The ‘bio-break’ moment
I was in Philadelphia once during the summer; in an opulent office, attending a long meeting with some senior executives when suddenly I was asked a question; “Would I like to go for a “bio-break”? for a few seconds I processed this question; was it an offer to try one of their new health bars that I hadn’t heard of? Were they asking me to take an opportunity to step out and reflect on my carbon footprint? Then after a few seconds it dawned on me; “Did I want to use the bathroom?”.
Many years later the term “bio-break” has become wider-spread in US office life and I still smile at the potential for getting that situation very wrong and embarrassing myself in front of some very influential people.
However, over my years of studying and spending more time with corporate leaders, worldwide, it appears we have a new overused term; often misunderstood, miscalculated and used with such abandonment that it has almost neutralized its original meaning in certain areas; it’s not the usual “business Jargon top 10” such as “boil the ocean”, “thought-shower”, “quarter-backing” or maybe even “bio-break”.
It is the word “Diversity”.
“There is only one way to look at things until someone shows us how to look at them with different eyes.”
Stereotype Vs mind-set
Diversity is a term banded around boards so frequently to provide reassurance that they are heard to be “doing their bit” and using acceptable parlance in today’s business world. However, the term diversity is losing its impact in the boardroom where “41% of companies say they are “too busy” to implement diversity initiatives” (recent SMRH report). I’ve seen eyes roll and glaze over, whilst body language drops, as the continued topic of diversity is discussed at leadership meetings.
It is almost becoming out-of-date as a term of commercial change and, instead, we still see quotas set to support stereotypical diversity that can encourage bad decisions on board appointments that undermine a company’s readiness to compete. By asking to appoint someone based on gender, ethnicity, disability etc, is both disrespectful to that business leader but also undermining their ability to be chosen on their own merit.
There is no point parading the ideal board composition as a shining example of diversity best practice if it fails to deliver shareholder performance, or if there is no genuine process for exchanging diverse viewpoints, or indeed if the management blend is not reflected further down the organisation. When imposed, diversity in many companies has become a dirty word.
So let’s ditch diversity?
Absolutely not, diversity is essential, but diversity must be redefined in order to allow companies to be truly inclusive and competitive for the future. A company’s leadership team should embrace those with a variety of different life moments, mistakes, decisions, challenges, influences that has now shaped the way a CEO or Chairperson innovates, engages with the workforce or makes strategic decisions.
The next generation of board leaders accepts that in nature, the interaction of complementary species results in a more productive ecosystem, yet we still see business leaders surround themselves with clones and expect ongoing commercial success. It’s no surprise then that about 50 percent of the S&P 500 will be replaced over the next 10 years, if Innosight’s forecasted churn rate holds. Companies are facing extinction because they need to think differently as a group in order to ‘be’ and ‘do’ differently; Dell, Sprint and many other giants have fallen outside the S&P 500 as it is becoming more and more evident that when driving a company forward the leaders need to think beyond the superficial and include leadership criteria that will uncover less obvious attributes. These should bring different viewpoints to the table that can effect positive change such as:
- Diversity of thought: education, background, circumstance etc.
- Diversity of experience: in business, cultures, adversity etc.
- Diversity of network: influencers, relationships, geography etc./li>
The next executive generation wait, some without a “membership card”
I wholeheartedly embrace the fact many people can be worthy, entitled and create the chance to be a current or future leader, however, there is an elitist club membership for the privileged few that excludes the many who are bright, capable and talented global executives who are willing and ready today to join the top board. They have the potential to outperform in today’s market for a long time after some of the existing “club members” have reached retirement.
Please don’t play lip-service to the nepotism and “mirror and match” appointments that are still so prevalent today but instead embrace a culture of inclusivity if your aspiration is to achieve commercial outperformance. The global succession plan is strong, but only if the existing board allow them in; I’ve observed worldwide, and across all sectors, hundreds of senior people are waiting just underneath the executive board who encapsulate the real definition of diversity and inclusion but currently fall outside the club membership entry criteria. They are ready to take control so that they can connect differently to the millennial work-force, create better outcomes and innovate in a way that is more nature than necessity as part of their strategic mind-set. Is it not about time to let them in?
The Financial Reporting Council’s Corporate Governance Code in the UK last year has taken a step in the right direction. It encourages companies to focus more on the workforce and touches on culture, engagement, succession and board diversity. It also highlights Section 172 of the Companies Act, relating corporate success to the interests of employees as well as other stakeholder groups. Yet it stops short of asking companies to report on how their talent and diversity, as well as inclusion strategies, support the business model and achieve that success in the first place. Again, this is more about how diversity is measured and how inclusion is managed throughout all levels of the organisation.
“Millennials, who are already emerging as leaders in technology and other industries will comprise 75 percent of the global workforce by 2025.”
Bring yourself and your legacy to work
This is something to consider when looking at board effectiveness, succession planning, search or executive coaching; how often do you think about your executive legacy when making a decision about the people you are in business with? The executive legacy is the impact of your decisions today to create a sustainable long- term business without your own personal goal or agenda influencing it. It is obviously natural and wise to manage risk, take calculated decisions and surround yourself with people you trust but it can all be negatively impacted by the “groupthink” that companies suffer when failing to recognise what a truly diverse workforce looks like. That failure can stifle innovation, which in turn erodes value, weakens share price and puts them at the mercy of hostile bids. My view is that five key areas of leadership evaluation should be considered for all future CEO’s, Chairpeople and their direct reports: they are;
- Emotional leadership – the ability to get the best out of people and yourself
- Values leadership – the ability to make and base decisions on a core set of values
- Inclusive leadership – the ability to embrace cognitive and experiential diversity
- Commercial leadership – the ability to create superior commercial outcomes
- Future leadership – the ability to remain relevant and evolve leadership styles
It is up to you. Whether you are currently a global business leader, CEO, Chairman or CHRO leading a period of change, the moment to act and evolve is now. I have been lucky enough to have the knowledge and experience, having spent thousands of hours meeting a multitude of different companies and executives embarking upon a period of transformation, but it’s down to individuals to start to create a real movement and, collectively, build momentum. We’ve discussed that diversity is becoming overused or misplaced and a new definition needs to be considered. We discussed the elite clubs that prevent talented “newcomers” from joining the top team and we explored the notion that inclusivity, combined with the correct lenses of diversity, can and will make a business impact; it will foster new ideas, create better employee engagement, improve customer experience, and increase productivity and ultimately boost the performance of the firm.
“Salesforce is an example of a company that delivers on diversity and inclusion, making a decision to create a C-suite role of Chief Equality Officer and has worked to close the gender pay gap.”
We need courageous, bold leaders to make the right decisions and begin this period of real global change. Together, they must find new ways to embrace authentic differences, to mix up leadership DNA and to incubate innovation. Only then will they secure greater, sustainable commercial success. So what type of leader are you, what’s your purpose and, more importantly, what type of leader will you become?
Author: Jonathan Hime