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Thought Thursdays
Diversity: A business or political driver of strategy

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In an attempt to make sense of why diverse workplaces continue to face challenges perhaps we should start with what is understood by the term ‘diversity’. The Oxford Dictionary defines diversity as the state or quality of being different or varied; or a point of difference. The Merriam-Webster dictionary defines diversity as the quality or state of having many different forms, types, ideas, opinions, etc. or the state of having people who are from different races or who have different cultures in a group or organisation.​

Gleaning from these definitions, diversity broadly means difference. There is no value attached to diversity; it is neither described as good nor bad. Further, the dictionaries do not make explicit mention that people from different races and cultures contribute to “the quality of being different”, “points of difference” and “the quality or state of having many different forms, types, ideas, opinions, etc.” A point to highlight is that in reading literature on diversity, the latter appears to be implied.

The typical way in which diversity is reported can be seen in the following Business Week excerpt of 8 June 2009 by Nanette Byrnes:

Another factor in Burns' rise has been the strength and depth of Xerox's commitment to diversity. One-third of Xerox's 3,819 executives are women and 22% are minorities.

While difference, in its broadest sense, is central to the meaning of diversity, academic and social discourse predominantly reports on race and gender. As a colleague once remarked, “It has hijacked diversity”. The ‘privileging’ of race and gender has also drawn sharp criticism for example from people with disabilities who have taken the importance of inclusion to the office of the president. The preponderance of the issues of race and gender is the result of an expansive global history mired in colonialism, including South Africa’s apartheid history, that has propelled race and gender to the centre stage of oppression. In an attempt to make sense of why being different elicit bias we turn to theoretical explanations.

Theoretical meanings

More than three decades ago a social theorist offered the first theoretical explanations for our biases. According to the theorist, we are unconsciously drawn to people like ourselves. This means, for example, that white males are more likely to favour white male job applicants without being consciously aware of their bias. People who are different are thus less likely to be recruited, despite other objective criteria in their favour.

Critical race and psychodynamic theories, on the other hand, explains that we reject those that represent what may be described as our “split-off” parts or “shadow side”, Split-off parts refer to unwanted aspects in ourselves that we have not sufficiently processed. For example, if a white male has unresolved sexual identity issues that manifest unconsciously as homophobia, then he will reject male job applicants identifying as gay.

The social theoretical explanation suggests that we need to be aware of our human need for or favour of those like ourselves. The intervention to address the bias appears relatively uncomplicated and accessible. However given the global scale of the diversity challenge, particularly in the workplace, the issue may require additional deconstructing.
The critical race and psychodynamic insights are aligned with social theories in so far as our bias operates largely on an unconscious level. We are not aware that we are discriminating. However, an important point of departure is the explanation of why we reject the parts that we need to disavow. The parts that we find so objectionable in ourselves therefore need to be examined if we are to relate without prejudice. To understand what we as a collective find so objectionable, we need to look at the categories that are collectively discriminated against. While this list is by no means exhaustive, the commonly reported excluded categories of people are: people of colour, women, poorer social classes, people with physical and mental disabilities, people whose sexual orientation is other than heterosexual, and older people. This requires an examination of what the socially constructed meanings are of the categories and labels that devalue and even dehumanise people.

There are some organisations and certain countries that appear to be doing very well and capitalising on the value add that diversity offers, namely “the quality or state of having many different forms, types, ideas, opinions”, brought about by having people of different races, cultures and gender.

In the meantime, diversity matters

In February 2015, McKinsey released its findings on research examining diversity in the leadership composition of 366 large companies spanning different industries. In particular these analyses examined the relationship between financial perfomance (average EBIT 2010-2013) and level of diversity (proportion of women and racially/ethnicall mixed leaders).  The findings are clear: investment in diversity has an impact on the bottom line.

