The CEO’s Role in Bringing It to Life
The research is clear: gender diversity is correlated with both increased profitability and long-term value creation.
Numerous research sources, including McKinsey & Company’s 2015 Delivering Through Diversity and their 2017 data set provide the insights. Companies in the top quartile for executive-level gender diversity had a 21% likelihood of outperforming fourth-quartile industry peers on earnings before interest and taxes (EBIT). They had a 27% likelihood of outperforming them on long-term value creation. McKinsey also found that top-performing companies had developed active inclusion and diversity strategies and committed to them.
Deloitte’s 2017 Global Human Capital Trends report found companies with inclusive talent practices in hiring, promotion, development, leadership, and team management generate up to 30% higher revenue per employee and greater profitability than their competitors.
Yet, many well-intentioned companies struggle with exactly how to become inclusive. Two proven strategies emerge front and center:
- CEOs take ownership for creating an inclusive culture and then drive accountability among leaders.
- Diversity and inclusion is woven throughout the organization’s corporate infrastructure, just like compliance, IT and security.
A place to belong
“Today, we talk about diversity AND inclusion because having a sense that you belong and your contribution is as important as everyone else’s, is the starting point,” explains Libby Sartain, a Professional Director serving on the Boards of Shutterfly, ManpowerGroup, AARP and the Society for Human Resource Management. She is also former Chief Human Resources Officer for Yahoo! Inc. and Southwest Airlines. “If you do not create that cohesive feeling of belonging, you will not reap the rewards of diversity,” she says.
Sartain will explain how to Create a Culture of Inclusion at WFF’s Executive Summit July 23-24 in Dallas. LEAD THE WAY: Strategies and Insights to Advance Gender Equity will engage executives at the director level and above in company teams to create organization-specific strategies to move the needle on gender equity.
“Some organizations have a ‘check the box’ mentality that sees the HR or D&I offices as responsible for creating inclusion but they have not made it part of everyday work life and every aspect of the employee experience,” Sartain observes. “You have to do more than say you value everyone’s ideas. Every leader has to own it. You need to make sure that sense of inclusion is happening at midnight with the team closing a restaurant, with the people transporting and delivering goods on the road and in the C-Suite every day.”
Start here to create an inclusive culture:
Demonstrate clear CEO commitment and drive robust trickle down
CEOs can’t make it happen alone but it has to start there. And, although just saying it won’t make it happen either, you have to start there too. The CEO and senior team must publicly commit to gender diversity and put the infrastructure in place to make it happen.
McKinsey finds that companies that go further infuse a commitment to diversity throughout their organizations, particularly among middle management. They ensure the efforts are well resourced, encourage role modeling and hold executives and managers accountable.
Share the business case
The 2017 Women in the Workplace Study by McKinsey & Company and LeanIn.org found that employees who understand that gender diversity leads to stronger business results are more likely to personally commit to the issue.
Get more women into line roles
McKinsey noticed that executive teams of outperforming companies had more women in line (revenue generating) roles versus staff roles so they tested the hypothesis to see if it’s closely correlated with financial outperformance. Although women are significantly underrepresented in line roles across the board, the top-quartile companies had 10% of women filling line roles compared to just 1% in lower performing organizations.
Even when we recruit for diversity, we often manage for homogeneity. “Very few organizations actually support the uniqueness of their employees and listen to different ideas,” Sartain says. One of the most powerful messages she heard at Southwest was from the CEO who said, “We hired you because you’re you. We want you to be yourself.”
Use analytics to identify business priorities
Conduct internal research to prioritize D&I investments and align them with company growth strategies. Analytics can also help identify patterns of gender bias, disparities in compensation and rewards, and bias in hiring and promotion.
Food Industry ready to LEAD THE WAY
Our industry already attracts more women than any other outside the federal government. Now it’s up to us to create the corporate cultures that will welcome women at all levels, value their unique perspectives and enable them to thrive and our businesses to grow.
As part of its LEAD THE WAY to Gender Equity initiative, WFF is working to drive CEO commitment to culture change, increase by 50% the number of CEOs committed to advancing women leaders and to providing a CEO Roadmap to equip senior leaders with proven strategies to promote gender equity. 2018 Executive Summit will engage you and your teams in doing exactly that.