Addressing diversity is the right thing to do for all organisations. This certainly applies on a moral level: we all have a duty to give equal opportunities to every individual regardless of their nationality, gender, race or religion. But on top of that, it is an unavoidable fact for every CEO that the business case for building a diverse workforce is now overwhelming.
Diversity = better creativity, stronger governance and better problem-solving abilities
This comes down to the characteristics that a diverse team bring to an organisation. Employees with more diverse backgrounds bring in new perspectives, ideas and experiences. This is the fuel of innovation – each individual in a diverse team will take a different stance on the best way to do something and provide unique insights into how things could be improved. This is obvious and has been understood for years, but now we can clearly show more.
Diversity = profitability
It has been estimated that closing the gender pay gap would add $28 trillion to global GDP by 2025. Additionally, the most gender-diverse companies are 48 percent more likely to outperform the least gender diverse companies and are 25 percent more likely to have above-average profitability. The relationship between diverse leadership teams and profitability isn’t a correlation as a causation. A diverse team is a more accurate representation of your workforce, your customers and society at large.
In the technology industry, the impacts of diversity are no different. You only have to look as far as the launch of the first iPhone to understand the revolutionary impacts that diversity can have on innovation. It was such a ground-breaking product that it completely disrupted the existing market, transforming our outlook on the core purpose of a phone. Almost overnight, ‘smartphones’ replaced ‘mobile phone’ in day-to-day conversation. Apple’s innovative success was a result of their choice to invest in designers as well as technology specialists – people who thought differently and had a unique perspective on what a device should look like. On average, tech companies with more diverse management teams have higher revenues of about 19 percent due to the increased innovative abilities that come with diversity. In an industry where innovation is essential for growth and competitive advantage, diversity shouldn’t just be a metric, but an integral part of a successful business.
As a society, we have made some progress but there is much more to be done. More than 1/3 of companies still have no women on their executive teams at all. At this current rate of progress, we’re still 99.5 years away from achieving gender equality and that’s just not good enough. The pressure on governments and organisations to do more for diversity has sky-rocketed and the advantages are clearer than ever, so why are businesses slow to change?
The role of business leaders
Business leaders must remember that we have an enormous amount of leverage, and so we must never lose sight of our ability to enact positive change in our organisation.
1. The basics
There are the things we should all be doing in the short-term; improving maternity leave policies, championing return to work programmes and ensuring that job adverts are written in gender neutral language. But we should all be thinking for the long-term as well, strategizing how to build a lasting culture in the organisation centred around the fundamental principle everyone should feel welcome in the workplace.
2. Gender pay gap reporting
I believe that gender pay gap reporting has done and can do a lot for gender diversity. It’s vital that businesses report their gender pay gaps annually and reflect on these figures. They highlight the unfair disparity between how much men and women are paid for doing the same role (Equal Pay) and highlights the male to female ratio of employees across all levels of seniority (Gender Pay Gap). You get what you measure and this is the kind of data that drives accountability for change among leadership and signals to stakeholders that they are committed to diversity and inclusion.
3. Mentoring
Change needs to start from early education to adulthood. At NTT DATA UK, we partner with The Girls’ Network – a charity that focuses on improving the futures of young women through mentoring. Each year, NTT DATA UK is partnered with a school and my colleagues I mentor girls aged 14 to 18. Throughout the sessions, we aim to provide these girls with work-related skills and guidance that will help them in later life, but also give them more self-confidence to empower them to succeed. Whilst the girls get a lot out of the mentor programme, I see it as a hugely valuable relationship for both parties and would recommend other businesses to take a similar approach.
Reverse mentoring is a fantastic opportunity for representative individuals to provide mentoring and education for more senior members of the organisation. As with all mentoring, it is an approach that clearly benefits both parties. Helping the more senior people understand the real life challenges and address the unconscious bias.
Final thoughts
Organisations need to remember the valuable role they play in enacting positive change in society. If we look back in time, we consider many prejudices that were once ‘the norm’, like racism, sexism or homophobia, to be unacceptable in modern society. Business leaders be part of making history and drive the change.