Diverse Leadership Teams Perform Better

Diverse Leadership Teams Perform Better

The Facts

Leadership teams made up of individuals from diverse generations, cultures, communication styles, and genders, have better business results.  Teams with diverse perspectives, often shaped by different backgrounds, preferences, and experiences, have better ideas, and make better decisions.  A recent McKinsey study sheds light on this interesting phenomenon.  Gender-diverse companies are 15% more likely to outperform the national industry median, and ethnically diverse companies are an overwhelming 35% more likely to outperform their less-diverse peers.  We know correlation does not equal causation, but what this study does offer is great insight into why organizations need to focus on diversity.  They further elaborate:

“More diverse companies, we believe, are better able to win top talent and improve their customer orientation, employee satisfaction, and decision making, and all that leads to a virtuous cycle of increasing returns. This in turn suggests that other kinds of diversity—for example, in age, sexual orientation, and experience (such as a global mind-set and cultural fluency)—are also likely to bring some level of competitive advantage for companies that can attract and retain such diverse talent.”

An organization I speak and support, Integrated Woman Leaders Foundation, shared this powerful video at their annual conference this year about the current diversity statistics, and the results that organizations get with more diverse leadership teams.  For those wanting to influence more diversity in your organization, this two-minute video gives all the reasons why diversity matters.

Besides the traditional diversity measures, communication style is also a diversity trait that further illustrates how crucial diverse thinking is for organizations,  A tool that I love using in my leadership development workshops and coaching is the DiSC® assessment.  It outlines four distinct communication styles humans tend to fall into – dominant, influential, steady, and conscientious.  I often am asked by leaders, what is the best DiSC style?  To which I respond – there truly is no best style for leaders.  The best leadership teams, however, tend to have representation across all of the styles.  It’s interesting what happens when you watch a diverse leadership team communicate with one another.  When you have quick decision makers, idea generators, people anchors, and methodical data-oriented people, you generally have a balanced discussion, where people are heard, and people build off of each other’s ideas.  It’s a beautiful thing.  Everyone knows the converse of this – a team of like-minded individuals fuels conflict.  The leaders that all want their ideas to win, move too quickly, or are too slow, are less effective.  Diversity invites more open communication, and teambuilding as a result.

Other organizations I partner with Tina Jaynes Consulting and Inclusity, help organizations build inclusive cultures.  They have seen significant improvement in retention, employee engagement, productivity and the progression of women and minorities into broader leadership roles as a result.   They focus on transformational culture change, within individuals and organizations.  They partner with clients to create more inclusive, diverse workplaces where employees are most engaged and productive.  Inclusity finds that when they collaborate with an organization committed to being more inclusive long-term, they see results.  The lost productivity and impact that non-diverse teams and conflict-ridden cultures have on the organization is real.  They call it “heat loss.”  Think of the employee that stews over a conflict in a non-inclusive culture where differences of thought and perspective are not welcomed.  Chances are that employee is very unproductive on days when this conflict looms.  And, worse yet, they may spread that attitude to others around them.  The impact is huge on the team.  Inclusity believes it is critical to first align the senior leadership team on the necessary culture shift, and define what success looks like.  Once all of the senior leaders are aligned on what the goals are, communication cascades from there.  Teams around the organization embrace the cultural transformation through workshops, facilitated discussions, and action planning sessions.  Their proven process has helped organizations move recognize significant long-term diversity and productivity gains as a result.

Think of a successful team you have been a part of.  Chances are it was diverse.  Whether that diversity was cultural, generational, or just plain had different backgrounds or experiences, getting people together that think differently is a good thing.  I remember my college roommate, Amy, sharing this insight with me – not everyone is like you.  At the time, I remember thinking – well, they should be.  I was so wrong.  The reason I was so wrong is because people are unique, and we cannot change people if they do not want to be changed.  And, people, especially those with backgrounds and experiences different than mine, make my ideas better.  They think of things I never would have thought of on my own, and challenge me.  I now find myself purposefully seeking out people different from me.  Having people that just reinforce what I already think I know is boring.  And, the only way to learn is to be curious to learn from those different than ourselves.

