The Time is Now
For shareholders, the cost of bad leadership behavior is mounting.A growing number of CEOs and other high-profile leaders have been ousted for allegations of sexual harassment, discriminatory language and other offenses that might have once been swept under the rug. The costs to their organizations are often staggering. Recent CEO indiscretions at public companies have led to an average 7 percent decline in market capitalization – or a $4 billion loss – in the days and weeks following the news.1 And these numbers do not include reputational losses, legal fees and settlements, the cost of follow-on training or of replacing the disgraced executives.
At the same time, the need for leaders to create welcoming workplace cultures is growing exponentially.By the year 2050, researchers project there will no longer be a clear racial or ethnic majority in America, and immigrants and their children will account for 83 percent of U.S workforce growth.2 This heterogeneity is occurring as organizations become less hierarchical and more dependent on complex, knowledge-based tasks that require teamwork and collaboration. These multiple shifts point to a common leadership implication: to maximize performance, leaders will need to master the art of enabling people with different perspectives to work well together.
The diversity and inclusion (D&I) imperative is fast becoming the new frontier in risk management. Evidence suggests there are also rewards to be gained from getting D&I right. In order to succeed, companies need to ensure they have leaders who can create impact in a diverse workforce.Leaders who create diverse and inclusive cultures have a distinctive leadership profile. They possess certain innate instincts as well as learned competencies. Our research shows they also tend to see better outcomes from the individuals and teams they manage, including greater employee loyalty, better decision-making, and higher levels of innovation.
To help companies hire and develop such executives, Russell Reynolds Associates has developed a new approach that we call the Inclusive Leader profile. This profile defines the four key competencies that characterize an inclusive leader, as well as the various behaviors that are associated with these competencies.
In this paper, we take a detailed look at the concept of inclusive leadership and answer some key questions:
Related Content: What is the role of empathy in diversity and inclusion?
What is Inclusive Leadership?
What distinguishes inclusive leaders from others? We define inclusive leadership as:
Inclusive leaders excel in four key areas. They bring
awareness and clarity to problem areas, they practice
courageous accountability to help resolve those problems, they
empower others, and they foster
innovative collaboration to unlock the unique contributions of each person in a group.
Using our three-pronged assessment process, we not only can discern how likely an executive is to prioritize and excel at inclusive leadership, but also offer detailed, specific feedback on developmental steps to improve.
The Russell Reynolds Associates Inclusive Leader modelInclusive leaders begin by bringing awareness and clarity to a situation, then progress to problem-solving and value creation. Their strength depends on both intrapersonal dimensions as well as interpersonal ones. Each competency builds on the one before it.
How to Assess, Select and Develop Inclusive Leaders
These trends imply that many organizations are undervaluing inclusive leadership skills. As a result, they miss important opportunities to encourage and promote leaders who have them, and develop the leaders who do not have them yet. Meanwhile, they are missing out on the full potential that diverse teams can deliver.
We use a three-pronged approach to help organizations identify and develop inclusive leaders. This allows a robust process for identifying the extent to which individuals are effective inclusive leaders. It also forms the basis of personal development plans for individuals to become more inclusive. RRA Process for Identifying and Developing Inclusive Leaders
RRA Process for Identifying and Developing Inclusive Leaders
Beyond identifying and coaching individual leaders, organizations need to invest in five key efforts in order to fully harness the effect of inclusive leadership and embed it into their cultures:
Recognizing Inclusive Leadership
How are inclusive leaders different from average ones? The following actions are what help define and differentiate them.
Inclusive Leaders in Action Following are some recent examples of actions that individual leaders have taken to help create inclusive cultures.
Outcomes of Inclusive Leadership
Our research shows inclusive leaders significantly affect their employees’ experience at work; improving outcomes including job satisfaction, loyalty and sense of belonging.7 When employees have positive working relationships with their leaders and feel they can act authentically in the workplace, they are more likely to contribute at higher levels and improve firm performance.
Inclusive leaders also contribute to improved collaboration, as they are able to leverage the diverse contributions of each team member and empower groups to perform beyond the sum of their parts. Teams with inclusive leaders were more likely to make high-quality decisions, produce innovative ideas, and perform at higher levels than others. We see similarly positive effects for other team-level outcomes such as agility, effective communication and collaboration, risk management and readiness to disrupt, transform and focus on the future.
The diversity and inclusion imperative is the next frontier of risk management as well as a leading contributor to high performance. While no leadership style can guarantee good behavior or business growth, it’s clear that the inclusive leadership behaviors we have identified set the stage for both of those benefits – and that they are factors in executive selection and development that no organization can afford to ignore. With our multi-faceted assessment process and proprietary Inclusive Leader model, we are fully prepared to help our clients hire and develop executives who can meet the challenges of D&I while contributing extraordinary value to their firms.
2 Center for American Progress.
3 Erika Fry, How Accenture Tackled a Hard Conversation About Race, Fortune.com, October 17, 2016 http://fortune.com/2016/10/17/accenture-juliesweet- diversity-race/.
4 PwC US inspires more than 300 CEOs to commit to diversity and inclusion, PwC Global Annual Review 2018, https://www.pwc.com/gx/en/about/ stories-from-across-the-world/inspiring-more-than-150-ceos-to-commit-to-advance-diversity-and-inclusion.html; also 2017 statement from Tim Ryan, https://www.ceoaction.com/actions/statement-from-tim-ryan/.
5 Elbert Wyche, Pixar’s Lee Unkrich and Adrian Molina on Making Coco Feel Authentic, ScreenDaily.com, November 30, 2017. https://www. screendaily.com/ pixars-lee-unkrich-and-adrian-molina-on-making-coco-feel-authentic/5124547.article.
6 Diversity & Inclusion Gamechangers, http://www.russellreynolds.com/en/Insights/thought-leadership/Documents/Diversity%20and%20 Inclusion%20 GameChangers%20FINAL.PDF.
7 RRA 2018 Diversity and Inclusion Pulse Survey.
Anthony Abbatiello leads Russell Reynolds Associates’ global Leadership & Succession practice. He is based in New York.
Kate Conley is a member of Russell Reynolds Associates’ Leadership & Succession practice. She is based in Atlanta.
Jacob Martin is a member of Russell Reynolds Associates’ Diversity & Inclusion practice as well as its Leadership & Succession practice. He is based in Atlanta.
Marie Nitzgen is a member of Russell Reynolds Associates’ Diversity & Inclusion practice and its Leadership & Succession practice. She is based in Frankfurt.
Tina Shah Paikeday leads Diversity & Inclusion advisory services as a member of Russell Reynolds Associates’ global Leadership & Succession practice. She is based in San Francisco.
Harsonal Sachar leads knowledge for Russell Reynolds Associates’ Diversity & Inclusion practice. She is based in Toronto.
Cissy Young co-leads Russell Reynolds Associates’ Diversity & Inclusion practice and is a senior member of its global Biotech & Pharmaceuticals practice. She is based in Boston.