In business as in farming, a monoculture can be deadly. By taking these three steps, your company can grow the diverse leadership team it will need to thrive.
While organizations have made great strides, they still have a long way to go. Women make up just 27% of S&P board members. Minorities held just 16% of seats in 2018, and it’s estimated that, as of 2016, there were fewer than 10 openly LGBTQ individuals in those top positions.
Why Companies Need More Diverse Leadership
It isn’t just public pressure that’s motivating these changes in the C-suite. Organizations with a diverse leadership team have a major competitive advantage, which is why companies of all sizes are making it a priority.
A 2018 study found that, on average, companies with a diverse management team earn 19% more revenue than companies with below-average diversity. According to another study, a 1% increase in workplace gender diversity was associated with a 3% increase in sales revenue, while a 1% increase in racial diversity was correlated with a 9% increase in revenue. More diversity means greater innovation, as a diverse workforce brings in a broader range of experience, which in turn fuels new ideas.
In a recent LinkedIn Live interview, Denise Hummel, CEO of Lead Inclusively, Inc., a SaaS technology company, and Marshall Goldsmith 100 Coach, discussed diversity and inclusion. Hummel explained that as diverse candidates hired for entry-level positions move up through middle management, the percentage of them starts dwindling as they move closer to the C-suite. “So that’s what we’re trying to avoid,” Hummel said. “It’s not just about recruiting diverse people. The inclusion piece of that is, can we retain them, and can we advance them to senior leadership where they become the faces of leadership of the future?”
As your startup grows, the diversity of your leadership team should grow with it. But increasing diversity isn’t a matter of filling quotas. That attitude leads to tokenism, which does nothing for your company. True diversity and inclusivity require a more expansive approach to recruitment, hiring and employee development.
Here are a few ways you can begin building a more diverse leadership team:
1. Put your recruitment efforts under a microscope.
Building a diverse leadership team starts before a candidate ever walks through your door—in other words, it begins with your recruitment process. Research shows that up to three-quarters of positions in the U.S. are filled through employee referrals. Because employees tend to refer candidates of the same race and gender, if your team is fairly homogenous, it’s going to require extra effort to expand your hiring pool. The first step in improving recruitment efforts across the board is to evaluate your pipeline to see where you might be missing qualified candidates.
Are you overusing masculine descriptors like “aggressive,” “ambitious” or “competitive” in your job postings? If so, you could be unconsciously discouraging female candidates from applying. Does your company offer any schedule flexibility? A long commute may discourage applicants who live farther from your office, so flexible hours or the option to work from home a few days a week could bring in more candidates who don’t live nearby. Finally, take a look at your interview process. Do the people on your hiring panel all look the same, or do your interviewers represent the diversity you’d like to see on your team? Simply including both women and men in the hiring process will help you build a more balanced roster.
2. Support professional development.
Promoting diversity in your leadership team doesn’t stop at hiring the right people. You also need to be sure that all team members have opportunities for professional growth and development.
One way to help employees feel they will be woven into your company’s fabric is to make it clear during the onboarding process that continual learning is part of the job. Encourage new team members to ask questions and consider creating a mentorship program. This helps more junior employees feel welcomed and supported. Finally, it’s important to create formal learning and growth opportunities within your organization. Have employees write a 12-month growth plan, and create a clear path to promotion. Transparency around the promotion process fosters trust, keeps employees motivated and ensures no one is overlooked.
3. Create an inclusive work environment.
In an inclusive workplace, everyone feels welcome, which is key to retaining the diverse team members you’ve recruited. The first step to creating a more inclusive environment is identifying the needs of underrepresented groups and providing adequate support for them.
One way to do this is to create employee resource groups. T-Mobile, for instance, created six resource groups as part of its Diversity and Inclusion program, including Access for Disabilities, Pride and Allies and Women’s Leadership. Since implementing its D&I network, T-Mobile has found that retention rates are significantly higher among employees who participate.
4. Technology can help keep you focused on inclusion
Hummel believes that technology is one of the missing pieces to the sustainability of diversity and inclusion programs. “We’re in development of what we’re calling the Inclusion Virtual Coach App which utilizes nudge messaging and AI to deliver state of the art microlearning, in real-time, focused on the leader’s priorities. The app “schedules” the date and time of meetings, performance evaluations, and other events where the behaviors can be embedded and push nudge messaging right before the event. The initial use case is with “inclusion,” and the behaviors that support an inclusive organizational culture.” concluded Hummel.
When it comes to building a diverse leadership team, there’s no one-size-fits-all solution. No amount of sensitivity training or quotas can give you a truly well-rounded team that supports all perspectives. Diverse leadership starts at the very bottom but is always reaching for the top. It requires thoughtful hiring, a clear path to growth and a continual push toward inclusivity.