S1E1: Why diversity matters to corporate reputation
Diversity and inclusion policies have made headlines over the past few weeks as organisations respond to the protests following the death of George Floyd. In this episode we step away from the important social arguments for equality and inclusion and instead take a commercial view: how does diversity impact reputation and, in turn, my bottom line?
A lack of diversity harms your organisation’s reputation in two ways: because you appear to lack diversity and therefore can be accused of unequal opportunity or tokenism (direct reputational harm) and because of the results of that lack of diversity (indirect harm). That indirect harm happens because less diverse team can perform less well, create products that have troubling flaws and communicate in a way that speaks to the few rather than the many. Taken together, these harms represent a massive risk to your reputation. To tell you more, I'm joined by two excellent guests:
Sarah Atkinson, CEO of the Social Mobility Foundation
Sarah Churchman OBE, Chief Inclusion, Community & Wellbeing Officer, PwC United Kingdom
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Welcome to Why Everybody Hates You, an audio support group for reputation professionals. If you have any responsibility for how people talk, think and feel about your organization, then you're in the right place. My name is Daisy Powell-Chandler and today we're talking about diversity.
This episode was recorded before the death of George Floyd and the wave of protests that has followed. It wasn't meant to be the first episode of this series, but now feels more urgent than ever, so we are publishing it earlier than expected. Diversity has for years seemed like the quintessential battleground between the woke left and the Daily Mail Reading Oldies, and that can make it tempting to steer well clear of the whole debate for fear of offending someone, no matter how good your intentions. The stream of important books coming out constantly on race, gender, social divides, and other barriers to inclusion and high levels of tension. Currently overflowing into the streets, can sometimes make comms professionals feel as if we need a new degree in social theory before we're qualified to comment. We are here to help. Over the next 25 minutes will talk about the reputation consequences of a lack of diversity and inclusion, and I'll be joined by guests from the third sector and from a FTSE 100 company to get into why diversity matters to reputation and what you can do to start making positive changes within your organization to risk proof your reputation today. We don't dwell specifically on race today. This episode is about inclusion more broadly, but we will be returning to the topic later in the series with a special episode talking directly about black lives matter and corporate reputation.
Over the past few years in the UK, we've seen expanded efforts to monitor and improve diversity in organisations of all kinds. That's great news, but it also creates more reputation risks for the companies that are left behind. And if an annual clutch of bad headlines in the Guardian isn't enough to convince you, or you think that your organization is too small to be noticed, then how about some numbers? 14% of the UK is not white, 51% is female 16% of the UK has a disability of some kind and 7% does not describe themselves as straight or heterosexual. Even assuming some substantial overlaps between these groups, the numbers are significant. And by not hiring, catering for or appealing to these groups an organization cuts itself off from more than half of the talent, the consumers, the influencers, the potential allies. We ignore these groups at our peril. Add to that the fact that more and more clients, potential employees are asking for information about the teams that are working for them. 85% of employers on the Social Mobility Index believe that their clients care about the social class mix of their workforce. 96% said clients cared about the race and 99% cared about the gender balance of that team. Plenty of food for thought. I spoke to Sarah Churchman, chief inclusion community and well-being officer for PWC see to see why this matters to them.
what we do know is that having a very clear diversity policy, having aspirations to change and improve are important to our reputation. But at the end of the day, diversity and inclusion, particularly having a diverse workforce, is about good commercial sense. It's about being a commercially successful organization, so talking about what we're doing, the diversity space enables us to attract talent that might not ordinarily think of applying to the firm. There is a virtuous circle, so if we are more attractive to people who are different to bring different backgrounds and experiences and may well look different. For example, just thinking of some of the protected characteristics, it's as I say, it's a virtuous circle. They bring different experiences, they bring different skills which allows our business to transform and deliver services where hither to we may not have been known for delivering services.
It's clear that PWC see view diversity and inclusion as central to acquiring the best possible talent and in turn, to acquiring the most clients and delivering the best possible work. But if the commercial sense of these decisions is so clear, then why isn't everyone viewing diversity in this way? And why do so many organizations struggle to create diverse and inclusive workplaces?
