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The Diversity Dividend: How Balancing Your Leadership Team Can Pay Off

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The call for greater diversity at senior leadership levels is not new, although it has itself become more inclusive, extending beyond gender, race and ethnicity, to encompass age, education, socioeconomic background and sexual orientation, as well as experience, skills and talent.

It is also not news that diversifying leadership teams can pay financial dividends for corporations. As early as 2004, research by Catalyst, Inc. showed a significant positive correlation between financial performance and female representation at the executive leveli with female Board representation having an even stronger effect.

Most recently, a new international study by McKinsey & Co.ii showed that companies with gender diverse leadership are 15% more likely to report financial returns above their national industry median, while those with ethnically diverse leadership were 35% more likely to have financial returns that outpace their industry. Sadly, none of the 366 public companies surveyed stood out as leaders on both gender and ethnic diversity axis together.

In spite of the long-established case for balancing executive teams, the C-Suite has remained stubbornly homogeneous. Only 4.6% of chief executives of S&P 500 companies are women, and there are just six black CEOs of Fortune 500 companies currently.iii Progress has been made, but slowly and inconsistently. In their recent study mentioned above, for example, McKinsey & Co. notes that women now represent about 16% of executive teams in U.S. companies overall, calling that “measurable progress” but acknowledging that women remain underrepresented at senior levels globally.

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About the Author

Kim VilleneuveDr. Kim Villeneuve is CEO of Centerstone Executive Search and Consulting, a nationally retained firm serving the consumer sector. Centerstone specializes in executive search and leadership consulting concentrated at the Board Director and Executive Officer level. Kim is also a coach for elite executives, an adjunct professor at American University’s Kogod School of Business, and guest lecturer at The George Washington University, from which she holds a doctorate in Human and Organizational Learning. Contact Kim at [email protected] or at 425-836-8445.

References

i. “The Bottom Line: Connecting Corporate Performance and Gender Diversity” January 15, 2004 Catalyst, Inc.
ii. “Why Diversity Matters” By Vivian Hunt, Dennis Layton, and Sara Prince McKinsey, & Co. January 2015
iii. “Is there a diversity dividend?” Linda Yueh, Chief Business Correspondent, BBC News January 25, 2015 http://www.bbc.com/news/business-30973184
iv. World Economic Forum Annual Meeting, January 2015 http://www.weforum.org/events/world-economic-forum-annual-meeting-2015/sessions/diversity-dividend

StrategyDriven Podcast Special Edition 5 – An Interview with Michael Gurian, author of Leadership and the Sexes

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StrategyDriven Podcasts focus on the tools and techniques executives and managers can use to improve their organization’s alignment and accountability to ultimately achieve superior results. These podcasts elaborate on the best practice and warning flag posts on the StrategyDriven website.

Special Edition 5 – An Interview with Michael Gurian, author of Leadership and the Sexes examines the equal but different intelligence of men and women. During our discussion, Michael Gurian, author of Leadership and the Sexes and co-founder of the Gurian Institute, shares with us his insights regarding:

  • the intellectual differences between men and women and the impact these differences have on how each gender leads
  • the quantifiable impact of an organization’s gender intelligence on the bottom line
  • how executives and managers can assess the gender intelligence of their organizations

Additional Information

Complimenting the tremendous insights Michael shares in Leadership and the Sexes and this special edition podcast, are the additional gender intelligence materials and resources found on his website, Gurian Institute (www.GurianInstitute.com). Michael’s book, Leadership and the Sexes, can be purchased by clicking here.

StrategyDriven Expert Contributor | Michael GurianMichael Gurian, New York Times best selling author of Leadership and the Sexes, is co-founder of the Gurian Institute, a training organization focused on helping corporations, educators, parents, and communities understand of how the male and female brain operate differently. He has spearheaded a national effort to provide communities and corporations with training in brain based gender issues. Michael’s pioneering theory has been featured in leading national media including The New York Times, Washington Post, USA Today, Time, and Newsweek. To read Michael’s full biography, click here.

Podcast: Play in new window | Download (Duration: 34:52 — 47.9MB)

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StrategyDriven Diversity and Inclusion Forum

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“Diversity and inclusion exists when members of an organization act in a manner that recognizes and respects individual similarities and differences such that employees feel they and their work are valued and meaningfully contribute to the mission of the organization.”

StrategyDriven Contributors

Remaining relevant in today’s hyper-competitive business environment requires the full engagement of an organization’s workforce and the retention of highly talented employees. To accomplish this, leaders must capture the passion and commitment of subordinates by providing them with work that has a meaningful impactful on others and is quantifiablely measurable and rewarded; all while connecting with them on a personal level. Similarly, individuals need to connect with their peers in a way that makes them feel their contributions meaningfully add to the team and the organization’s overall success. Simply put, individuals seek to be valuable to and valued by their organizations; limited only by their abilities and desires. Without this sense of value and connectedness, a job becomes nothing more than the means to a paycheck, productivity declines toward that which is required to maintain employment, and attrition rises as employees seek more fulfilling work; all at great cost to the organization.

Gallup researchers found that within the average organization:

  • 29 percent of employees are engaged; working with passion and feeling connected to their company
  • 56 percent of employees are not engaged; putting in time but not energy or passion into their work
  • 15 percent of employees are actively disengaged; acting out their unhappiness and undermining the accomplishments of engaged employees

This research also showed that engaged employees are more productive, profitable, safer, create stronger customer relationships, and stay longer with their company than less engaged employees.

Source: Gallup Study: Engaged Employees Inspire Company Innovation, Gallup Management Journal, October 2006

Increasing workforce diversification challenges all members of an organization attempting to satisfy the individual value proposition. Differences in age, race, gender, religion, and sexual orientation to name but only a few, influence what makes individuals feel valued. Studies have shown the degree to which an individual feels valued by his/her superiors and peers in large part defines his/her work engagement and the subsequent value offered to the organization. Thus, the challenge is a circular one best solved by fostering an organizational culture that respects and embraces diversity and inclusion.

Focus of the Diversity and Inclusion Forum

While there exists a natural association between diversity and inclusion and organizational accountability, this forum will focus on the principles, best practices, and warning flags associated with establishing and maintaining a workplace environment that respects and values individual differences in order to earn full employee engagement and commitment to the achievement of the organization’s goals. The following articles, podcasts, documents, and resources cover those topics critical to enhancing workplace diversity and inclusion.

For additional information on creating a positive, motivating workplace environment, visit the StrategyDriven Employee Engagement Center of Excellence.

Articles

Principles

Best Practices

Warning Flags

StrategyDriven Expert Contributor Articles

StrategyDriven Podcasts

StrategyDriven Podcast – Video Edition

StrategyDriven Podcast – Special Edition

Documents

Tools and Templates

Resources

Books

Reports

Training Courses