One of the most challenging aspects for those seeking to drive diversity progress in the business world is the slow rate of change. As an organizational consultant working with clients to create more inclusive work cultures and to “move the numbers,” I know how frustrating and discouraging this can feel at times
I recently read a report, The Diversity Paradox: Capturing the Value of Difference by Looking Beyond the Numbers that caught my attention. The premise of the Diversity Paradox is that measuring and emphasizing representation data – the percent of a particular group such as women at different levels along the leadership hierarchy – fails to help diversity flourish and prevents companies from capturing the value of differences. Instead, leaders are advised to look beyond the numbers, to develop a holistic strategy, and to emphasize data collected through interviews and focus groups with employees.
There is much I agree with in this report: diversity is far broader than demographic characteristics (though salient ones such as race and gender do tend to greatly influence one’s experience and world view), and collecting qualitative information – through interviews and focus groups with employees – provides a critical piece of the puzzle that cannot be captured with representation data alone. I deeply identify with the limitations of representation data. The tag line for a diversity report I wrote in 2014 for the New York City Bar was Numbers Do Not Tell the Whole Story which accurately described the analysis.
As an external consultant for the NYC Bar, I led the diversity benchmark research for the 10-year retrospective on the ‘state of diversity’ for a group of signatory firms committed to making progress on diversity goals. In addition to analyzing the numeric data – including the representation of women and minority attorneys at key levels such as senior counsel, partner, and management committee – I interviewed those on the front lines of driving diversity change. In conversations with management committee members, diverse women and minority partners, and diversity directors at major firms, I found their depth of understanding and the sophistication regarding what’s necessary to drive diversity progress had changed markedly even as the numeric goals set in 2003 were not fully realized.
Though I have admittedly mixed feelings regarding the relative importance of representation data in assessing diversity progress, as a consultant working primarily in the corporate world I can’t help but ponder: would this laissez faire approach to meeting numeric targets be tolerated for other measures of business success? Could you imagine a company leader telling his direct reports, “I know it’s incredibly difficult to grow in this saturated, mature market where we operate so we will think of our revenue targets as suggestive rather than required.” Or, “I know we anticipated the new business line would reach profitability by its third year but based on our experience and projections, the realistic horizon looks to be closer to 25 years.” Crazy, huh?
The pressure to drive financial results and the focus on revenue and profitability is front and center for most leaders and managers. If diversity metrics are seen as low on the relative importance scale, people won’t devote the hard work and effort to create new norms. Focusing on the representation data – among a portfolio of indicators for diversity progress – is critical because it reinforces a sense of urgency, legitimizes prioritizing the effort to do things differently and disrupt the status quo, and ensures resources – both time and financial – are available to support this work.
Quotas provide an interesting case study in terms of legislating the attainment of diversity targets. Over the last decade, several European countries have put in place legal requirements for having a certain percentage of corporate board seats held by women. Norway was the first country to step forward mandating a 40% quota in 2003 and in early March of this year the German parliament passed a law requiring 30% women board seats beginning in 2016.
Research assessing the impact of Norway’s 10 year history highlights the benefits of this approach. Despite acute fear that there would not be enough qualified women to fill board positions, new women board members were better qualified than their predecessors due to companies activating previously untapped networks of talent. Norway found an increased likelihood of women in C-suite roles for companies targeted by the law, and a decline in the gender pay gap of board members.
Research studies underscore that greater gender diversity is linked to enhanced innovation, increased sales, and greater profitability. There IS a strong business case yet diversity efforts are too often marginalized and under resourced. We greatly underestimate just how powerful – and self reinforcing – the status quo is. So while representation data is far from the whole diversity story, keeping it front and center seems essential for the foreseeable future.