Category: Blogger's Corner, progress, Media, young generation, organisation, politician
Diversity, along with its siblings of inclusion and equality, seem to be all the rage in the media, in organisations and with politicians. It appears that voices are being heard for diversity – somewhat - and progress is being made for inclusion and equality, albeit too little and too slowly. Despite this, there is a young generation growing up, for whom ‘diversity’ is more natural and who more readily accept, expect and embrace differences in the broadest possible sense. A significant challenge for many of these young people is ‘access to opportunity’ as they progress through life with their chosen career and paths. Then, the three aspects of diversity, inclusion and equality hit them hard as they experience preference still ruling merit in many quarters.
There may be no universally accepted definition of diversity. However, diversity in a workplace context can be defined as individuals from different backgrounds and experiences working together, collaboratively, to maximise performance. I can buy that especially as it goes well beyond the generally accepted four ‘visible’ aspects of diversity: gender, racial, generational and disability (yes, some of these are not overt or readily visible – but in the main they are).
“The true and full benefits of diversity and difference arise from what I have termed diversity of ‘POETS’. Romantically, I devised this as an harmonious acronym for P erspective, Outlook, E xperience, T hought, O utlook,S ector & S ocial background. It is the invisible differences (below the iceberg) and what goes on inside of us given our unique ‘POETS’ that lead to the full benefits from diversity and inclusion.”
However, much of the debate and coverage about diversity has been focused on gender – and understandably so given that women make up a little over 50% of the population and continue to face discrimination, prejudice, bias and unfair treatment in most walks of life in all countries. However, there is growing concern that senior level gender diversity, such as women on FTSE boards in the UK, is soaking up the oxygen of the diversity debate – much to the detriment of diversity and difference of other aspects, be it: women of all social backgrounds and levels, generational, ethnicity, disability or any other dimension (visible or not). As a result, we may not be reaping the full business and societal benefits of difference and diversity of POETS.
Furthermore, conducting some less than scientific market research of ‘what diversity is’ to many people yields some surprising results. From a random sample of the general public on some average streets in average jobs earning the average salary (between £27,000 and £35,000) per year in the UK, it appears that many think diversity is: “…about women” or “…for black people” or “…immigration” or “…if you’re not good enough” or “...something just for minority’s (sic)”.
For me diversity has never been about promoting one group over another; it must have equality, fairness and merit at the heart of it. The benefits of diversity and difference go to the majority and flow to all – especially if the full spectrum of diversifying differences (POETS) is embraced. Of course, the status quo may not be this way given continuing inequalities and preference ruling merit in many areas still.
In addition, the conversation about diversity and inclusion appears to occur amongst a ‘closed elite’ or those or working in diversity and inclusion, business and organisation leaders and the ‘media set’ – which may further alienate the general and wider public, especially when focused on groups such as women and ethnic minorities.
A UK perspective regarding women on FTSE boards
We know from Lord Davies' final review of women on UK FTSE 100 Boards that many of the women who have broken into FTSE 100 boards are 'similar' in background to the current dominant male group in that they are likely to be from priveledges backgrounds, white, graduates of an elite university and professionals from finance. Rather disappointingly and slightly controversially, gender diversity in these cases could well bring less genuine diversity and benefits than the appointment of a man from a significantly different ‘POETS’ but equally or more meritorious. As is well known, most suitably qualified candidates from different cultural or socio-economic backgrounds continue to face significant barriers to access to the boardroom (despite the evidence showing the benefits of these differences).
Bloomberg Business published a rather provocative article a couple of years ago with the headline: 'Gray alpha male boards damaging UK companies'. This highlighted some of the differences between UK and US corporate governance codes, board cultures and the correlation between diversity and business results. The article stated: "That helps explain why the FTSE 100 Index has lagged the Standard & Poor’s 500 Index over the past 5, 10 and 30 year periods... Over five years, the S&P 500 is up 15 percent annually compared with 7.8 percent for the UK benchmark, including reinvested dividends. The S&P 500 has surpassed the FTSE 100 over 30 years, returning 11 percent versus 5.9 percent at its UK counterpart." If people and talent drive business results and market valuations then it can’t just be that the US personnel are better than us UK folk?