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While causation cannot be inferred from the findings reflected in the graphic (increased diversity results in increased profits), they show a distinct correlation between financial success and companies that invest in diversity. The logical conclusion and supported by McKinsey’s data is the ability of companies with diverse executive teams and boards to attract top talent, have satisfied and engaged employees and improved customer focus, that in turn can reasonably be theorised to be the drivers of financial performance. That diversity is beyond gender and a driver of finacial performance is underscored by the report “the Power of ‘Out” distributed by the Center for Talent Innovation. According to the report the buying power of the LGBT community were at least $700 billion in the USA in 2011 and significantly, that many preferred to purchase from gay-friendly businesses.

The Holy Grail: Diversity of thinking

Diversity of thinking inherent in a diverse pool of leaders and staff is one of the key aspects that top performing organisations profit from. Since the sustainability of businesses depends on their appetite and capacity for creativity and innovation, diversity is key. According to the McKinsey report of 2015:

Diversity fosters innovation and creativity through a greater variety of problem-solving approaches, perspectives, and ideas. Academic research has shown that diverse groups often outperform experts.

Richard Branson, founder for the Virgin Group, concurs that diversity is an important factor in the success of a business. He says:

My colleagues and I have seen time and time again that employing people from different backgrounds and who have various skills, viewpoints and personalities will help you to spot opportunities, anticipate problems and come up with original solutions before your competitors do.  

Forbes staffer Jenna Goudreau in her 2013 article on leadership reports that industry heavyweights repeatedly state that hiring people who are diverse and smarter than they are and then paying attention to their viewpoints is their best strategy for success. For example, Hala Moddelbog at the helm of Arby, the second largest quick-service sandwich chain, who according to an online search has more than 3 400 restaurants, has the following to say: 

Surrounding yourself with people of different backgrounds—including gender, race, geography, socio-economic and personality types—will help round out your conclusions. You really don’t need another you. 

While embracing diversity is unquestionably firstly a moral and ethical responsibility, it also simply makes for good common business sense. 

The legacy of South African politics: the barrier to entry 

The barrier to entering into the global competitive space and leveraging off our resources, I believe, has to do with contemporary diversity discourse. The diversity discourse is tied up in politics. Any reference to diversity includes a reference to South Africa’s inhumane political history and the government’s emphasis on political redress. Broad-based black economic empowerment  (BBBEE) monitored by the state and offering preferential procurement to companies that comply is one way in which businesses are forced to consider the inclusion of the ‘other’. The enforcement through political pressure masks the involuntary nature of some who comply. In some instances this has resulted in what is commonly known as fronting, coopting persons unqualified for the porpose onto boards. 

While the political landscape changed in 1994, the lived reality for many remains unchanged. Psychological healing after historical social constructions remains largely unattended to, allowing prejudice to continue, albeit sometimes unconsciously. The unfortunate consequence is the disengagement of courageous conversations in the workplace, with leaders expressing the view that there is little left to discuss. 

Diversity in its current usage sits on the axis of political, social and business engagement. While diversity cannot, for now, be divorced from politics, the current view unfortunately serves to obfuscate business leaders, limiting business potential.

Conclusion

Research findings indicate that businesses are being foreclosed at an alarming rate, increasing an already inflated unemployment figure. A commonly reported cause of organisational failure is the inability to innovate and remain relevant, as well as low rates of employee productivity. On the other hand, research findings consistently show that investing in diversity pays dividends. Organisations that invest in organisation-wide diversity measures, including at leadership and board levels, consistently outperform industry rivals on financial and other key performance metrics. 

The question that responsive organisational stakeholders should be asking of themselves – rather than government – is: “So what do we need to do to remain relevant and successful”? 

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Dr Sorayah Nair is a faculty member and lead process facilitator at USB-ED. She is the director of Business Health Services (BHS), a consultancy that focuses on organizational health by facilitating executives’ personal mastery and diversity/cultural alignment. Together with USB-ED she has developed a Certified Programme entitled, Disability and Inclusiveness: The Business Case, launching 1st of June 2016 and designed for employers, human resource executives, employment equity representatives, skills development facilitators, diversity/transformation managers and change agents.





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