Why diversity leads to strength.
I have read several business articles relating to the importance of culture fit in recent weeks, and they all come to broadly the same conclusions. That culture fit is crucial when hiring and making career decisions for yourself band for your company. I agree but also see diversity as a source of strength, and here's why.
Unfortunately companies often operate with a narrow view of culture fit. They actively seek people from within their own industry who can ‘walk the talk’ from day one because (implicitly) this represents a better investment of time and resource and a lower risk of failure. They reduce culture down to a lowest common denominator equation of low risk + looks and sounds like us = good fit. Sometimes this works and sometimes not. However what is apparent to me now as a business coach is that by conflating ‘type’ with ‘fit’ these companies are often missing a whole world of possibility and business value. I will explain.
The opportunity cost of taking a narrow, sector-based approach to team-building is often great. A broadly homogenous team will tend to look at problems in the same ways and come up with broadly similar solutions. Teams with broader, more diverse backgrounds will bring different perspectives and solutions which will lead to greater agility. This is particularly apparent in a digital world where the last thing a business needs is a narrow bricks and mortar view or the assumption that there is only one way to make change happen. I hardly need to point out the irony of driving change with a ‘this is how things get done around here’ mindset.
Some of the most effective leaders appreciate the importance of diversity and actively seek to build teams which look like a broad church. They recognise that diversity is a source of strength rather than weakness. By accepting and embracing difference rather than trying to select it out, they benefit from a wider range of experience and perspectives . If they are good listeners they will also help to mitigate their own cognitive biases and arrive at better decisions and outcomes as a result.
Gender diversity is a good example, for several reasons. Not only is the atmosphere and social mix likely to be better, there is also a lesser risk of group-think or myopia. Why is this? Quite simply because Females tend to be more independently minded and willing to point to the elephant in the room, or the king with no clothes for that matter. For the dictatorial CEO this may be inconvenient or even uncomfortable at times but surely better than unquestioned conformity? There are plenty of examples to prove the point and the fate of Enron, which was characterised by a predominantly male board and group-think is a great example.
One consequence of a lack of diversity maybe a ‘committee’ style of decision making. Most business leaders recognise that decisions by committee tend to lead to bad outcomes, particularly where that committee is of a narrow demographic. Take FIFA or the FA for example. That both organisations are run by middle aged men in blazers helps to explain some of the problems that each has faced. Like Enron they both drifted into below par decision making and in the case of FIFA, outright corruption. Poor governance and accountability may be to blame but ultimately all business is about people. The more uniform and unquestioning the culture, the more likely it is to drift in the wrong direction, and sometimes off a cliff.
I recall a passage from a Ben Elton book where a committee of Motor execs were looking for a name for their new marque car model. Some bright spark came up with the name ‘Crapee’. The CEO nodded his approval, group-think set in and the rest (including the company) was history. If this seems far-fetched consider the decision to spend millions of pounds re-branding Royal Mail into Consignia, and then back to Royal Mail again. The average person on the street could see that this was a bad idea, but not a team of highly paid executives..
The Titanic was sunk because it hit an iceberg. It hit an iceberg because it was sailing too fast. It was sailing too fast because of a fire in the coal stored in the hull of the boat which was beginning to weaken it. Hitting the ice-burg was just the last event preceded by a number of bad, incremental decisions and a lack of accountability.
How many similar examples are there in the business world, and how often could they be avoided through more robust and questioning decision-making? My case is that this is most likely to happen in an open, inclusive and diverse culture, rather than its opposite.