My personal learning from P&G
I first learnt about the benefits of difference in a workplace context, 20 years ago having just graduated from university, and working with Procter & Gamble in Brand Management. Although many would say P&G’s leadership and management style can be rather formulaic – attributes such as: ‘innovation and creativity’ and ‘search and reapply’ sat alongside the expected ‘leadership’, ‘initiative and follow-though’ and ‘working effectively with others’ as part of their fabled ‘what counts’ factors’ for effective leaders.
I guess I was also fortunate to have been in the non-traditional business of prestige fragrances, managing Hugo Boss, where P&G was not a leader and where there were no ‘decades of tried and tested formulas’. To ensure a success in the prestige fragrance category, we challenged multiple sacred cows and accepted beliefs and embraced the vast differences in the truly international development team - whilst gaining consumer insights from a wide variety of viewpoints on the ground in multiple locations outside of the traditional prestige fragrance environment. Most importantly, we operated in a sub-culture where challenge was encouraged, celebrated and acted upon. The results allowed us to create a fragrance that 20 years later is still a best seller and also to influence the fashion house to go in a different direction and launch its first collection for women (which has expanded significantly over the last two decades).
What does the data say?
I have a hypothesis from the 'Diversity Matters' data that Mckinsey & Co presented nearly two years ago. We now know from McKinsey’s analysis that companies in the top quartile for gender diversity were 15% more likely to have above median financial returns relative to their national industry median. What we don’t talk about as often is that the data also showed that companies in the top quartile of racial/ethnic diversity were 35% likely to have above median returns relative to their national industry median. Why?
My hypothesis, as per my views regarding the final Davies review of women on FTSE 100 boards, is that many of the senior women appointed were likely to come from similar backgrounds to the incumbent men (i.e. white, privileged, with parents being able to afford full fees at private schools, being selected on merit for Ivy League/Russell Group universities – and most importantly with similar cultural references and social backgrounds). As a result, diversity of POETS (Perspective, Outlook, Experience, Thought-process/Thinking-style, Sector & Social background) is less for gender diversity (especially in the UK) than that of those from different cultural, ethnic and social backgrounds – and so, the business impact is less pronounced.
The need for ‘tri-sector’ athletes
It seems obvious to say that those who make a striking difference are different in themselves. Organisations today face an increasing set of complex challenges in an ever more competitive, changing, digital and interconnected environment. There is a need for individuals who can understand, engage, collaborate across different disciplines, functions, industries and sectors. The term ‘tri-sector athlete’ was coined by Professor Joseph Nye (Kennedy School of Government) for those capable of doing this and appreciating the needs, aspirations, and incentives of people in all different sectors and speak their language.
Nick Lovegrove and Matthew Thomas writing in the Harvard Business Review and McKinsey & Co have identified six characteristics for these ‘tri-sector athletes’: 1) Balancing competing forces; 2) Searching and reapplying across sectors; 3) Connecting and developing within context; 4) Providing subject matter expertise that resonates across challenges; 5) Taking advantage of interdependent networks; and 6) Being prepared for irrationality.
I firmly believe that at the core of ‘tri-sector athletes’ is valuing, embracing and realising the benefits of difference and diversity of POETS.
Gatekeepers vs. gatecrashers
The UK, on the whole, still remains a divided society based on privilege and wealth – where an individual’s family background and social origins generally determine their future more than other factors. Talent is everywhere, but opportunity is not. This must change if we are to remain competitive and, indeed, thrive in a post-Brexit world where it will become more important to develop and nurture talent from within the UK. We must develop and embrace differences as exemplified by ‘tri-sector athletes’. A significant challenge is getting past the gatekeepers who are comfortable maintaining the status quo for their benefit and those like them. In addition, for many of these gatekeepers who are accustomed to privilege, diversity of ‘POETS’, inclusion and equality can itself feel like oppression.
It does not have to be this way and it is ironic that in this transparent, digital and fast-moving world opportunity is reducing and inequality is increasing. The belief that "The market economy... is the most effective enemy of discrimination between individuals, classes and races" has not proved to be the case. With even greater irony, these are the words of former politician Enoch Powell, not normally considered an ally in the case for justice for most minority groups. Ensuring transparency and open, fair competition is essential for an effective democracy, healthy meritocracy and a fair and equitable society. As a result, more must be done to drive change and fully embrace diversity of ‘POETS’. The time is coming for government and all stakeholders to consider intervention, strong social policies, promoting equality of opportunity and reducing the achievement gap.
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