October 22, 2020

TPL Insights: Building Peak-Performance Cultures #38 – Stakeholder Engagement – A New Definition of Diversity

By Rob Andrews

How do you define diversity in 2020? For decades, we’ve been told that organizations that employ diverse teams perform better. But what does that really mean? Certainly, diversity includes gender, race, and nationality. But a more comprehensive definition should include diversity of thought, age, culture, hardwiring, political orientation, and more. Building a truly diverse and inclusive workforce is far more complex and difficult than most realize, and it affects every sector of the planet.

Building a peak performance culture has always required engaging stakeholder groups in ways that celebrate diversity. Astute leaders now have an opportunity to reexamine their organizations with a new pair of glasses. Attracting, engaging, and motivating diverse workers will be key to building the company of the future; the old, worn-out definition of diversity no longer applies.

I wrote about this subject four years ago and didn’t even mention political diversity. Clearly, we are living in the most politicized, polarized, and traumatized times of my lifetime, and that’s saying something. We are where we are. None of us would have drawn things up this way, but now that we’re here, we have a choice. As leaders of organizations, we are at an inflection point. We can either get much better as a result of our current state, or we can miss this opportunity.

On November 4th, roughly half of the USA will be ecstatic, and the other half depressed. Half of the population will be convinced we are headed for disaster and the other half convinced we are headed for greatness. It is after the election that we’ll have an opportunity to celebrate differences in political perspective. Sound like fun? For most of us, it will be difficult. We’ll have to accept the result and look for ways to meet in the middle.

And then there’s generational diversity. Jason Dorsey is an expert on the subject, having built a wildly successful consulting practice focused on helping us understand, motivate, manage, sell to, communicate with, and otherwise deal with multiple generations. He says that those who get the generational nuances will win, and those who don’t, won’t. Dorsey’s research facility, the Center for Generational Kinetics, has determined that we will be dealing with seven different generations in years to come. He argues that these generations are no longer determined by birth years, but by context and behaviors – creating more opportunities to deal with.

Diversity training has borne too much of the burden of addressing these issues. It has become the go-to solution for all inequities. Starbucks gets hit with negative publicity, and they order firm-wide diversity training. Sephora faces uncomfortable public revelations, ditto. Ford loses a race-and-sexual-harassment lawsuit and agrees to do more diversity training. BMW loses a race-discrimination suit and institutes more training. McKinsey analyzed data from hundreds of employers, across dozens of years, to assess how different equity measures work. And what they found is that the typical diversity training program doesn’t just fail to promote diversity, it actually leads to declines in management diversity.

Training has taken different forms over time, but they’ve all been disappointing. The research is clear and consistent. You can’t significantly affect bias in training that lasts an hour, a day, or a week. Biases are rooted in stereotypes, and stereotypes are ingrained over a lifetime of listening to the radio, watching TV, and scrolling through social media. Hundreds of studies have demonstrated this. The best anti-bias trainings do reduce measured bias slightly, but the effect doesn’t stick. Nor does it translate into organizational change.

Some studies find that anti-bias training can actually activate biases. Telling people to stop thinking about stereotypes is like telling them to stop thinking about elephants. Worse, training can spark backlash. Research shows that the typical diversity-training program does not lead to increases in workforce diversity — not in a month, not in a decade. If employers want to open opportunities to diverse people, ways of thinking, and orientation, anti-bias training won’t do it. They have to make practical systemic changes — which are less onerous than you might think.

Leaders who can drive sustainable growth today need to be masters at collaboration who can make everyone on their teams feel like they belong and can make a real contribution. They must also have the ability to influence diverse constituencies while remaining adaptable and nimble in the face of change. Leaders who bring diverse experiences and perspectives are better positioned to work in these ways.

The best teams, whether focused on board activity, investment strategy or operating tactics are carefully crafted to leverage the broadest possible diversity while being united with a common purpose and vision and holding homogenous values. It is undoubtedly a tough balancing act.

McKinsey’s research suggests that a small number of systemic changes — targeted recruitment, mentoring programs, open skill and management training, and diversity task forces — can lead to significant and persistent increases in workforce diversity and opportunity. This is true for both frontline and managerial jobs.

At the end of the day, there is no true diversity or inclusion without a commitment from the board and senior leadership to genuine understanding and empathy for different ways of being. Allen Austin’s research suggests that leaders who are willing to be vulnerable – admitting their flaws, biases, and blind spots – become capable of engaging in genuine dialogue with their organizations. For leaders who actually succeed, the reward will be huge. Real and lasting success will require an ongoing conversation and a firm commitment. If we can begin to look at our stakeholders without labels: Democrat, Republican, Black, White, Hispanic, Boomer, Millennial and the like, we will have taken an important step toward building a culture of peak performance.

We hope that this piece has been interesting, thought-provoking. and perhaps even useful. Our work is about building cultures of peak performance and we would love to be your thought partner. Give us a call.

Warmest Regards,