It's again, it's a mindset thing. I think for a very long period of time people saw interventions to improve diversity as acts of positive discrimination because they assumed that we already were an equal opportunities employer that we were an inclusive workplace because quite frankly life for them had been good, they'd never felt excluded. You know they'd managed to progress their careers and they were in positions of seniority, so that that mindset whereby people believe their experiences is everyone else’s experience has been the biggest challenge to overcome. So a lot of our work has been around helping people to understand that just because they experience the world or indeed our organization in a certain way doesn't mean that's a shared experience. And there are certain aspects of our culture that do marginalise people and it's their responsibility as senior leaders, influences, influencers to change those things and to become more inclusive. So that's you know, that's quite a big shift. Getting people to realize that maybe the status quo isn't as egalitarian for everybody else is, they thought it was because that's how they'd experienced it.
There are two key points here. The first is the allure of the status quo and the 2nd is an entrenched negative feeling about positive discrimination. Why is the status quo so appealing? Well, for a start there is a feeling that it surely couldn't have grown up and lasted this long unless it had some good things about it. But unfortunately the pre existing balance is often been created by historic inequality. What does an MP look like for example? Well, mostly they look like a white well off man. So when you go to select more MPs, what do you look for? Mostly white well off men and that's who shapes the system into which new MPs will come and work in the future. And that creates long-lasting imbalances. The second reason why we haven't made more far reaching changes is a deep ingrained suspicion of positive discrimination. The theory goes that positive discrimination means trading off quality for diversity. That we will have to abandon all quality measures in order to hire people from more diverse backgrounds. But if we look a little deeper at this theory, we see there's some problems with it. First, it assumes that individuals can be assessed separately. When we know that the attributes of the whole team are important for understanding how well the team will perform. The second is that though there are some circumstances where what matters is having the best at one specific specialism, these are typically simple or repetitive jobs with little team interaction. For example, processing timber. This is an additive task, which means that each step is built on the achievement of the previous one, so. You cut down a tree. Then the next person might select
the wood to be used for making planks. In each of these cases it does make sense to hire the one person who is best at that one single task, but the most sought after prestigious jobs, the ones about which there is most outcry because of a lack of diversity. These are the least likely to take place within this kind of single skill structure, which makes it much harder to assess your performance on that one individual quality measure. Instead, knowledge workers interact in multidisciplinary teams and they have to be able to build with other team members. Here, recruiting simply for speed or test scores overlooks the fact that diverse thinking has its own benefits, and they include creating higher functioning teams. In his recent book Rebel Ideas, popular science and management writer Matthew Syad has pulled together myriad examples of when diverse teams have helped organisations to succeed. He starts by documenting how the CIA had enough information before the 9/11 attacks to prevent them. But lacked analysts with the cultural or language skills to interpret them. And he shows that a lack of diversity leads to weaker teams with your climbing Everest or developing new computers. It isn't that the members of the CIA team were stupid or poorly educated, it's that they were all too similar to either challenge each others assumptions or to bring in new viewpoints that might interpret the data differently. Diverse teams function better because they possess different knowledge and analytical tools. And if that sounds a little too much like a recruitment problem and not one that relates to reputation. Well, consider this when your teams are less good, so are your products. And if you want to know about that, you can just ask the reviewer's of the photo recognition software produced by Microsoft and IBM. That software
can only detect black faces correctly. 20 to 34% of the time. 20 to 34% of the time. That doesn't sound very good, does it? Especially not when you compare it to the 99% success rate for white faces. Poor products are bad for company reputation they’re bad for sales and they’re bad for morale.
