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How Diversity in Leadership Can Lead to Success
March 21, 2016 | Category: Blog, Business Challenges
Diversity can be measured across several dimensions: gender, age, nationality, and many others. Achieving diversity in leadership is far more than a matter of creating a metaphorical “bingo card” of diversity archetypes and then filling in the squares when you get a match. At the same time, without paying attention to diversity and deliberately striving for it, it’s easy to end up with a board of directors or leadership level full of people who are so alike as to be interchangeable. Striving for diversity is good business, because it produces impressive results, as a recent study of the airline industry by consultancy Egon Zehnder demonstrated.
A Clear Business Model is Indispensable
Without a clear business model, striving to have a strong and diverse leadership base can only accomplish so much, however. In the airline industry, a clear business model is mandatory, regardless of how diverse the leadership is. Underperforming airlines in the study tended to lack a focused business model (and were largely monocultural in their leadership). So consider having an excellent business model to be a baseline, or table stakes when it comes to success. From that, building an outstanding leadership base is not only easier, but gets better results.
Clear Business Model Plus Diversity Raises Success in the Airline Industry
When a great business model is accompanied by diversity in leadership, the result in the airline industry is greater success. Top performing airlines tend to have more diverse leadership across eight diversity criteria (tenure with current airline, tenure in the airline sector, experience with other airlines, other industry experience, international experience, nationality, age, and gender). Airlines with strong business models (particularly low-cost airlines) have experienced more success than traditional airlines, and they tend to have more women in senior roles and are more likely to bring in outsiders with experience in other aspects of the airline industry or from other industries altogether.
Making Diversity Work
Making diversity work isn’t about checking off boxes labeled with diversity measures until all are filled. First of all, an increase in diversity must start at the top, with senior executives doing their part across departments and teams to increase diversity and develop leaders from diverse backgrounds. Recruiting from a wider talent pool can be another way to increase diversity, and this may span nations and industries as well as what we normally think of as diversity measures. Finally, diverse teams should be assembled so that members’ skills and knowledge bases complement each other, so they have the potential for maximum organizational benefit.
Leaders Cannot Just Pay Lip Service to the Concept of Diversity
Nobody comes out and says they’re against diversity. But proclaiming a commitment to diversity isn’t the same thing as putting it into action. The ability to work with people of all backgrounds, ages, and perspectives is an enormous advantage in reaching organizational goals. Leaders are the ones who set the tone for the organization, and they’re the ones who can do a lot to encourage effective group dynamics. It means thinking of leadership in a more inclusive way, which only makes sense in a world that’s more interconnected than ever.
Breadth of Perspective Benefits Organizations
In the “old world” where there was less interaction among diverse groups, it didn’t raise eyebrows for boards of directors to be largely homogeneous. The purpose of these boards was largely to support the chairman’s plans and assure shareholders of their purpose and gravitas. But even then there were problems, like excessive insularity. As globalization took hold in the 20th and 21st centuries, organizations began to realize that they needed broader perspectives to thrive. Diversity for its own sake doesn’t do much, but diversity in the context of an organization’s relationship to the rest of the world can broaden horizons significantly, particularly when coupled with a strong business plan.
Diversity benefits organizations as long as it is genuine diversity and not just checking diversity boxes on a spreadsheet. The insularity that ruled leadership for decades doesn’t serve well in a business world that’s multinational and that crosses countless cultural boundaries. The airline study by Egon Zehnder clearly showed that diversity in leadership benefits airlines, and that homogeneous leadership groups hold back success. I encourage you to check my blog, which can help you effect cultural transformation from the executive suite through front line workers – transformation that benefits your customers, your employees, and your organization overall.