Diversity fundamental to business strategy
(As originally appeared in FEI Canada F.A.R. member e-newsletter, October 2010)
By Fiona Macfarlane, Canadian Managing Partner, People, Ernst & Young LLP
In today’s highly competitive global economy, workplace diversity is no longer a “nice to have” HR policy. It’s a business imperative. Once viewed as a feel-good objective built around morality and fairness, diversity and inclusiveness are crucial to attracting and keeping the best talent. They also have a bottom-line impact. Top companies demonstrate that nurturing diversity of thought translates into a competitive edge.
While many corporations have embraced diversity initiatives, most boards lack diversity at the executive level. Diversity Briefing, a recent study published by the Canadian Institute of Chartered Accountants, finds that visible minorities occupy only 11.2% of all management roles and only 5.2% of senior management positions. Further, women only represent 16.9% of corporate officers, while more than 40% of companies do not employ female directors.
Opportunity in a changing population
Today’s understanding of diversity incorporates more than simply race and gender — it includes age, culture, sexual orientation, education, personality, skills, ways of working and unique life experiences.
Globalization and immigration are changing Canadian population demographics and the workforces of customers, clients, suppliers and competitors. And as aging populations, low birth rates and global competition for skilled workers create a new war for talent, those companies that create inviting, inclusive workplaces stand to succeed.
Boards of directors, too, stand to benefit from capitalizing on Canada’s rich diversity, by bringing new perspectives and points of view to the table. Whether in the boardroom or around the office, creating a truly diverse workplace will spark innovation and new solutions to old challenges.
In the increasingly global economy, more and more companies are looking abroad to find and seize new growth opportunities. As their operations grow more global and their workforces more diverse, fostering a work culture that embraces diversity and inclusiveness becomes increasingly important.
Bringing more diversity to boards is an excellent place to start. Executives with global experience, diverse backgrounds and different perspectives can help their companies better meet the myriad and unique needs of customers worldwide. If Canadian business leaders take steps to embed diversity and inclusiveness into their leadership and the decision-making process, it will go a long way to enhancing Canada’s position as a global competitor.
Components of a diversity strategy
There are many initiatives companies and their boards can take to develop a more diverse work environment. In our view, leaders should focus on the following key elements in their approach to diversity and inclusiveness.
- Make things interesting: Diverse viewpoints generate lively debate that can boost creative thinking. Effective leaders look to these perspectives — and the conflict they may spark — to drive innovation.
- Incorporate an inclusive mindset into decision-making: Provide training and coaching to help your leaders and managers develop the mindsets and habits needed to make diversity and inclusiveness part of how they lead their own teams.
- Make a big impact at the top: Inclusiveness initiatives that are mirrored on boards will have a powerful trickle-down effect. What’s more, diversity at the leadership level will make an organization more effective in responding to a dynamic, changing world.
- Anticipate and drive the next big thing: It has been proven that diverse groups tend to outperform homogeneous groups — even if the members of the homogeneous group are more capable. This means diversity can help businesses operate more effectively, generate new products, find different ways to enter a marketplace or come up with new ways to manage risk.
- Foster a spectrum of talent and expect to find it in unexpected places: The biggest challenge for companies in the next decade will be to recruit and retain talent. Be open to new opportunities, and take advantage of the wealth that a diverse talent pool offers.