Shaping diversity: part one

The diversity of European diversity

Europeans know a thing or two about diversity. After all, a neighbour in the next town might speak a different dialect, or the nearest big city might be over the border in a different country. Living in a patchwork of cultural values and standards, Europeans have an intimate understanding of difference − linguistic, social, political and legislative – and have sought to build a governing apparatus that takes inclusion as its core tenet. Perhaps this is why many countries in the continent have often taken the lead in attempts to foster workplace equality, whether that is legislating for quotas of women to take their place in the boardroom, or providing world-class parental leave and support.

But any multinational company with a pan-European workforce must necessarily get to grips with the variety of societal and workplace norms, and the attendant difficulty of imposing an overarching company culture, or one-size-fits-all approach, especially if that includes a US-centric D&I model that doesn’t take European issues into account.

Ian Johnson, founder of Out Now, a Netherlands-based LGBT diversity consultancy, encountered the complexity of employee attitudes when compiling a global study of LGBT workplace inclusion in 2014. ‘For example, France and Germany are places where the topic of one’s personal life is far less discussed generally at work, not only around sexual orientation and gender identity – it is more about personal privacy and the barrier between your private life and your work life.’ So, he advises, ‘to achieve your strategic goal in terms of diversity, you need to understand how culture affects inclusion on the ground, country by country.’

There is a tendency among business leaders in Europe (and elsewhere) when talking about this issue to read ‘diversity’ as ‘gender diversity’, or even, reductively, as ‘women’. But what is striking is the diversity of diversity issues facing modern businesses, which must be equipped to serve employees and customers comprised of different races and ethnicities, religions, immigration statuses, ages, abilities, sexualities, and more. The experiences of the leading European general counsel featured in this report touch on a range of topics, but we acknowledge a particular breadth of response on the subject of gender equality, largely because corporations in Europe have developed more evolved mechanisms for measuring, growing and nurturing diversity in this arena. We hope that future reports will reflect a changing landscape of D&I as it becomes ever more rooted in the fabric of corporate thinking.

The strategic imperative

There is a proliferation of data available to sell the case for diversity to businesses as the enemy of groupthink and as a tool for problem-solving and risk-spotting, quite aside from the moral imperative to level the playing field for all workers. Our interviews uncovered a few data-led examples that offer companies food for thought.

McKinsey & Company has surveyed the field of gender equality for over a decade and revealed a clear correlation between gender diversity and company performance, finding that the leadership styles often employed by women tend to inspire better performance by reinforcing values, instilling accountability and driving results.

In its 2015 report LGBT Diversity: Show Me the Business Case, Out Now analyses what it calls the ‘staff retention dividend’, or the likelihood of an employee leaving their organisation if they are able to be open, or not, about their sexuality. The report reveals annual savings of millions of dollars a year for large companies that foster an openly LGBT diverse workforce that feels more valued, is therefore more productive and, crucially, is more likely to stay in post.

Anthropologist and behavioural economist Tinna Nielsen (founder of the Denmark-based non-profit Move the Elephant for Inclusiveness) summarises thus: ‘We have two or three decades of research showing that if groups apply diverse perspectives, knowledge and insights to a challenge, then those groups always outperform the other groups.’

The message has reached the GCs we spoke to, all of whom have done the maths and see a clear strategic advantage to embedding diversity across their corporations and within their departments. Alexandre Menais, executive vice president (and former group GC) of French digital services company Atos, typifies an attitude expressed by many of our interviewees: ‘The development of diversity within the group is seen as a way to improve operational performance, meet our stakeholders’ increasing expectations in this domain, continue bringing excellence in people management and enlarge our talent pool, both in-house and via external recruitments.’

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Embedding inclusion and working differently

‘There are new expectations from a new generation, new innovations challenging the way we work, and then there is the obvious – ensuring we get the best from our people in an environment where they can thrive because they are part of a diverse and inclusive workplace.

We need to stop making excuses as an industry about the challenges, and just do what we need to do to make the obvious more of a reality.’

Sandra Wallace, joint MD for Europe & Middle East and UK managing partner

All too often, organisations focus on diversity without considering inclusion. Inclusion means creating a culture where difference is genuinely valued and where everyone is given an opportunity to contribute and have their voice heard. Failure to create a culture of inclusion can mean an unwelcoming or even hostile workplace, and the consequences are high attrition, low engagement and poor performance. The aim, therefore, is to increase diversity within teams and to create an inclusive culture for everyone.

Nevertheless, the consultants and diversity researchers we spoke to highlighted the work still to be done. Despite the argument for diversity being largely won, there is often a gulf between theory and practice as many corporations struggle to get beyond the rhetoric and embed approaches that generate real systemic change. In the words of Tinna Nielsen, ‘[the] norm is excluding ideas that are not familiar to us, excluding new knowledge because it doesn’t resonate in our minds, and excluding a brilliant idea because it comes from somebody we don’t like, don’t trust or who is not from our own tribe.’

