These days, company culture is more important than ever. It is instrumental in differentiating one company from another and bridging the gap between the c-suite to the entry-level. While most C-level executives recognize the importance of strong company culture, only 28% of executives believe they understand their company culture, and only 12% of executives believe their companies are driving the “right” culture. Here are three signs your company has a culture problem.
Team members are under-performing.
Assuming that organizations are hiring qualified employees, a case of underperforming staff is an opportunity for leadership to better understand potential flaws in an organization’s culture. Statistics show that lagging productivity is often tied to employee engagement, which results from a number of culture challenges. Failing to address the underlying factors at play can contribute to compounding issues in performance and culture alike.
Leadership is not living up to organizational standards, value, or brand.
72% of employees are highly engaged in organizations with effective leadership. Leaders in a weak culture commonly don’t adhere to, and often don’t even know, their organization’s values and leadership standards. This scenario can result in severe ramifications. Poor leadership can have a rapid trickle-down effect through an entire organization. It can erode talent and culture alike. Weak culture andweak leadership handicap an organization’s ability to attract, retain and advance top talent, ultimately hindering its performance and growth.
Employee engagement is a lagging.
Employee engagement is a barometer of culture. 86% of employees in strong cultures feel their senior leadership listens to their employees. Employees that feel included and empowered are more invested, passionate and satisfied, which also reflects in innovation and output (link to leadership that unlocks innovation). Inclusive leadership is the foundation of a strong organizational culture and the primary force that upholds it over time.What are some other common leadership shortcomings that can damage organizational culture, employee engagement, and overall performance?
Culture is extremely complex, but also absolutely instrumental in changing the way your talent, and teams perform over time. Join a more in-depth discussion on how inclusive leadership can be THE catalyst for a healthy organizational culture that drives employee engagement, retention, advancement, and team performance at this upcoming webinar.
You can also share your D&I experiences and challenges with other professionals and receive expert insights in a more personal setting during this upcoming Open D&I Roundtable Q&A.
In the modern world, impactful and prolific innovation is increasingly critical to company success. Some companies are learning that lack of diversity and inclusion in their ranks is inhibiting innovation. You’ve surely seen the headlines and statistics around the lack of diversity and inclusion in tech. For a shocking, real-world example of the result, check out the “racist paper towel dispenser” that was clearly an end-product of a team that lacked internal diversity and interest in the marketplace they intended to serve.
On the other side of the coin, there are also companies discovering that one benefit of becoming more inclusive organizationally is a corresponding improvement in the ability to quickly leverage the diverse perspectives and experiences of each member of the workforce to innovate new products and user experiences. Ultimately, a high-trust environment with significant diversity can develop quickly into a culture of meaningful innovation. An innovation culture is one in which employees feel that their company places a high value on the contribution of diverse ideas from everyone without placing blame on ideas that fail. Instead, all ideas are encouraged and employees are empowered to test those ideas in an atmosphere of experimentation and learning agility. Empowering employees to be experimental without fear of failure fosters even more employee engagement and organizational success.
So why does innovation matter? What are the opportunities that Diversity and Inclusion present? And what are some approaches your organizations can get started on?
Before you continue reading, feel free to sign up for our upcoming open office hours or our Lead Inclusively webinar where we will share a very detailed discussion on the topics of inclusive leadership, and practices that best harness team innovation.
Why it matters
The need to innovate is higher than ever.
According to one study, 84% of executives say that innovation is important to their growth strategy. Industries, technologies, and economies are changing at exponential rates, making a company’s ability to innovate more important than ever. Workplaces that are both diverse and inclusive are associated with higher individual performance because employees are better able to innovate (+83%) and maintain engagement.
Non-inclusive companies produce less innovation
As mentioned in the 2017 PwC Innovation Benchmark, 54% of innovating organizations have trouble bridging the gap between innovation strategy and overall business strategy. Innovation occurs more readily in organizations and teams where everyone feels safe enough to share their ideas and debate the merits of ideas without feeling fear that there will be negative consequences for doing so.
Companies that do not innovate become irrelevant
In today’s world, companies must accept industry disruption as a given. In fact, according to a recent survey, 80% of executives think their current business models are at risk to be disrupted. Companies that failed to innovate include former monoliths of industry such as Blockbuster, which failed to innovate when Netflix came on the scene and was rendered irrelevant within four years of Netflix launching its streaming services.
The opportunity
Inclusive Behaviors Maximize Innovation.
Employees at companies with inclusive leadership are more likely than employees at non-diverse companies to take risks, challenge the status quo, and embrace a diverse array of inputs. They are also 75% more likely to see their ideas move through the product pipeline and make it to the marketplace. This means that a company’s ability to embrace inclusive leadership translates to its business results and can drive the level of innovative thought that leads to successful market disruption.