Even if the product is good and identikit team can lead to awful communications, meaning it won't sell well. Consider one example from my time in politics. I was working on the referendum campaign to try and keep Scotland in the UK. It was a close fight and from the polling we could tell that many of the swing voters we needed to win over were closer to agreeing with the other side then with us. As chance would have it, voting day was almost exactly one year after the release of the final episode of American black comedy crime drama Breaking Bad. If you were wondering how on earth these two events can possibly be linked, then you are not alone. Which is why at the start of summer 2014, just about to get on a train to Scotland to conduct yet more focus groups, I was opening a parcel full of draft campaign adverts and swearing fruitilly. A small crowd gathered around my desk and unilaterally declared my trip to Scotland completely pointless. Breaking Bad had been incredibly popular with London's hipsters, and continued to be a major pop culture reference among a particular kind of elite Metropolitan Liberal. Which is presumably why there were no doubt very hip denizens of a major London advertising agency who thought it would be a great basis for a series of Scottish billboards. Breaking Bad said the text. With an image of the UK splitting apart at the Scotland England border. The text
and images were all styled like the TV series and the concept apparently was that the campaign would get Scots talking and even if they hadn't heard of Breaking Bad, they would go home and Google it. Leaving aside for a moment, this mindboggling belief that in a campaign to persuade an entire country that you were right, the best approach was to hope that they would be curious and Google it. Let us consider for a moment that I was due to test these adverts in Edinburgh, which has its own famous Scottish drug culture documented in the exceedingly famous film Trainspotting that had been watched by a lot more Scots than Breaking Bad had. And that much of the opposition's rhetoric about the union had focused on how Scotland was ruled by an English elite that didn't understand or care about Scottish culture. It was an extraordinary failure by renowned agency whose team very evidently lacked both essential cultural knowledge of the debate in which they were actors and the diversity to challenge ideas internally before sending them to be ridiculed by focus group participants. The groups were painful, but very short and the adverts thank Heaven were never used. Otherwise I fear the result might have been a wee bit different. From a reputation point of view then, inclusive teams are a no brainer. They result in a better product, better communication. You get better talent and you can talk to a broader swathe of UK Society. What's the sticking point then? Why is this so hard? One of the main culprits is cultural fit.
The temptation is easy to understand. You've got a great team in place, but you need more capacity. You want the new high to fit in seamlessly and not disrupt your busy teams flow, so you're really explicit about your working culture in the advert. You conduct multiple interview rounds of different members of the existing team and you pick someone who has all of the right qualifications and that you would all happily socialize with. Great job. You have just hired a clone of your existing team. Your distinctive work culture will certainly have been off putting for some of your interviewees during the process. The ones who are left you then carefully tested to make sure they didn't make your team feel at all uncomfortable or put them out of their comfort zone. You've made sure that the new hire will agree with you all as much as possible, and then on top of that, you've chosen someone who also shares attributes with your out of work social circle. Unfortunately, this process also ensures that your new hire brings very little additional insight to your team and probably means that they look very similar to the rest of you. As an example, in one office where I worked it was an inside joke that one of the directors only hired introverted white men who like cricket.
Even when individuals from outside the norm are able to break into a new area, their hard won victory is itself fraught with danger.
If you are constantly carrying the burden that you you know you perhaps didn't finish school or didn't go to University, and you're now in a professional environment where it's assumed everybody has a degree, you have a choice, and it's a horrible choice. If there's a conversation about University and you're in that conversation and you didn't go to University and you're a very senior person now, and a professional firm you have a choice. You either pretends that you too can join in with that conversation. Yes, yes, and you tell lies and you construct something that's false. That's not you. And that's deeply uncomfortable and burdensome, or you're honest. You take a risk and you say. Actually. I where I grew up and went to school I didn't have those kind of opportunities and so I left school at 16. I didn't go to University and you have to trust that your workplace environment, your peers, your seniors, the people who report to you will not think badly of you will not lose confidence in you will not judge You for that and in some environments that simply isn't the case. I talked the other days were very senior chief commercial officer in a in a big organization that people would absolutely know and recognize, and I won't name it for obvious reasons. But she said to me, if I tell people I didn't go to University, they lose confidence in me regardless of my track record. The things I've done in my career they, you can see it in their eyes, they suddenly say “She's not qualified to do this”, and so she is very careful about when she does and doesn't reveal her background.
The voice you just heard was Sarah Atkinson, chief executive of the Social Mobility Foundation. She and I went on to talk about tokenism and how damaging that can be both for the employee experience and the company’s outcomes. Imagine if you want to know how black people feel about an issue. Or what viewpoint an adoptee might have? In this situation, it might be great to have someone in your office whose brains you can pick and have their analysis and knowledge feed into the decision. But it also puts a lot of pressure on them, not only to perform, but also to act as a mouthpiece for maybe millions of people. If you need to understand that audience, then maybe you should do some actual research. As well as the toll on the individual involved, this kind of Tokenistic thinking or performative diversity can lead to some really crummy decision-making. There are other downsides to tokenism as well, not least that it can allow us to let ourselves off the hook a little.
Tokenism can be problematic when it comes to socioeconomic background, because it can allow you to persuade yourself that it's OK really. You know stories of somebody who started in the post room and is now on the board stories of somebody who started with a Saturday job and is now the chief executive. Stories of somebody who started selling things off a Barrow and is now a retailer C-Suite operator. Those are very comforting because they show you that it can happen. But they can also persuade you that it's all OK in our environment. Those individuals can thrive and as ever with any kind of individual story you can miss both the enormous efforts and luck that that individual has had to put in and has had to ride on to get there. And also the fact that for every one of those stories there are scores, hundreds, thousands of stories of someone just not getting that same achievement. So I think that can be really dangerous, albeit that those stories are also important part of the fabric of telling the story.
