Diversity: Building Brilliant Teams March 2021


River’s purpose is to build brilliant teams.  Nowadays it is universally appreciated that diversity and inclusion (D&I) are key to the world’s most innovative and successful businesses.  It is all too easy to pay lip service to this important topic and not think more profoundly about the wide-ranging impact of diversity from impacting societal norms to the company bottom line.  D&I makes good communal and business sense, it has traversed the business lexicon from a “want” to a “must” and not least because BCG recently reported that better gender diversity incurs a 19% premium on revenue when compared with companies with below average diversity.

Our editors interviewed 34 US CEOs, MDs and Partners across Management Consulting, Technology, Financial Services and Media Industries to understand how companies can be more effective at achieving their D&I goals.

“Diversity is having a variety of voices…inclusion is an environment where all these voices can really be heard”

Janet Foutty, Deloitte US Executive Chair of the Board

Reasons to be Positive

Diversity can all too often be a glass-half-full topic, so sharing successes stories is often the best way to pave a path for a more inclusive future in the boardroom. Although we focus on female leaders here, we recognise that gender categorisation is a binary metric, yet the inclusion of more she/her/hers in the Fortune 500 says something about the changing executive culture.

Non-Binary Approach to Leadership

One Managing Director from a leading US Bank pointed out that 20 years ago, adjectives ascribed to leadership were often one-dimensional and “masculine” citing assertive, dominant, and authoritative traits.  It has been well documented that many women have modelled their leadership on these agentic values (see Queen Bee Syndrome), however the appointment of executives increasingly pinpoint communal traits.  Any modern leadership course will speak to the values of servant leadership and the importance of humility, empathy, and active listening.  It would be sexist to say the aforementioned are exclusively female qualities, but it is reasonable to suggest that the increased prevalence of the female CEO has changed the overall characteristics by which every business leader is judged.  This is a great victory for inclusivity. 

Furthermore, in a world where technology can do so much, we are increasingly looking to our leaders to provide a human touch. Could this be the reason we are seeing more of a desire to include women in teams?  Is this a result of a societal shift regarding the archetypical traits of good leadership?  Ursula Burns told Fast Company that as CEO of Xerox, she was “listener-in-chief”, eroding the old narrative of top-down executive culture for a more inclusive leadership philosophy.

It is our collective responsibility to remove the pronoun stereotype in the leadership discussion and use diverse pronouns to create a respectful and inclusive community which does not reinforce a one-dimensional view.   McKinsey have embraced this point of view by including their preferred pronouns in their email signatures.  To some this may seem like a fad, but it is one of many signs that the corporate world is responding to customer and employee demands about identity and being seen for who they are, not what group to which they belong.

How Do Companies Become More Inclusive

When compiling the research for this report, we were surprised how minority groups are often grouped together in statistics.  For example, it is not uncommon to see figures for BAME and female executive representation reported a single statistic.  Though we do not wish to name and shame examples (we recognise that there is overwhelming good intention behind the data) it is vitally important to remove the public sentiment of “white male + other” when companies are publicly reporting on diversity.  

It is incumbent on businesses to look at the data and acknowledge the positive sentiment. As the saying goes, “the customer is always right”, hence businesses should seek to respond to the opinion of their workforce.

Equitable Policies for He/Him/His and She/Her/Hers:

Julie Sweet at Accenture intends to “treat inclusion and diversity like every other business priority”.  On his first day at CEO of KPMG, Paul Knopp launched bold diversity objectives, stating that “Inclusion and Diversity is our legacy issue”. KPMG’s “ACCELERATE 2025” five-year strategy under Knopp put accelerating diversity and equity as the number one priority.   Our interviewees agree that their firms who invest heavily in hiring, supporting, and promoting primary carers by introducing concrete policies including remote working and a greater emphasis on childcare support that will all make it easier for men and women to juggle personal and professional responsibilities. 

Jane Fraser’s rise to CEO of Citibank is an affirming case study to challenge the conventional view that marriage and/or children needed be a T-junction in one’s career, rather with the right culture and support, you can seemingly have it all. In an interview with Fortune Magazine, Jane recalled how she was advised ‘Don’t get pregnant in your partnership year’.  However, when Jane was made a Partner at McKinsey two weeks after she gave birth and spent the entirety of her five-year partnership working part-time.

Mary Barra, CEO of GM is a good example of pushing the policy of pay equality in the workforce.  Companies we have spoken to need to be bolder about addressing this topic publicly and making commitments.  Feedback from our interviews suggest that committing to D&I goals is amongst the top 3 categories executives look for when seeking to change organisations as this is an acid test of good company culture and values.

Culture, Culture, Culture!