Inclusive companies are more innovative and reach more new markets.
One inclusive behavior is allowing teams a safe space to respectfully debate one another’s ideas. A recent Berkeley study found that teams that debate the merits of one another’s ideas (instead of brainstorming more collaboratively) come up with 25% more ideas. Additional research from the Boston Consulting Group found that Diverse and Inclusive companies were able to increase market share 15% more and capture new markets 20% more than the non-diverse workplaces.
Diversity drives increased revenue.
Companies that are more diverse than average have generated 38% more of their revenue from innovative products and services, compared to companies that are less diverse. These numbers demonstrate that bottom line dollars are on the table when innovation and inclusion are successfully embedded into the organization’s processes.
From intrapreneur programs to innovation labs, you can check out page 21 of our new whitepaper to see what some companies are already doing to meet the increasing demand for team innovation.
Leadership that fosters inclusion and innovation in the workplace
Good organizational leadership can be difficult to achieve. We all have so much going on that the ‘Inclusive Leadership Best Practices’ manual isn’t always top of mind. With that said, many leaders have developed habits in management and communication that over time can alienate team members and corrode their team culture.
Here are some two rarely-practiced ways that leaders can actively avoid negative management habits and leverage Inclusive Leadership in a way that empowers team members, harnesses collective team capital and boosts innovation.
Express genuine appreciation for all ideas.
Innovation thrives in an environment where team members are able to contribute diverse ideas freely, without feeling ego or fear about the outcome. Despite the best of intentions, many leaders tend to express appreciation only for ideas that they perceive as having a high value. This tendency can actually cause team members to feel pressure about having the “right” idea before bringing it to the table, which can slow the innovative process. As a leader, remember that every idea contributed by a team member is an opportunity to encourage future ideas. Even if the idea presented isn’t one that will work, your first response should be, “Thank you for that idea, I appreciate you thinking out of the box. Keep that up.” In other words, place value on the person, rather than the idea, and make team members feel positively about bringing future thoughts to the table. Not acknowledging the thought, effort, or excitement of a team member risks alienating them, discouraging them from sharing future ideas, and thus squandering future potential opportunities. Simply acknowledging the effort, expressing excitement for the idea, and transparently explaining potential barriers and next steps can go a long way.
Never forget about the quieter voices.
Eliciting participation from the quieter voices ona team makes those individuals feel more comfortable and engaged. Over time, this feeling empowers them to actively ideate and openly approach leadership with future ideas. Beyond shy or introverted team members, in many workplaces being the ‘only’ (i.e. only woman, racial minority, LGBTQ etc.) on the team can also make some people feel less invited to actively engage and share ideas. Leaders that effectively notice and actively elicit the quieter voices, when the proper opportunities arise, are more likely to bring out the potential for innovation on their teams.
What do you think?
Can you recall a specific experience when you as a leader were able to leverage inclusion to encourage innovation on your team? Perhaps you have been on the receiving end of a particularly inclusive leader’s encouragement (or perhaps you’ve experienced the opposite!) Share your experiences in the comments below. We would love to hear your thoughts.
Six months have passed since Governor Jerry Brown signed California Senate Bill 826 into law. As you likely have heard, this law mandates all publicly held companies in the state of California (where I am proud and fortunate to reside) to have at least one woman on their Board of Directors by the end of 2019.
Allow me to provide some history and stats behind the California mandate for women on boards
This new step toward workplace gender parity has a particularly relevant and personal significance to me. Depending on the public perception of this new law, I stand to either gain or lose by this legislation. As an accomplished female entrepreneur, litigator and corporate partner, now currently the Founder and CEO of a technology-enabled Diversity and Inclusionconsultancy, I have a few things to say about the public discourse and debate of this issue.
This law is hardly the first of its kind. As a former employment law litigator, I vividly recall asimilar debate surrounding Affirmative Action: a saga that, for the sake of brevity, essentially established the unconstitutionality of formally legislating ‘anti-discrimination’. Detractors had plenty to say: How could the government possibly force a race or gender filter on objective processes like job applications and college admissions criteria? How could that be fair or equitable? Isn’t it just reverse discrimination? And what about complacency? Surely mandated diversity will eliminate any incentive for underrepresented minorities to strive for excellence if they could use this criterion to gain an “unfair” advantage!
We are hearing similar lines of reasoning surrounding CA SB–826. In hopes of spurring healthy, respectful conversation, I’m adding my voice to the mix to share three compelling reasons we don’t need to apologize for “legislated inclusion.”
