Harnessing Diversity to Drive Business Results
In Acclaim Energy we have over 15 years of experience The same thing happens when leading and accelerating business results through strategic energy management. We partner with our customers to help them make the best decisions regarding how they purchase, use and manage energy, so they can reach their business goals for savings, sustainability, productivity and growth.
In this new article, I explain how the learnings we have acquired from energy management can be extrapolated to another impactful HR subject: how to harness diversity in your workforce to drive business results. Diversity of ideas and perspectives is critical, as it is important to solicit input from old, young, women, men, disabled and various economic levels to reach the best conclusions.
I mentioned in a previous article how important it is for a Company to understand the advantages and drawbacks of different kinds of energy sources. It is common knowledge in the energy industry that having a balanced generation portfolio gives the greatest flexibility, as you can match business needs with a variety of alternatives in sourcing, each with different cost, availability, and reliability features.
The same thing happens when leading and managing your workforce. There is a clear strategic advantage in being able to draw from a larger pool of knowledge, experience, abilities, attitudes, and views of the world. “Synergy” is a term that has been abused to the point of almost becoming a buzzword, but the fundamental truth is that, with the right level of interaction and coordination, the total can indeed be greater than the sum of its parts.
Coordinating the Interaction
This is a key point. How to coordinate the interaction with others so that their differences do not become an obstacle, but an opportunity. While it is easy to understand the theoretical concept of how this diversity can work in an organization’s favor, achieving those benefits in practice can prove much more challenging. Think of something as simple as time management, for example. In multinational organizations, there will most probably be cultural differences regarding how late you can be to a meeting before being considered “late”. Punctuality will have absolute importance for some team members, but only a relative one for others.
And this is only one example. Diversity also extends to other dimensions. Fons Trompenaars and Charles Hampden-Turner provide an excellent frame of reference for this in their best-selling book “Riding the Waves of Culture 1 ” . Among others, they mention that there will be differences in how each culture or group thinks about diversity:
1. Relationships and Rules: how many universal rules should apply, or if there can be room for particularities in their application depending on the relationships, we have with the people living under those rules.
2. The Group and the Individual: how much weight should be given to the benefits of the group compared to the benefits of the individual.
3. Feelings and Relationships: how much should we favor emotion over reason, or vice versa, when interacting with other colleagues.
4. How Far We Get Involved: to what degree we engage others in specific areas of life, and if we should segregate out the task from the relationship, or let all spaces of life permeate into each other.
5. How We Accord Status: if we prefer to accord status to people based on their achievements, versus ascribing it to them by virtue of age, class, gender, education, etc.
6. How We Manage Time: how much we think of time as a sequence of passing events, or if we perceive past, present, and future as interrelated so that ideas about the future and memories about the past both shape present actions.
7. How We Relate to Nature: the role people assign to their natural environment, and if they believe we should try to control nature or let it take its course.
I especially like this framework, because it provides a way to think about diversity without having to assign labels to different groups. The use of labels can make it difficult to harness diversity in a productive way, as they contribute to generating an “us versus them” mentality. Think about the meme “OK Boomer” as a measure of the adversarial relationship there seems to exist among generational groups, or just look at the current political situation in the US or in Mexico to see the extent to which people will go to justify that their view of the world is “right”, while that of their opponents is “wrong”.
You do not have to go very far to find examples of diversity seeming to get in the way of productive interactions at work. If you work with a team, in an organization either large or small, most certainly you already have a couple of anecdotes about it. However, it is almost as certain that you also have at least one example of how having access to a wider pool of knowledge and experience proved instrumental in solving a problem or seizing an opportunity to benefit the team or company.
The key for success lies in helping an organization coordinate these interactions in a way that is conducive to positive results. Not only keeping people focused on perceiving the differences as opportunities, and not as obstacles, but also validating the right of everyone in the team to have their voice heard, without fear of rejection or disqualification on a personal level.
Generating a Culture of Open Communication and Collaboration
The first step in creating this type of safe environment is making everyone in the organization aware of the value of diversity for the business. In 2004, IBM was already finding that diversity could fuel profits, when a diversity initiative that tripled the number of female executives and doubled the number of minority executives, resulted in a thirtyfold increase in their small- and medium-sized business sales over a 5-year period1.
Research from McKinsey & Company2 shows that:
• Companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians.
• Companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians.
• Companies in the bottom quartile both for gender and for ethnicity and race are statistically less likely to achieve above-average financial returns than the average companies in the data set (that is, bottom-quartile companies are lagging rather than merely not leading).
The unequal performance of companies in the same industry and the same country implies that diversity is a competitive differentiator shifting market share toward more diverse companies. Once you have shown everyone that diversity and inclusion make for good business, remind them that they are also appreciated by current and future workers. A survey from Glassdoor, a website where current and former employees anonymously review companies, and one of the world’s largest job and recruiting sites , shows that two thirds of job seekers say that diversity is important to them when evaluating an offer.
After establishing the importance of diversity for the organization, a clear message must come from a strong corporate sponsor, ideally the CEO, stating the kind of behaviors that they expect of everyone. And, even more importantly, leaders at all levels should become role models for these behaviors, meaning in turn that they must receive the necessary training to align themselves with those guidelines.A key success factor for this stage of the process is to be as specific as possible when identifying these desired behaviors. It will not be enough to send out a general message like “give everyone an opportunity to express their opinions”. To be impactful, messages must be hand-crafted to fit the culture and processes of the organization. A much clearer guideline would be something like: “When meeting either in person or virtually, we will allot the last 10 minutes to make sure we have heard the opinion of all parties having a stake in the subject, and we will actively ask those parties that have not yet expressed theirs”.
Finally, you must try to reinforce these desired behaviors whenever and wherever you see them happening. Some companies encourage their teams to publicly recognize their co-workers and provide them with tools and channels to formalize this recognition. Some even give out awards to those that have done a great job at becoming role models.
Some Final Thoughts Regarding Diversity
While some types of diversity can be easily identifiable, like gender, ethnicity, or age diversity, we need to be aware of other, less visible ways of being different. One that has been discussed recently in business literature, has to do with personality, and that of extroverts versus introverts. While extroversion seems to have a more direct relationship with career growth, or at least with the relative speed of that growth, there are traits that are more associated with introversion, like better self-awareness, analytical skills, reflective personality, and others, that can be an asset to any team. Organizations should acknowledge this and actively work to provide opportunities for their introvert team members to express themselves and share their insights in a way that is both comfortable and safe.
As I mentioned earlier, there is business value in being able to harness diversity positively and productively. So, when instituting this into organizational culture, you should also include a way of measuring the impact of these changes not only on the satisfaction and engagement of your workforce, but also on your bottom line. Generating a clear line of sight on how these initiatives can drive profit, like in the IBM example. This is the best argument to extend these concepts throughout the company.
Thanks for reading, and do not hesitate to reach out should you want to talk more about this very interesting subject. I am always up for a good conversation.