Diversity is not the end goal

For Lisa Kepinski, founder of the Germany-based Inclusion Institute, the reason for this exclusion is that often leaders see diversity and inclusion as separate from the company’s overall strategic goals, and as an end in themselves. But, she argues, ‘Diversity and inclusion are the enablers for achieving the goals of the organisation.’ Embedding a true change programme is the only way to ensure a lasting culture of inclusion, and avoid a box-ticking exercise that masks a return to default behaviours – no matter how much unconscious bias training is undertaken.

Many of our interviewees made the point that even when a diverse workforce is achieved, the work continues. Nia Joynson-Romanzina, founder of D&I consultancy iCubed, describes the need for an ‘economy of belonging’, where diverse employees have a voice and a real stake in the organisation. Inclusion is the lived experience of working for a company, and is therefore much harder to quantify and benchmark. Sandoz’s general counsel, Barbara Levi Mager, hits on a key method for evaluating inclusion – that of retention: ‘If people enjoy working in a place, you have created a diverse and inclusive atmosphere where everyone feels empowered and respected.’

But ‘invisible’ differences often go under the radar, and are therefore more difficult to track and address. Companies face a productivity drop-off from employees who feel unvalued, as outlined by the work done by Out Now in the field of LGBT inclusion. But there may be societal or religious factors that add a layer of complexity to the task of creating a safe space for these workers. However, we found that interesting work is being done in this field. Out Now, for example, has developed a soon-to-be-launched web-based tool called How.LGBT that allows LGBT employees who are in the closet to access LGBT inclusion intranet material without being tracked by company servers, as well as a ratings system whereby potential staff members can research workplace culture before accepting a job offer.

Even within visible differences, the extent of privilege is often not obvious to dominant groups. But there are ways to share perspectives. At technology company Dell, EMEA GC, Benedikte Leroy, told us that much work has been done to engage men in the gender diversity debate. For example, the company is an active participant in Catalyst’s Men Advocating Real Change (MARC) initiative, which is designed for exactly that purpose, and helps to identify unconscious bias and develop a more collaborative and inclusive leadership style, understanding that things may impact women in a different way to men. ‘A practical example is that women don’t like flying late in the evening, arriving in a foreign country and having to take a cab. Being aware of small details like that has really opened men’s eyes in terms of how you schedule meetings,’ says Leroy.

The company’s ‘employee resource groups’, have also driven learning and understanding. Built on its culture of inclusion, Dell has established groups focused on gender, ethnicity, sexual orientation, sustainability, and others, but any team member can join any group. ‘In fact, 25% of our global workforce has now joined one of our ERGs and as part of our 2020 Legacy of Good plan, we have a goal to have 40% of our global workforce in an ERG by 2020. We have learned a lot from them, and they are really driving the D&I agenda and inclusive culture at the local level,’ she explains.

Counting to be counted

For now, however, much of the data collected in mainland Europe on D&I is concentrated on the diversity part of the equation. Numbers cannot be a goal in themselves, but many of the consultants we spoke to were in agreement that data collection is a vital diagnostic tool for building an accurate cultural analysis of where your organisation is at – before any work can begin. However, they told us, diversity practitioners and in-house legal teams are often deeply cautious about sharing the data collected, sometimes even with the senior leadership of an organisation. This would appear to be a concrete opportunity for in-house counsel to further their company’s D&I agenda via constructive dialogue around the risks of gathering, showing and sharing data, and avoid the scenario described by Joynson-Romanzina: ‘I’ve seen organisations where the leaders think everything is fine but when they see the numbers they’re gobsmacked.’

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Counting to be counted

As Peter Drucker said, ‘what gets measured gets managed,’ and there is certainly a far greater focus on data analytics around diversity and inclusion than a few years ago. Using specific data can challenge misconceptions that are based on anecdotal evidence or myths rather than reality. Setting numerical targets can focus the entire organisation on a specific goal, and can galvanise action.

However, analysis of measures tends to focus on outcomes rather than the underlying issues. For example, looking at levels of utilisation doesn’t address the work allocation processes within the teams and the factors that underpin who gets work and who doesn’t. If we understand the story behind the data, we can use the data to support the overall narrative, rather than just focusing on the numbers. Instead of simply looking at, for example, female representation at partnership and who gets promoted, there needs to be detailed analysis of the talent pipeline and retention at more junior levels.

A specific numerical target does not, in itself, drive broader talent pipeline development – strategic programme initiatives, ownership and accountability do.

None of this is to say that the future is not looking bright. Throughout our report we see examples of innovative practice from the GCs interviewed, who are themselves senior leaders and change agents within their organisations. We were enthused and inspired by the efforts to embed and nurture diversity and inclusive practices, and the high profile of the organisations we spoke to illustrates the strategic advantage conferred by being a thought leader in this space.