We are responding to a history of legislated exclusion
Like many women who have been forced to advocate for themselves their entire life, I feel I sometimes sound like a broken record. However, I strongly believe this discussion begins with knowledge of the extended history of “legislated discrimination”before we can discuss the idea of “legislated anti-discrimination.”
So first, let’s acknowledge the fact that we have been plagued by legislated discrimination in this country for decades. For example, by law, women could not own property until 1900, did not possess the right to vote until 1920, anddid not have the right to independently own a credit card till 1970. Legislated discrimination has also plagued African Americans.
We must also be reminded that although slavery was abolished in this country in 1865, women who birthed a mixed-race child faced imprisonment in Maryland until 1955. Schools that hosted black and white students in Virginia faced immediate closure until 958, and Arkansas law required designated whites-only sections in all school buses in 1959. Generally, the Jim Crow era actively suppressed black advocacy and rights and upheld separate but equal doctrine well into the late sixties. All the above laws, terrorized and plagued millions for centuries.
As Simone de Beauvoir said in 1949, “The relation of woman to husband, of daughter to father, of sister to brother, is a relation of [slavery].”So, women of color face the double-barreled challenge of surmounting a history of legislated exclusion on two fronts.
The stats don’t lie; inequality in the workplace still exists and isn’t getting better
The simple argument I espouse is that in a country with a history of legislated discrimination, we need legislated inclusion to accelerate the leveling of the playing field.The World Economic Forum indicates that at the current rate, we won’t achieve global gender parity in the workplace until 2100. In fact, the World Economic Forum even pushed back its timeline between 2016 and 2017 indicating that progress is slowing, and even regressing, in some places. Globally, some 2.7 billion women are legally restricted from having the same choice in jobs as men, face higher unemployment, lower pay, and more threat to their job status and personal safety according to the UN.
In the US today, despite the fact that women comprise57% of college graduates, we only comprise 31% of entry-level hires, and by the time we reach the C-Suite, women make up less than 20% of the workforce. For women of color, that number is less than 6% and only 5% of Fortune 500 CEOs are women—all arerates that have remained consistent for several years. The percentage of women in STEM (despite continued efforts) has also remained at around 20% for the past 19 years.
In workplace culture, women are excluded from key opportunity and deprived of important relationships that are instrumental to professional development and career advancement. Men are 46% more likely to have a higher-ranking advocate in the office, more likely to receive a raise, promotion, and job. Women more often have toprovide evidence of their competence. Finally, women, many times find themselves excluded from stretch assignment and are many times the only woman on a given team or in a workplace. All the above factors continue to contribute to the exclusion and our collective inability to move towards workplace gender parity.
Those who argue that our society is changing, and the market is indeed naturally working in favor of equality must face the harsh reality that this is, in fact, not significantly the case and the need for formal Diversity and Inclusion initiatives is a necessity.
Legislated inclusion benefits all of us.
I think what scares some is the premise that advancingone person must surely be to the detriment of another person. This perspective ignores the fact that gender is being used as an additional selection criteria, not as a criteria that substitute for competence. There are thousands of qualified female board members and the more parity at board and senior leadership levels, the healthier our organizations.
Inclusion (and subsequent legislation) is the practice of fostering the necessary environment that transforms culture. McKinsey research shows that the most gender-diverse companies are 15 percent more likely to outperform their peers.The moreinclusion, the moreemployee engagement, leadership development, talent development, and innovation in our largest organizations. That is ROI that cannot be ignored or squandered.
Because we are overcoming a history of legislated exclusion, because inequity in the workplace is not improving quickly enough, and because the most diverse, inclusive organizations produce the greatest business results, I am unequivocally unapologetic about this new law. In fact, I am inspired and driven by the opportunities it stands to present for qualified female board candidates.
When signing SB-826 into law, Governor Brown acknowledged his skepticism as to whether this new law would prevail if tested in court but highlighted its importance in sending a message that we cannot patiently stand by and “hope” that gender parity will reach us by the next century.
Connect with me on your Diversity and Inclusion experiences and share your thought-leadership at my upcoming open Office Hours
What do YOU think? I would like to use this article as an opportunity to engage in dialog. My opinion is just one of many and discussing controversial issues in diversity and inclusion in an open and thoughtful manner is indeed the most effective way we will move the needle towards gender and racial parity together.
If you have more interest in this matter and some of the work we are doing in the field of Diversity and Inclusion, I encourage you all to see our Lead Inclusively Whitepaper.
What are some other common leadership shortcomings that can damage organizational culture, employee engagement, and overall performance? 
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