Save your business from the bear trap: Don’t fail like Lehman Brothers

From saving your business from breakdown to staying ahead of the competition, we all know diversity matters. But what does it really mean?

To understand more, The Memo spoke with one of Britain’s leading experts in the field.

At the London 2012 Olympics and Paralympics, Stephen Frost was Head of Diversity and Inclusion and is now leads Frost Included, a leading diversity consultancy.

AW: How do you define diversity?

SF: Diversity is a combination of DNA, individual life experience and social context.  In other words, it’s infinite.

So yes it’s gender, and sexuality and race.  But often someone’s unique life experience will be intrinsically related to those traits and often be even more salient than those demographics.

Diversity is a reality.  The choice (or debate) comes in terms of the extent to which we want to include difference in our lives or not.

How do you get people excited about diversity?

By reconciling self interest with collective interest.

Despite public claims to ‘champion’ diversity we know that many executives privately prefer sameness – just check out their choice of PA, residential location or holiday destination. The lack of buy-in is evidenced through behaviour as opposed to proclamation.

So we have to make the case for ‘skin in the game’ and can do this in a couple of ways.

The first is by pointing out the dangers of sameness. Very smart, but similar, people can make catastrophic mistakes.  Think Lehman Brothers, Kodak, Swissair, Nokia, I could go on.

Brilliant people have blind spots. Brilliant arrogant people with few checks and balances have lots of blind spots.  Homogenous teams can be more susceptible to risk and endure lower resilience and lower productivity over the medium to long term.  No manager wants their team to be a failure.

The second is by pointing out the benefits of difference.  If two men have an arm wrestle, with the goal being to score as many points as possible, the majority will score few points and may even end up hurting each other.

If two women have an arm wrestle, the majority will instinctively cooperate and score more points than the pairs that compete.  One can advance one’s own self interest (score more points) by letting the other side win too.  This is about enlarging the pie for all parties involved.

How do you counter the cynics?

Cynics will often make comparatively quick decisions on the basis of scant information, yet require a Nobel Prize winning essay to even consider diversity.  Rather than fall into that bear trap, I would understate the case and simply point out the logic.

We can’t prove causation between diversity and financial performance (or value add in various forms).  But we can absolutely prove correlation.

Which sectors are leading when it comes to diversity?

I’ve had a fairly unconventional career that’s been fun.  From my experience I don’t think any sector has cracked this and when you look at all sectors there are some strong counter-stereotypes.

For example, I have worked with the military in several countries and seen how they are absolutely embedding inclusion and diversity in operational command procedures. This is very real.  The Israeli army, for example, could not tolerate low performance. But their early adoption of including women and gay people on the front line was seen as an organizational strength, not charity.

Working with the Royal Navy shortly after they overturned the ban on gay people serving was fascinating, culminating in them being the first military in the world to march in a Pride parade, literally walking the talk.
The British telecoms company O2 banished resumes/CVs from recruitment and focused on three factors that best impacted success in role – judgement, drive and influence.  The online process no longer asks for university or gender in order to decrease bias and has resulted in a much more diversified applicant pool.

And which ones are lagging behind?

I would say banking still is, because despite its claims to the contrary many organizations are still stuck in a compliance mentality – why we have to do this, rather than a sober articulation of why we want to do this.  The same would be true for large parts of the public sector, or smaller businesses subject to less transparency.

I’d reserve real focus for the media and entertainment industry.  Why do we still have non-disabled actors “cripping up” and straight actors “playing gay”?    Why was the first black lead family on British TV only broadcast in 2016? These sectors and more have room for more self-reflection, humility and improvement.

How do you work out which areas to prioritise in diversity?

I would argue we should prioritise the areas of biggest market failure.  For example, a fifth of the world’s population is disabled and most of us become disabled if we’re not already.  Yet employment of disabled people is staggeringly low, averaging 2-3% of the workforce in UK organizations.

Another massive area would be our inefficient use of cognitive diversity. All over the world, in some countries and organizations more than others, brilliant introverts are massively underutilized, sitting quiet in meetings while loud people talk over each other and reach suboptimal decisions.

A way round this is simply to look at your people, reconcile them with the work you want to get done and your true business priorities and proceed from there.  It could be a massive outreach programme to disabled talent or it could simply be the way you run meetings to include brilliant wallflowers.

The areas we tend to prioritise are those that are politically expedient to do so.  That’s not to say, for example, gender and sexuality aren’t massively important, of course they are.  But the focus on gender seems to be about senior white women, who are not exactly the least disadvantaged group in society.  And the focus on sexuality could be partly because it doesn’t cost anything to challenge homophobia.

If that sounds cynical it is also the fact that women and LGBT people have been rightly successful in winning over lots of allies (men and straight people) and partnering in an inclusive fashion to achieve benefits for all.

Is equality the goal? If we achieve this, will we outgrow the need for a diversity strategy?

If you believe in the definition of diversity I articulated above then I don’t think we will ever achieve equality.  I think equity and equality of opportunity are possible.  As much as I remain an optimist, the world is in a pretty dangerous place right now and sameness, not difference, is the default position.

That’s why we will never outgrow the need for a diversity strategy.  As long as human beings keep associating with similar people (a process called homophily) then difference will always need to be encouraged and taught.  The best way of doing that is through experiential leadership experiences.

Diversity is a reality, inclusion is a choice.

Stephen Frost is Principal of Frost Included and author of Inclusive Talent Management and The Inclusion Imperative.