How do we make the business case for diversity?
For the TL;DR people, my summary answer to this is that the business case for diversity comes from embracing the commercial value of diverse teams to solve complex problems. The caveat is that, in addition to investing in recruiting and utilising diverse people in your teams, it is critical that you move your business to #OpenLeadership. Are you ready for Open Leadership?
For those serious about considering this for their business, please read on and also read the articles at the base of this piece.
Since mid-2018 when many white people woke up through the Black Lives Matter movement, there has been a major focus in so many organisations towards diversity in a demographic sense. Demographic diversity is critical and also a moral imperative, it is all too often part of the “HR” budget, linked to hiring and target numbers, perhaps even with some “L&D” budget for diversity training and (ugh) unconscious bias training (hint, there is no such thing as unconscious bias, but that is for another day). When things stay in HR and L&D silos, you can be quite sure that the CEO and Leadership Team do not see them as critical to the commercial success or failure of the business. So, how can we make the business case for diversity as a commercial imperative, not just a moral imperative?
The answer is to focus on both demographic diversity then also on cognitive diversity and applying the benefits of a diverse staff in many ways.
Today, then, I focus on cognitive diversity and biases and how reducing the risks related to NOT having diversity in your business is a massive commercial win.
Recently I have been reading (ok, listening to on Audible as I do daily walks to recover my fitness post chemo) Rebel Ideas by Matthew Syed. It is a great read (or listen), full of real-life stories of how lack of diverse thinking (“Rebel Ideas” is code for diverse thinking) has caused such failures as the dismissal of the threat of Bin Laden by the CIA, but also such successes as Bletchley Park, where a diverse team decoded the Enigma machine and shortened WWII.
The essence of the book, though, is simply to show with both stories and evidence that embracing diversity of thought and consciously building diverse teams will always drive better results, as well as reduce the risk of getting things wrong due to confirmation bias and other biases in homogenous groups.
One current example of the risk of homogeneity is the UK Conservative party which has governed the UK since 2010. It has done a great job in being demographically diverse, but the vast majority still went to private schools followed by Oxford or Cambridge, so have environmental and education similarities that create major cognitive diversity risks in creating policies.
An example of the success of recognising the need for and bringing in diverse people to a team is from many years ago when I began a business relationship with a large company in Cayman. I was asked to attend their board meeting to talk about the project. At that meeting was a board member who was very “prickly” indeed and seemed to challenge every single idea that was proposed by any board member or by me as the outside consultant. I found it quite odd at first until I saw the chairman and found them smiling as this board member interjected with contrarian thoughts and challenging questions. I realised that this individual was on the board precisely for that reason. Their role was to take the contrary view.
Over time I got to know that chairman very well, with many a beer sipped under a grapetree on the beach on a Sunday afternoon. Within those conversations, he recounted story after story about how the presence of that individual had both helped the board make different decisions and also, critically, sometimes to avoid making decisions that would have cost the company money.
So, bringing in the “smartest people in the room” is a real business risk if they all have homogenous backgrounds.
Two more thoughts to consider as you look at the business case for both demographic and cognitive diversity.
The first is that for complicated but solvable problems, little is gained by cognitive diversity. Solving a coding or engineering problem may be complicated but is also solvable by teams of homogeneously qualified individuals. The gain from diversity comes with solving complex problems. Such multi-faceted problems simply are not solvable by one or two individuals of great expertise, we need teams, and diverse teams, to bring all their different backgrounds to bear in assessing then solving complex problems in our VUCA world, something I wrote about in “Time to invest in Leadership“.
This brings me to my second and final thought. In order for diverse teams to add value, the culture of the organisation and the leadership at all levels (and also up, down and sideways) need to be Open. Diversity of thought is shut down in command and control hierarchies, what this key is open leadership.
In conclusion, the business case for diversity comes from embracing the commercial value of diverse teams to solve complex problems. The caveat is that, in addition to investing in recruiting and utilising diverse people in your teams, it is critical that you move your business to #OpenLeadership. Are you ready for Open Leadership?
Addendum. As promised, a selection of past posts referencing diversity and biases.
- Lack of diversity is a major business risk
- What are you risking due to your biases?
- Neurodiversity is simply seeing things differently
- Be careful of what you read into data
- You cannot eliminate your biases