Miles To Go
Volume 4 | Issue 2 | Spring 2017
Leveraging the Benefits of Full Spectrum Diversity
An organization’s ability to build and sustain diverse teams at every level of the enterprise, from the Board to entry-level roles, continues to be directly correlated to various measures of success. For example, research indicates that more diverse organizations tend to perform better financially. A McKinsey study found that companies in the top quartile for Board diversity (as measured by the number of women and foreign nationals on the Board) achieved ROE that were 53% higher as well as EBIT margins that were 14% higher than companies in the bottom quartile. Another McKinsey study found that companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry means, while companies in the top quartile for gender diversity are 15% more likely to have financial returns above their respective national industry means.
Research also shows that diversity is a key driver of innovation. Of 321 large global enterprises surveyed, 85% agreed that diversity is crucial to fostering innovation at work. Another study reported that employees of diverse firms are 45% likelier to report a growth in market share over the prior year and 70% likelier to report that the organization captured a new market. Diverse companies also tend to attract better talent. In fact, a Glassdoor survey found that 67% of those surveyed say that a diverse workforce is an important factor when evaluating companies and job offers.
When considering diversity, it is important to remember that diversity comes in two forms—identity and cognitive. Most companies focus on the first type, identity diversity, which includes age, gender and race. In comparison, cognitive diversity is less visible and is expressed through individual personalities and preferred leadership and followership styles. There are several key elements of cognitive diversity:
Introversion vs. Extroversion:
For introverts, activities with groups of people are typically energy draining, and they need to recharge by spending time alone. Conversely, extroverts gain energy from being around others and often feel drained by spending time alone.
Mental Processing Styles:
Daniel Kahneman, author of Thinking Fast and Slow, describes two primary systems in our brain. System 1, or “Blink,” is fast and efficient and is often referred to as our gut instinct. In this system, individuals react by instantaneously drawing on all of their relevant experiences and formulating an instant response. In comparison, System 2, or “Think,” must be activated. This system tends to be much more structured and fact-based; it tends to be slower because it requires work rather than simply relying on an instant response. People tend to default to one processing style over the other.
Reliability vs. Validity:
Roger Martin, author of The Design of Business, outlines a matrix that he calls “Reliability vs. Validity.” Reliability is focused on reinforcing the business of today through the corporate functions (e.g., risk management, compliance, budgets, etc.). Validity, on the other hand, is building the business of tomorrow through invention, innovation and broader creativity. In an organization, individuals tend to be either reliability-based or validity-based.
This form of leadership is all about asking good questions. It builds from the notion of “Think” vs. “Blink” as thinkers often have strong Socratic leadership to seek out facts. Yet, Socratic leadership does not work in every situation, and overusing it can exhaust everyone— it must be applied in the right settings.
Teams will always have at least one person who is truly different from the rest of the team in terms of their knowledge and understanding of a particular area of expertise. An example of this is the CTO of a non-technology company. His or her cognitive style often differs from the rest of the team—largely because his or her language, vernacular and experience are unique.
One style is not better than another when it comes to cognitive diversity— the key is to understand each of these styles, and most importantly, value the differences. What we find, though, is that even in the rare instances where a team has true identity diversity, there is generally a regression to “sameness” on the team. Members of the team who are diverse end up adapting and adopting to the accepted and dominant style of the leader and company culture to fit in, and thus, the team looks diverse, but in practice, there is little difference. We call this trend “regression to homogeneity,” and the focus on simply adding identity diversity does not address this issue. As a result, organizations must go beyond identity diversity and strive for “full spectrum diversity,” which includes both identity and cognitive diversity.
TMG Tips: Operationalizing Full Spectrum Diversity
- Unconscious Bias and Decision Making
An unconscious bias is a strong inclination in favor of or against a thing, person or group—this thrives when you over-rely on gut instinct. Unconscious bias comes into play with diversity in various scenarios, such as when making a real decision between a diverse and non-diverse candidate. The person will often use language that is positive to describe the non-diverse candidate and negative to describe the diverse candidate, essentially coming to the false conclusion that the diverse candidate needs more time to develop. To prevent your unconscious bias from influencing your decision-making, take a step back and “go to manual” to purposefully stop and think before making decisions. The challenge is to maintain a level of personal discomfort and to work against your own nature to question your gut, even when it feels right to you.
If you are a follower who is different in terms of cognitive and / or identity diversity, it is important to understand how and when to apply your differences. People can sometimes make the mistake of overplaying their differences, resulting in turning off their peers and leader. There is always going to be a dominant style and key attributes of the company culture that you need to assess your fit against. Think carefully about when and where to add your unique contributions and express your differences—this should be where you can have the highest impact.
- Investing in the Team (Offsites)
For full spectrum diversity to work, the relationships on the team need to move from transactional to empathy-based, which takes continued work on everyone’s part. The offsite is about “forming the team” and spending time on building the team’s mission, values, etc. and capturing the key behaviors that the team is going to hold each other accountable for. This should be done with a team charter. The offsite is also a great opportunity to take a deeper look at each team member and to understand their cognitive differences.
- New Member = New Team (Onboarding)
One of the biggest opportunities to help operationalize full spectrum diversity is through the team onboarding process. Onboarding a new member to an existing team can often inflate the new member’s differences and leads to the feeling that they’re “not a good fit.” To avoid this, when a new member joins the team, it is critical that you define the team as “new,” not an existing team with a new member. The idea of “new member = new team” means that you go through the process of forming as a team every single time someone new joins. This is a very simple process that allows for new and different people to join without their differences being held against them.The key to success when implementing a full spectrum environment is ensuring that both the leaders and followers participate—everyone needs to own this. This requires range from all parties and the ability to know when to conform for efficiency and effectiveness, and when to amplify the differences to get to a better outcome for everyone.