Academics and top consulting firms have been expending considerable effort on demonstrating the business case for gender diversity. The result? More diverse firms do seem to do better; at the very least it seems easier for them to achieve financial performance above industry averages than it is for less diverse firms. It’s hard to prove that this relationship is causal, but the general consensus among authors is that diversity can be leveraged as a competitive advantage. A higher degree of diversity seems to translate into better problem solving and decision-making, higher creativity, and more innovation, as well as improved understanding of customers.
If this is the case, then why in 2018 are we still having the same conversation? If the corporate world is aware of the benefits of fostering an inclusive culture, the why do women occupy fewer than 30% of leadership roles in corporate Canada, and make up less than 20% of CEOs? The consensus among authors is that the main causes are gender bias, prejudice and discrimination against women—an answer that is as dismaying as it is simple.
The elimination of gender bias is difficult, otherwise we wouldn’t be having this conversation in 2018. So what companies can do about it? Measures such as quotas that force placement of a higher number of women into leadership may provide rapid results, but may not do much to help get rid of the bias, and won’t change a company’s culture. While working to eradicate gender bias and discrimination from the organizational culture, companies need to focus on processes that are or can become “bias-proof.”
A good example of this is the famous experiment conducted by the Boston Orchestra in the 1950’s. In an attempt to increase the proportion of women in the orchestra, which at the time was below 10%, the orchestra started implementing blind auditions. After noticing that the curtains separating judges from applicants didn’t help much to solve the problem, they eventually isolated the reason: the sound of the women applicant’s heels against the hardwood floors of the audition room effectively unblinded the audition. They subsequently started asking candidates to take their shoes off before entering the room, so that judges couldn’t discriminate, consciously or otherwise. Making this little change helped to achieve an almost 50/50 distribution of male and female musicians in the final rounds of auditions. This change did not get rid of the judges’ personal biases, but it was a process modification that helped them refrain from making biased decisions.
Working on the implementation of a new diversity management system is not an easy task, especially when the efforts are not tied to the company’s vision and strategy. In order to effectively implement change and tackle challenges that are deeply rooted in the culture, organizations need active involvement at all decision-making levels, strategic, tactic and operational. Furthermore, we believe that the conversation should stop being about top-down versus bottom-up processes. While top-down channels are used to communicate vision and strategy in order to get policies and processes aligned with them, bottom-up processes are necessary too, in order for leaders to be aware of the issues faced at the lower levels, as well as to measure the impact of the policies and practices implemented. Rather than linear, the process should be cyclical, with constant evaluation and with an eye to continuous improvement.
What should this process look like? Two Italian experts in this field, Rosella Riccò and Marco Guerci, have proposed an integrated process of 8 stages (we’ve brought it down to 7) to effectively implement a diversity change-and-management process. They recommend starting from the strategic level, moving on to the tactical, then the operational level, and finally closing the cycle again with the strategic level re-thinking the whole process. Based on this framework, we propose an integrated and multidirectional diversity management process.
During the first, strategic stage of the process, those in charge of strategic decision-making must lay out a new vision, embracing diversity as a competitive advantage, and allocating the necessary resources to effectively implement new policies and initiatives.
The second stage consists in the establishment of an Inclusion and Diversity Committee (IDC), which should operate with an independent budget. This committee should be under the leadership of an Inclusion and Diversity director, and include members of both tactical and strategic levels from across the company. Among the responsibilities of the IDC will be the outlining of the company’s strategies, policies and practices aimed at managing diversity.
At Stage 3 (Stage 4 for Riccò and Guerci), the IDC is responsible for managing the laying out of policies and practices that aim to improve gender balance. A report from consulting firm Oliver Wyman found that there are three main areas in which most women think their employers should concentrate their efforts: establishing a talent pipeline strategy; engaging in thoughtful and courageous approaches to flexible work arrangements and other family-friendly policies; elimination of the pay and career-progression gaps.
The Operational Level comes into play at Stage 4, which involves implementing, communicating, monitoring and evaluating the work done by the strategic and tactical levels. It is of the utmost importance that the IDC and the HR department ensure the support of line managers and supervisors, who will be in charge of ensuring the proper execution of practices and policies, and of course, front line employees, who will actually be executing these.
Stage 5 involves communicating the company’s commitment to gender diversity. All of the efforts and the commitment to gender diversity policies and practices should be communicated, both internally and externally.
Stage 6, involves making gender diversity accountable. At this stage, the IDC should begin conducting periodic evaluations of the policies and practices implemented thus far, assessing their impact on gender balance. This evaluation should include quantitative and qualitative metrics, such as an Internal Labor Map and other indicators such as measures of women’s rate of attrition, employee climate surveys, and training assessments.
Finally, Stage 7 requires rethinking the whole process. Diversity management is a continuous learning process requiring constant revision of the policies’ reach and effectiveness. In this sense, the IDC team, in coordination with the HR department, board of directors, senior executives and other key stakeholders, should meet periodically to review the diversity mission, policies and practices against their specific goals.
Of course, the way these 7 stages get implemented will depend on the organization. Obviously larger firms will be able to invest more. A smaller organization might not be able to afford to have an Inclusion and Diversity director; instead, they may choose to roll the Inclusion and Diversity function into another senior role. So what we’ve laid out here is just a pattern, which must be tailored to the needs and capacities of the individual organization. But companies of all sizes need to take a thoughtful approach to diversity. It’s not a problem any organization can ignore.
The bottom line here is that companies need to increase the number of women in leadership positions—not just because diversity drives better performance, but also because is the right thing to do. The research is clear: women are not being treated in the same way as men in corporate Canada. While working towards a change of paradigms and the elimination of gender bias in cultures both social and organizational, companies can at the same time work toward the development of processes that can help them get there sooner. These processes, however, will only be effective if they are laid out thoughtfully, receive ongoing evaluation and renewal, and have the commitment and participation of decision-makers at every level of the organization.
Martin Fabro is a graduate of the Ted Rogers MBA program at Ryerson University, and a Research Associate at the Ted Rogers Leadership Centre. Chris MacDonald teaches ethics and critical thinking at the Ted Rogers School of Management. He is Director of the Ted Rogers Leadership Centre, and is founding co-editor of the Concise Encyclopedia of Business Ethics.