A diverse range of voices and opinions in the leadership team can be extremely beneficial, both in terms of creating a better working environment and by directly improving business performance. However, many organisations are still struggling to get this representation in the top team right.
, Senior Relationship Manager at Criticaleye, says: “It makes sense for the most senior positions to reflect the customer base and represent the wider business, as one of the biggest dangers for organisations today is group think. If you have a more diverse leadership team, then you’re better equipped to navigate change in fast-moving markets.
“Unfortunately, the evidence suggests that while the intentions are positive, companies are still moving far too slowly when it comes to developing a wider pool of leaders in their top teams. Ultimately, this will prove detrimental to business performance.”
A recent research report
conducted by Women in Hospitality, Travel, and Leisure 2020 (WiH2020) analysed the number of leadership roles across those sectors held by women. The findings show that even with an ever-increasing pool of female executives and non-executives to choose from, they occupy just seven percent of the CEO, CFO and Chair triumvirate in FTSE 350 HTL businesses.
The rate of change is simply too slow. Tea Colaianni
, Chair of WiH2020 and a Criticaleye Board Mentor, suggests that “the only way to see an improvement, in terms of creating a more diverse leadership team, is to treat it like any other business-critical issue.”
She explains: “If you set out having done analysis and research, understanding what the obstacles, challenges and opportunities are, then you will see results. It’s a case of devising and testing your strategy, which includes benchmarking yourself against what your competitors and other industries are doing, as well as setting some clear objectives and accountability frameworks when you move into the execution phase.”
Those companies that adopt this approach are, Tea argues, “more efficient, and ultimately more successful”. On the flipside, she says: “There are other companies that are taking what I call a ‘hit and hope’ approach – they just do something and hope that it will fix their problems. It might get some PR and some noise in the marketplace, but is it actually sustainable?”
According to Elizabeth Lang
, Partner at Bird & Bird, the introduction of Gender Pay Gap Reporting
(GPGR) in April 2016 – and the media scrutiny that came with this – has also compelled businesses to think differently about diversity and inclusion within their organisations: “[GPGR] coincided with a few high-profile stories in the press around pay and pay disparities between genders, and that has meant that companies are now very sensitive about how they appear in relation to this matter.
“I think that when they were being discussed, there was the opinion ‘there are no teeth to the regulations, so let’s put it quite low down on our list’, whereas the amount of publicity that it generated has meant that companies really have no option but to take it seriously.”
More than a numbers game
It may be tempting to focus on hitting targets and even consider introducing set quotas, but perhaps the bigger goal for senior leaders should be to build organisations where everyone has the opportunity to succeed.
, Global Head of Actelion Pharmaceuticals, advocates creating an inclusive environment in your business, rather than trying to address a single issue, or hone in on a specific stat. This will, in turn, encourage employees to move into more senior roles.
She says: “It is not only about diversity, there also needs to be an inclusive environment where diverse groups can flourish. You need to develop minority groups early in the business, so they are not minority anymore when they get to senior levels."
If instead you get set on creating a ‘perfectly balanced’ team, based on improving your numbers, you will find this is more complicated than it seems. Jane suggests it is easy to overlook all the different elements of a truly diverse group, as “diversity is not just about gender or race, it is also about age, personality, and many other different dimensions.”
With this in mind, she suggests “it is important to look at your team and to see which dimensions you need to address, then set your mind to it.”
, a Criticaleye Board Mentor, highlights how getting a good balance of all these elements can be tricky. Drawing on his past experience as Chief Risk Officer for Asia Pacific at Royal Bank of Scotland, he says: “The senior team that reported to me comprised of many different nationalities and cultures, which was both fascinating and challenging from a cultural-norms perspective; it provided tremendous diversity of thought around how to consider and deal with issues ... However, they were all male, so there was a lack of diversity in that sense.”
When it came to the Executive team, John says it was almost entirely made up of Brits, although in the last year there was a shift so that just under half were women. “The improved male-female balance led to a more thoughtful and reflective tone of discussion and debate,” he says. “But there was a risk of a UK bias, which is important to consider when operating in Asia.”
From a business performance perspective, it absolutely makes sense to be recruiting from the widest available array of talent, and then making sure you’re able to develop people and keep them engaged. Tea says: “It’s becoming more and more expected that companies respect, embrace and support diversity, so if you don’t create this culture, you’re not going to be able to recruit the right type of people.
“It will affect the bottom line if you are left with people who just don’t care. If you don’t do it, you’re going to get left behind.”
The Criticaleye HRD Retreat 2019 will take place on the 28th February and 1st March. For more details about the Retreat, find the agenda here. To register your interest in attending, contact your Relationship Manager or Joshua Tearney.