Variety is the spice of life, so the saying goes. But evidence is building that for businesses and other institutions, having a diverse workforce and senior management team is more than just a tick-box exercise or a sign of commitment to doing the right thing.
Indeed, in recent months Linstock has worked with two professional services firms – Grant Thornton and Right Management (part of Manpower Group) – to explore the impact of gender-diverse management teams on company performance. The research shows that diversity has a material impact on performance and profitability.
This is a new dimension to the issue of workplace diversity and makes it a more pressing business issue now than it has ever been. Yes, HR teams and forward thinking leaders have always been conscious that building teams of people from a mix of backgrounds projects an inclusive and meritocratic ethos. But with the links between diversity and performance becoming harder to ignore, it should be now on the radars of management teams, boards, and in the case of larger companies, shareholders too. As a leader today, you can expect heat from all quarters if you’re not perceived to be taking diversity seriously – and thinking of it as a business issue.
A cursory look at the media last year suggests this is an issue firmly on the corporate agenda. If you tot up the number of references to ‘diversity’ in the FT last year, along with the business sections of the Times and the Telegraph, it comes to 3,613. Compare that to two other issues which are accepted as major reputational flashpoints for businesses at present: tax avoidance and cyber attacks. They only appear 2,994 and 792 times respectively.
Yes, it’s a crude poll, but the raw numbers illustrate something pretty profound. Diversity has become a serious reputational issue. If your organisation lacks the diversity of its peers, fears will grow that your ability to perform and succeed will also suffer. As the clamour to demonstrate diversity grows, so will the pressure to be transparent about how you stack up.
So what should organisations do to ensure they are up to pace?
If it’s not happening already, comms teams should be working with the board and HR to ensure not just transparency, but direction of travel. Working together, organisations can effectively demonstrate that they are across the issue and that real change is being driven from the top. Our work has shown that there are no quick turnarounds, but for progress to be genuine the board has to be behind it and communications teams need to be in step to ensure it’s evident.
Organisations may find that a root and branch review of the way they hire and develop talent is needed. Or, that their progress on building diversity needs better communication through annual reports and other public facing literature. Whatever is identified, if organisations are acting on the issue rather than standing still and waiting for it to come to them, then there need not be any reputational concerns to worry about. Quite the opposite; if the opportunity of diversity is seized upon and infused within organisations, greater diversity will reap very real rewards for businesses.