And those thousands of human personal stories are what make people so angry about diversity and inclusion. And why it's not going away anytime soon so you need to grapple with it in your battle to improve the reputation of your organization. If you want to put some figures to it, then how about this? Black men are more likely to be found guilty at Crown Court and black Caribbean pupils are permanently excluded from school at three times the rate of white British people. The office for National Statistics reports that the gender pay gap among full time employees in the UK still stands at 8.9%.
More than 1/3 of disabled people experience severe material deprivation, a rate nearly three times that of nondisabled people. And research from across the USA and UK has found that fear of encountering prejudice makes LGBT individuals less likely to seek out healthcare, which directly impacts their health outcomes. If you look at social background then it's worth bearing in mind that children from professional backgrounds are 80% more likely to go into a professional occupation such as law or medicine than their less privileged peers. And even when those from working class backgrounds are successful in entering professional occupations, they earn on average 17% less than their more privileged colleagues. So no this issue isn't going to go away anytime soon So what conclusions can we draw from all of this? Well, a lack of diversity damages your organization's reputation because the unequal spread of opportunity and hardship make individuals, communities, and professional stakeholders angry. But a lack of inclusion also poses indirect risks that you are missing out on the best talent producing inferior products and communicating less effectively. All of these are reputational risks. On the flipside, PWC call inclusion a commercial no brainer because it is the engine powering their transformation from an auditing company to a tech giant. But I worry that the numbers are so big and the inequalities so intractable that many of us feel clueless about where we even start to help. So to help you with that decision, I asked our guests for their advice.
These are profound and complex issues and real solutions have to be profound and complex and involve everyone in society. But in your organization, even if your organization is quite small and has limited capacity, making a difference on this agenda can be really simple. If you ask your employees three questions when you were 14 where you on free school meals, did you go to a private school, a grammar school or a comprehensive school? And had your parents been to University? And if you understand the answers to those questions and you can assure and have a conversation with your employees to make sure that whatever the answers are. You will support your employees thriving and flourishing and you will have conversations about what that means and what might get in the way of that. That's a social mobility inclusion strategy right there, and it could be as simple as that.
So when you get back to your keyboard, why not start by asking whether your organization measures those three indicators. It's a nice simple step to get you started. And Sarah Churchman also had some homework for you.
My one tip would be to get comfortable with feeling uncomfortable. If we as as leaders as people in business are making decisions about our team about promotions for example, or who we're recruiting. If you feel very comfortable that you're promoting somebody who's a dead cert, is a good fit, you're probably doing nothing to improve the diversity of the team. People often talk about or historically I've talked about diversity as feeling a bit risky. You're taking a risk on somebody and generally, your taking a risk on somebody because they're not like you. So my view has always been if you feel a little bit uncomfortable about a talent decision that you're taking. your making, but you're probably doing something that's good for the diversity agenda and further furthering the diversity and inclusion agenda.
There's a bonus tip in here. The first point is that leadership have to model these changes. It isn't something you can just tell HR to do. This is about who you hire and who you show the organization that you value. But second of all, it's about discomfort and getting comfortable with not choosing someone who's going to agree with us all the time. So there you have it. Three points of homework. Measure your diversity successes. Look to model diversity and inclusion at the highest levels of your organization and get comfortable with feeling uncomfortable. But Sarah Tuchman had one final tip for people who aren't quite ready to change their approach to HR just yet.
Go for a coffee with somebody who is very different to you, or have a virtual coffee in these current times, with somebody you don't know very well because by virtue of that you know people well. It's probably because they’re like you have something in common with them but reach out to people you don't know so well.
That's everything from us. A big thank you to my guests Sarah Atkinson of the Social Mobility Foundation and Sarah Churchman from PWC for sharing their experience and tips. I hope you will join me next time when I'll be talking to someone who isn't called Sarah. Ghislaine Halpenny from the British Property Federation will be here in two weeks time to tell me why everybody hates the property sector. In the meantime, if you've enjoyed this episode, please do find us at whyeverybodyhatesyou.co.uk
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