&I companies make diversity and inclusion part of a broad corporate and talent strategy, rather than a separate, isolated function. They ultimately engage all employees, including the non-diverse majority, in their diversity and inclusion strategies. Melissa Artabane of Bain highlighted the importance of engaging a broad set of leaders – for instance, inviting male leaders to women’s forums, or activating straight allies for LGBT initiatives. These efforts are highly worthwhile: through Caterpillar’s inclusion survey, for example, Latasha Gillespie has found a positive correlation between high inclusion scores, high safety scores and better inventory turns, proving that inclusion is better for the business.
Tackle D&I issues within their own companies, rather than replicating initiatives from other companies. Companies that focus on diversity appropriately know where they lose their talent and why, and they focus on those areas over the long term. They know that quickfixes and “ticking the boxes” will not deliver impact, nor will simply copying the efforts of others. Melissa Harper of Monsanto warned against “boiling the ocean,” or trying to do everything, recommending instead that companies focus on the areas that matter most to their own organizations.
Appreciate that hiring and developing diverse talent require an inclusive definition of “the right fit,” along with a flexible corporate culture. A company cannot hire and develop for diversity while retaining a narrow definition of what “great talent” is. Judith Williams of DropBox, for example, talked about “going beyond the usual suspects” when it comes to hiring.
Adapt their cultures to the changing workforce, rather than hiring individuals who perpetuate the current culture. Judith Williams of DropBox pointed out that when an organization hires people of diverse backgrounds, the culture changes too. Leadership needs to not only accept this change, but use it to the company’s advantage.
#GameChangers move beyond talk and symbolic hires
Most companies acknowledge the importance of establishing objectives around diversity and inclusion, yet their broader talent strategies often do not support these goals. Companies that truly “move the needle” align processes and behaviors with talent objectives and hold leaders accountable.
#GAMECHANGERS HIGHLIGHTED THE NEED TO:
Address unconscious bias. Training to combat unconscious bias came up in every conversation with our #GameChangers. For example, Judith Williams of DropBox stated that to be truly inclusive, fundamental assumptions must be addressed.
Ensure the talent strategy encourages diverse thinking and inclusive behaviors. Julie Coffman of Bain told us that global transfers are part of the company’s talent strategy; in fact, a meaningful percentage of employees are on transfer at any given time. Similarly, Karen Anderson noted that meetings at Alnylam are structured across functions and levels, allowing people to critique each other’s work, identify loopholes and leverage diverse perspectives.
Focus on measurement, reporting and accountability. Comcast measures diversity by function and level, drilling down into problem areas, while other #GameChangers tie bonuses to diversity goals. Additionally, some companies use a data-driven approach and business-intelligence dashboard to measure progress against goals. Many have firm-wide diversity surveys, including Caterpillar, Monsanto and Alnylam. Interestingly, Alnylam’s survey focuses on corporate culture, measuring change through year-on-year data. Monsanto’s survey recently found that its top performers also scored the highest on diversity and inclusion questions.
Aim to get everyone on board, even if you do not always achieve it. When there is enough discord between conduct and goals, no amount of good intentions will help. Companies should therefore strive for full participation across all functions and levels, even if they do not always achieve it. Steve White stated that Comcast strives to create an environment in which all employees “get it,” but at the same time recognizes that in reality, some will get it and others won’t.
Know what you don’t know. Inclusive leaders pay attention, assume nothing and question everything. Shellye Archambeau of MetricStream pointed out that when backing a diversity agenda, it’s all about the questions asked. Steve White of Comcast noted he spends 40 to 50 percent of his time trying to better understand his employees’ needs. And Marta Tellado of Consumer Reports recently invited diversity and inclusion officers from other companies to join a collaborative knowledge-sharing session.
Engaged and inclusive leadership is critical to success
Inclusive cultures thrive on engaged and authentic leadership. We found that #GameChangers hire and develop leaders who see the business sense behind diversity and inclusion, hold themselves accountable and act as authentic role models. Joseph R. Swedish, Chairman, President and Chief Executive Officer of Anthem, asserted that he and other senior leaders of the company are uniquely accountable for displaying authentic behaviors and role-modeling the integrity of the corporate culture. Further, Swedish observed that employees are often afraid to talk about culture and the effect of inclusion and ethnicity. Leaders have a responsibility to address this fear. Julie Hoffman and Melissa Artabane of Bain noted that as Bain employees progress into leadership roles, role-modeling inclusion is an expectation; for example, it is a key input into the overall process of selecting new office leaders.
#GameChangers stand out because of leaders who see the value that diversity brings, foster inclusive cultures and exemplify behaviors that instill a sense of belonging among employees. Ultimately, they recognize that the factors that brought companies where they are today may not be the ones required to take them where they need to go. It will be essential to bring in inclusive leaders with culture-challenging mindsets, who will be key components of a long-lasting, resilient company.
Benchmarking for success. Do leaders within the company ...
JAMIE HECHINGER founded and leads the firm’s Social Justice and Advocacy Practice, along with high-profile chief executive searches for the nonprofit sector ranging across Foundations, Civil and Human Rights, Education Reform, Conservation, and Global Development organizations. She leads the firm’s Diversity and Inclusion Practice for the Americas and is based in Washington D.C.
ART HOPKINS is a member of the firm’s Technology Officers’ Practice and Diversity and Inclusion Practice. He advises clients across sectors on their technology leadership, as well as clients within the technology sector on their executive leadership. He is based in Atlanta.
ANTONIO MACHADO is a member of the firm’s Technology Practice and Diversity and Inclusion Practice. He conducts leadership recruiting and succession assignments at CEO and senior-executive level for public, private and private equity backed clients ranging from small to Fortune 50 companies. He is based in Atlanta.
HARSONAL SACHAR is the global knowledge lead for the firm’s Diversity and Inclusion Practice and a member of the firm’s Consumer Sector. She is based in Toronto.
NORA VISKIN is the global knowledge lead for the firm’s Digital Transformation and Data & Analytics Practices and a member of the firm’s Diversity and Inclusion Practice. She is based in Boston.
How Diversity Can Drive Innovation, Harvard Business Review, 2013.
Fostering Innovation Through a Diverse Workforce, Forbes Insights, 2011.
“Two-thirds of people consider diversity important when deciding where to work,” Glassdoor, 2014.
Uncovering talent: A new model of inclusion, Deloitte University Leadership Center for Inclusion, 2013.