The new global mindset: fostering diversity and inclusion

(As originally appeared in Director Journal, April 2010)

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By Jeannine Pereira, Inclusiveness Leader, Ernst & Young LLP

The economy may be back from the brink, but doing business has changed for good. As a new performance agenda emerges, it is clear that innovation is key to helping organizations emerge from the recession — and is essential for future success. But how do we spark innovation? This is the question on the minds of many leaders today.

Innovation is not something that just happens when a group of people sit around a boardroom table talking. It comes from new ideas, new thinking and new ways of looking at the world. These three things share a common denominator: diverse perspectives.

In a recent survey, EY found that many companies around the world fell short of the diversity of thought and culture needed to handle today’s global business challenges. The survey, The new global mindset: driving innovation through diversity, found that boards of directors seldom reflect the global reach of their businesses. In fact, almost half of the companies operating in 25 or more countries had at most only a couple of directors from outside the company's home territory. Yet survey respondents cited globally experienced staff as the leading cultural factor in conducting business around the world.

Diversity of thought reaches beyond differences in race and gender

One thing is certain: the crisis has mandated that we rethink how we have always done business. We need to develop a new global mindset. Topping the list of what we need to examine are talent management and development and the connection between diversity of thought and innovation.

In a globalized world, diversity of thought is not necessarily about race, gender, ethnicity or sexual orientation, which we traditionally have associated with diversity. It is a spectrum of attributes, including culture, generation, educational background, skills, personality, education, and life experiences. Research shows that capitalizing on these differences is a powerful factor in encouraging innovation.

Leading companies have shown that there are visible benefits to the bottom line from leveraging inclusive ways of thinking. But care is needed because diverse teams are rarely mediocre — they are either highly successful or highly unsuccessful. Developing an inclusive culture where all team members can successfully bring their perspectives to the table and be heard becomes essential. The research is clear: well-managed, diverse teams will typically outperform homogenous teams.

Create a culture of innovation

Leaders must create a culture that encourages diverse thinking to bring about profound and positive shifts in organizations, but doing so takes work. In our interviews with academic and business leaders as part of our research, we found four principles that leaders must consider:

  • Get the mindset. Focus on transformational leadership and think about what it will really take to bring about a cultural shift in the organization. 
  • Nurture a spectrum of talent. Proactively develop diverse teams. Look for talent in unexpected places. 
  • Anticipate the next “big thing”. Leverage diversity of thinking and capabilities to identify new products and services. 
  • Consensus is not always desirable. Healthy clashes of ideas boost a company's energy and creativity. If these clashes are to be effective, they need to be moderated by intercultural and inclusive management skills.

Cultural sensitivity is an important step to evolving as a leader, but it must be backed up by a commitment to develop and support a different organizational mindset and the capacity to learn from failure. It takes focus and dedication to be attuned to one’s own behaviour as a leader, to be open-minded and to understand that all those who represent less dominant positions in your organization need to have a voice too.

Canada is at an advantage

With its deep multicultural roots, Canada is in a unique position to harness our country’s rich diversity. It is time that Canada’s organizations foster and encourage leaders who bring different skills to the table, think about familiar problems in new ways and reject the kind of groupthink that may have contributed to the global financial challenges the world is facing.

One way for directors to turn this conversation into action is to attend or organize roundtable events with other business and community leaders to foster new ideas around integrating diversity into our organizations. For example, in late 2009, EY worked together with Corporate Knights to bring together corporate executives, directors, academics and thought leaders to lay out an action plan around board and executive-level diversity. As a result of this discussion and a survey of 10 top performing companies in 2009, Corporate Knights published Diversity Whitepaper: Vision for Inclusive Boardrooms; Canada as a leader

One of the most important lessons global businesses have learned from the recession is that diversity of thought is key to future success in the new economy. That’s why it is so important for Canada’s business leaders to take a close look at how they think about diversity— the transformation must first take place in the mind. One step toward evolving as an inclusive leader is being sensitive and aware of inclusiveness issues. This must be backed up by commitment to develop and support a whole different organizational mindset, willingness to change and the capacity to learn from failures.