Well-being was the top-ranked trend for “importance” in the 2020 Deloitte Global Human Capital Trends study, with 80% of nearly 9,000 survey respondents identifying this as important or very important to their organization’s success. Empathy towards people’s working/personal life balance has never been more pronounced than now, so businesses have a responsibility to evolve a culture rooted in company values and purpose.  We have also seen first-hand how committed and effective our workforce can be in a crisis when strong company values prevail, so return to the rigidity of the post-covid era would be a step back for diversity.  A Partner at a global consulting firm said that “everybody now wants a work-life balance; we didn’t know to ask for this before”, and a shift to remote working may well herald kinder attitudes to those for whom work is not the only priority.  An increased focus on employee well-being due to covid-19 lends itself to flexible working and training that may facilitate a more diverse workforce. At the very least, commitment to the demands of digital natives will ensure an equal playing field for future leaders.

The Power of Perception

One interviewee stated that when considering a change in career, she always looked at the future employers’ personal relationships as a gauge for their opinion on D&I; namely if they come from co-working households.  To that end, culture is inspired by more than the values you state, but those you live by; it is something your staff, customers and future recruits increasingly look for in a work which is unavoidably public for today’s leaders.

One Partner recalled that during her time at a Big 4 firm, she would be given administrative tasks while her male counterparts were awarded the more technical projects.  She did not feel that this was done on purpose and the tasks were usually of similar importance, but that it perpetuated outdated stereotypes at every level of the company.  While many female leaders spoke of the hope that the next generation to lose outdated ‘old boys’ club’ attitudes, one interviewee at a boutique consultancy pointed out that if the incoming consultants are taught by the outgoing ones, attitudes will not change.  “Diversity training,” she recalled, “tends only to be attended by those who are already on board”; this must be a compulsory and company-wide activity to have any impact on any workplace. 

Mentor Networks & Champions

There is an important difference between mentors (typically generated out of these networks – there for pastoral support) and champions (those in more senior positions who would go to bat for the D&I agenda).  Hershey CEO Michele Buck credits her predecessor J.P. Bilbey with her rise to the top; he handpicked her for the position of Chief Growth Officer giving her invaluable time and experience before the board asked her if she wanted to be part of the succession planning.  Champions of any gender will make the difference, rather than mentors who guide but do not necessarily represent.  At AlixPartners, CEO Simon Freakley acknowledges a particular failing of consultancies to live up to diversity standards, especially given that clients and employees demand it.  We wish Elton Ndoma-Ogar, Head of Diversity and Inclusion at AlixPartners every success delivering on AlixPartners objectives!

Encouraging Everyone to Contribute

“Whenever you find yourself on the side of the majority, it is time to reform (or pause and reflect).”

Mark Twain

These examples go to show that the greatest advocates for diversity are not always those who may not be perceived to “directly” benefit; in short this cannot be a conversation within a minority groups, rather treated systemically and holistically by the whole business regardless of the background of the current executive committee.  PwC’s US Chairman Tim Ryan held a firmwide webcast in August 2020 to discuss their Transparency Report with the intention of demonstrating the aim “to be a leader on diversity and inclusion”.   While there is no silver bullet capable of instantly transforming organisations, pledges such as these are a statement of intent that we know through, our conversations with industry leaders, are being followed up by concrete policy and concentrated efforts to improve hiring practice and reduce, if not remove, bias to keep this chart on the rise…

Looking to The Future 

As one responder put it, 2020 saw “internal conversations about Black Lives Matter and gender diversity that would have been unimaginable a few years ago”, perhaps heralding the start of real change.  Clients are beginning to demand more from professional services firms, demonstrating leadership in the service of promoting broader societal goals. 

These stories tell us that if done right, policy changes can level the playing field, but it is a cultural change that will make the difference.  The qualities often valued in female leaders should not be confined to a gender, there is a societal shift to gender fluidity that companies must embrace to stay relevant.  Empathy and collaboration build trust, which in turn creates good culture and strong teams promoting unity rather than tribalism.  To that end, let us look to a future focused on inclusivity rather than diversity so we focus on collaboration rather than difference.  Deloitte US Executive Chair of the Board Janet Foutty perhaps explained it best when she said, “Diversity is having a variety of voices…inclusion is an environment where all these voices can really be heard”.  It is the creation of an inclusive environment where diverse experiences, opinions and methods are celebrated that will have the greatest impact on a company’s success moving forward.

At River we advise clients to primarily create an inclusive culture rather than rely on the blunt instrument of quotas, because with the right company values, diversity will thrive.  Diversity is imperative to avoid the perils of groupthink, develop more effective ways of governance, and it is our collective responsibility based on the demands of our customers and workforce.  Our research argues that diversity thrives best in a company culture where individualism is celebrated as this indirectly removes the subconscious bias to categorise by the more traditional values of race, gender and/or religion.   We must challenge societal stereotypes of effective governance to inspire, not dissuade the leaders of the future.

Ironically, the day we cease to talk about diversity will be when inclusive values have triumphed.

Click here to download the whitepaper in full: Diversity - Building Brilliant Teams

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