To succeed, leaders of diverse organizations must create an inclusive environment that encourages new ideas.
Many studies show that organizations with a diverse workforce out-perform more homogenous organizations. According to McKinsey’s 2015 study “Diversity Matters,” companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians. Companies in the bottom quartile in these dimensions are statistically less likely to achieve above-average returns.
While greater gender and ethnic diversity in corporate leadership doesn’t automatically translate into more profit, the correlation does indicate that when companies commit themselves to diverse leadership, they can be more successful.
What makes diverse organizations perform well, however, is not just the number of women and minorities they employ. It’s about how included these diverse individuals are in key decision-making activities and how organizations value their contributions. It’s also to what extent they rise to senior leadership so that their voices are more likely to translate into meaningful organizational transformation and provide inspiration to others in the diversity talent pipeline.
According to a 2013 Corporate Executive Board and Center for Talent Innovation study, the “inclusion” part of the “diversity and inclusion” equation is a key enabling or limiting factor. Inclusive leadership behaviors unlock the innovative potential of a diverse workforce and increase the likelihood (by as much as 158%) of innovating effectively.
Organizational leaders must ask themselves if they provide an environment that encourages diverse people to express their ideas so that the motivation to share diverse ideation thrives. When individuals on a team feel that their opinions are valuable and sought-after by their leader, they allow themselves the luxury and the discipline of sharing ideas without creating a self-induced filter regarding ideas that aren’t in sync with prevailing thought or the historic ways of doing things.
In the absence of inclusive leadership, employees will often do the minimum necessary to achieve their own individual performance goals, rather than see themselves as instrumental to organizational performance and growth.
So how should organizational leaders practice inclusion?
The three “Rs” of inclusive leadership provide a framework to move the needle on the connection between inclusion and innovation:
1. Receptive: Seek out opinions and viewpoints on a regular basis.
Most leaders consider themselves receptive. The reality is that if we do not seek out diverse opinions on a regular basis and make that part of the structure of our meetings—as well as the way our team is evaluated—then our self-perception does not always align with the reality of our day-to-day team interaction.
Encourage sharing different opinions and viewpoints during team meetings by incorporating the concept into every team agenda. Incorporate formal KPIs or performance goals that reflect the importance, accountability, and appreciation related to new ideas about products, services, and internal process. Consider using interactive technology such as gamification to challenge the team to share ideas. In the absence of direct and discernible goals, “groupthink” and reliance on the historical way of doing things will be the norm.
If team members know that their performance evaluation will be, in part, dependent upon their contribution, even in the face of a less than popular point of view, the chance of hearing diverse ideation increases dramatically.
2. Reflective: Keep decision-making honest and transparent.
When an idea offered by a team member is not acted upon, or a decision is made that could result in the appearance that a certain team member is being favored over others, inclusive leaders explain the “why” of their decision to their team, honestly and transparently. Nature abhors a vacuum. In the absence of direct information about why a decision is made, team members are left to speculate about the “why” and will freely attribute a decision to cronyism, or to the fact that the person chosen happens to share the same viewpoint as the leader.
In the age of technology, the final decisions are often transmitted virtually and announced by email or newsletter, leaving a team without personal interaction with their leader regarding the nuances of the decision. If all factors have been included, especially those related to diverse thought that goes against the mainstream, then call that out before the decision is announced. If not, then reconsider the basis of the decision before announcing it.
3. Revitalizing: Listen for the silence.
Find ways for the quieter voices in the team to be heard. Look around the room. When is the last time you heard each team member’s voice? Are there some team members who manage to be heard, no matter what? Are there some that seem to have nothing to say?
Assuming that your organization chooses its talent carefully, the chances are pretty good that silence does not mean that there is no point of view. Rather, it may be a personality or cultural style that does not easily permit contribution without that voice actively being requested. Ask, “Is there anything you’d like to share about this subject?”
For especially shy or introverted team members, consider giving them advanced notice that you’d like to hear from them at the next team meeting. You may be amazed.
The Outcome of Inclusion
While every organization is different, small changes in inclusivity seem to have exponential results. For example, I recently challenged a client to take one singular action in each of the categories above and to survey the outcome, including asking an open-ended question relative to how team members felt about the changes that were instituted.
One of the actions they took was that a cloud-based receptacle for ideas was established. Entries were coded in such a way that ideas could remain anonymous or could be revealed by the idea donor. Team members could anonymously vote and they could also comment or clarify an idea. A gamification component was added whereby digital badges could be collected. When a certain number of badges were obtained (regardless of the identity of the donors), the team was rewarded with a team dinner, courtesy of the company.
In addition to the fact that many process optimizations took place and several new service ideas moved forward to be vetted, the overwhelming majority of the comments reflected a feeling of excitement, optimism, and engagement, including one team member who exclaimed, “Can we please shut down the portal over the weekend? My husband is getting really annoyed because I keep getting up in the middle of the day to input an idea that I dreamt about that night!” To which the team leader responded, “All our teams should all have such problems!”
Originally published in Oracle Profit Magazine.
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