My Story

I chose to go to the Kelley School of Business for my MBA because it was focused on diversity.  With an international class of 40%, and nearly 30% women, I knew that I would learn more from people different than me.  And, I did.  My roommates taught me a lot – Sophie was born in China, Kelly was a New Yorker.  I am a Midwest girl through and through.  We worked together on a variety of projects together in business school, and their ability to think pragmatically, and ask good questions was refreshing.  I had never met people like them before.  They were unique, funny, and challenging.  I remember silly questions from Kelly like – is this a Midwest thing? – when people took her groceries out to her car, and Sophie cooking the most amazing foods for us as we studied.  We still get together every summer with our other business school colleague, Allison, and I could not think of four people more different from one another.  That’s what makes it interesting.  We share stories, business ideas, and personal and professional challenges together, and you never know what you will hear someone say.  I would not have it another way.

Reflecting back a bit further, I remember my first job out of college, sitting down and looking through our organization chart, and seeing the 30 leaders’ faces – from the CEO, to the Group Presidents, to the Vice Presidents – nearly all middle-aged Caucasian men.  I remember feeling deflated.  I had worked hard through school, landed my dream job, yet did not feel like it was possible to make it to that level.  It was like my chances were squashed before my career even began.  I was lucky, however, that our division’s vice president was a woman, the only vice president who was female, and the highest ranking woman in the 80,000 employee company.  I remember meeting with her one-on-one for a short introduction.  I asked the daunting question, what do you recommend for other women that want to be leaders here?  She said, don’t think of yourself as a woman, just be yourself.  In reflecting on this, I tend to agree that we are all human; that does unite us.  Rather than separate ourselves, culture vs. culture, or man vs. woman, or generation vs. generation, what if we instead focused on what we have in common and build from there?  The challenge is that this thinking has not produced results.  Just as my organization chart looked 13 years ago, it looks very similar now.  Little has changed with the mentality that hard work will pay off.  Just merely thinking that if we wait long enough, the opportunities will find those that deserve them, does not work.

My Perspective

Change does not just happen, we have to encourage it to happen.  Organizations and people want to stay the same, unless focus in placed on being different.  We need to make a conscious effort to promote diversity on our leadership teams.  With 91% of CEO positions held by Caucasian men in the U.S., clearly there is opportunity to be more diverse.  And, if we get better results from diversity, why not make a real effort to change?  Organizations that embrace diversity often do so because they set specific goals to increase diversity on their leadership teams – with more representation across cultures and genders.  Goals provide focus.  They signal to the organization what good looks like.

Call to Action

You are not alone.  If your leadership’s organization chart is mostly composed of Caucasian men, challenge the norm.  Here are some simple ways you can help shape a culture that is more inclusive:

  • Get involved in a diversity initiative. Whether it’s an affinity group, or diversity club, internally or external to your organization, attend a function or meeting.  What better way to embrace diversity, by joining a group different than your background.  If you are a man, join a women’s group.  If you are Caucasian, join a non-Caucasian group.  Volunteer to help with an event, or join a committee.  Show people how to not fear diversity by modeling an inclusive mindset and stepping out of your own comfort zone.
  • Ask your leadership team for diversity goals. Simply asking the question, will stir thought.  If the leadership team does not have a goal around diversity, try asking – what if we did, what would the goal be?  Just getting leaders thinking about it, and saying a number, promotes diverse thinking.  Then, keep asking about it.  It times time to change.
  • Recruit diverse people. It takes years to move the needle on diversity.  If we recruit people from diverse backgrounds, experiences, cultures, and genders, we are setting the stage for future success.  If you are a hiring manager, or member of an interviewing or recruiting team, make a goal for yourself to constantly round out your resume pile with diverse styles and perspectives.  Avoid the group think, challenge yourself to get someone different next time you hire someone new.

Organizations that have diverse teams, achieve better results.  They perform at a high level with better ideas and better decisions.

How will you increase the diversity of your team?

#helpyourteamgrow #diversity #inclusivecultureswin