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The renewed attention on diversity, equity and inclusion (DEI) in the workplace has been enough to fill any manager’s agenda this year.
But this is 2020. The coronavirus pandemic has heaped even more pressure on leaders tasked with keeping their employees healthy and safe, while also trying to keep DEI at the top of a growing list of priorities.
“Both of them are exhausting, and we only have so much in our reserves to be able to continue down this path,” Wharton Dean Erika James said.
The collective energy around racial and social justice that was sparked earlier this year by the deaths of George Floyd and Breonna Taylor, two Black citizens killed by police, has slowed in the last few months amid competing worries and fatigue. But James hopes it will return stronger once the virus is under control.
“Right now, I think it’s really hard to conjure up the fortitude that’s required around something as hard as race and racial justice while [we are] also dealing with all of the impacts associated with the pandemic,” she said.
James spoke during a livestream of Leading Diversity@Wharton, an ongoing speaker series hosted by Wharton management professor Stephanie Creary, who is a diversity and identity scholar. Corey Anthony, senior vice president of human resources and chief diversity officer at AT&T, also joined the conversation, titled “Inclusive Leadership in a Time of Crisis.” (Listen to the podcast at the top of this page, or watch a video of the discussion below.)
Anthony called out the difference between a moment and a movement. The killings and worldwide protests that followed were incredibly emotional, but emotions subside, he said. Real change comes when organizations commit to building the structures and processes that “operationalize” all those good intentions.
“What’s your sacrifice? That’s the difference between something being a moment versus a movement,” Anthony said. “If you cannot identify as an organization — if you cannot identify as an individual — the sacrifices you have made, then you’re likely to be in a moment, and it’s probably not going to be a movement.”
A Matter of Trust
James, who previously served as dean of Emory University’s Goizueta School of Business, arrived at Wharton in July, after the campus had gone virtual. She was two months into the job before she could tour the campus, and she’s still only met a handful of colleagues in person.
Inclusive leaders must build trust in an organization and value those who have shown trustworthy behavior, James pointed out. But how do you establish those personal relationships when the COVID-19 crisis has moved everything online?
She relied on “swift trust,” which she defines as suspending doubt about the dependability or capability of people you do not know.
Asking a lot of questions and giving feedback can help guide people, but trust is still required. James laid out three components of trust:
- Competence — Can you be trusted to do the job you were hired to do?
- Communication — Can you be trusted to be candid, transparent and discreet?
- Contractual — Can you be trusted to follow through so that people can rely on you?
Anthony agreed that trust in others is part of inclusive leadership, but so is trust in oneself. “Because when you don’t have that, your team will see it,” he said.
Calling himself a Socratic learner, Anthony also noted that inclusive leaders should ask a lot of questions. “It’s a good way for you to get to a place where you are using your personal power, as opposed to your positional power,” he said. “When you ask those questions, it’s a way of pulling the team in, a way of engaging the team.”
The pandemic accelerated the innovation that was already underway at AT&T, Anthony said, and Floyd’s death accelerated the company’s approach to diversity. For the first time in its history, the company made transparent its demographic makeup, from the C-suite to front-line employees. Executives went on a listening tour and also shared their action plan for addressing DEI.
“What’s your sacrifice? That’s the difference between something being a moment versus a movement.” –Corey Anthony
“We want to help everyone understand in this company that we cannot be successful as a business without having a diverse workforce and an inclusive work environment. It has to be a business imperative,” he said.
Creary asked the leaders whether they used a carrot or stick approach to keep others accountable on DEI. Anthony pushed back on the idea, saying he tries to avoid binary thinking. His company has made DEI a part of performance evaluations, so employees are both incentivized to do better and penalized if they don’t. Expectations around DEI are “non-negotiable,” especially for leaders.
“I don’t think of it as a carrot or a stick. I think of it as a carrot I sometimes use as a stick,” he said.
James said she arrived at Wharton to find many professors were already taking the initiative by creating or modifying classes to talk about race. She thinks carrots work best by providing a safe space for the efforts to continue and flourish. “There are ways that we can reward and incentivize our faculty to do more of the work that I am seeing,” she said.
Change Agents
Creary said she’s inspired by her students because they want to talk about the hard topics of diversity, equity and inclusion. They want to help dismantle structural racism and create a more equitable world.
“They are very, very, very eager to be change agents in their internships and their future work roles,” Creary said.
She asked James and Anthony to offer advice to the next generation of business leaders. James encouraged students to choose employers wisely.
“It will be a much easier road if, in fact, you choose companies that are already aligned with the values that you have,” she said. “Choosing where you provide your professional gifts is as important as anything.”
A rookie employee won’t have the power to move mountains alone and will quickly become frustrated. But joining an organization with a demonstrated commitment to diversity allows that rookie to become part of the “critical mass” toward DEI, she said.
“You fill the reserve and you start over. While we have the world’s attention, it’s incumbent upon us.” –Erika James
Anthony cautioned students to avoid becoming the very thing they are fighting against, which is intolerance. It’s a paradox that happens when people insulate themselves and block out others whose beliefs are radically different from their own.
“Step outside of your echo chamber,” he warned students. “Quit consuming information and perspectives from sources that already think, feel and believe how you think, feel and believe. That is toxic.”
Anthony said leaders must have empathy for everyone, even people they disagree with, if they want to be truly inclusive. “You cannot lead effectively in any organization or capacity if you don’t have empathy,” he said. “And you cannot develop the right empathy if you are in an echo chamber.”
He had to follow his own advice in dealing with the aftermath of Floyd’s death. He was initially frustrated by the reactions of people who genuinely didn’t understand the burdens carried by Black Americans. Then he realized that everyone is not in the same place along the learning curve about racial justice. He decided: “We’re going to embrace the fact that everybody is paying attention, and we’re going to use this opportunity to learn from it.”
Anthony leveraged his position as CDO, engaging hundreds of employees in video conversation at once, instead of individually. He also urged people to educate themselves on the issues first, before asking him for the shorthand.
James recalled feeling a similar frustration. But the lifelong educator realized Floyd’s death created a unique, teachable moment to crack open uncomfortable conversations with as many people as possible.
“You fill the reserve and you start over,” James said. “While we have the world’s attention, it’s incumbent upon us.”
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Anumakonda Jagadeesh
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Inclusive Leadership
Inclusive leadership is a set of behaviors demonstrated by organizational leaders that leverage diversity of thought and experience to positively impact business results. Leaders who wish to employ inclusive leadership value the variation of talents, experiences, and identities of their employees. When employees feel unique and feel a sense of belonging based on shared attributes and goals, organizations increase the chances of reaping the business benefits of a diverse workforce.
Research indicates that inclusive companies increased cash flow per employee by 230% over a 3 year period due to employees’ greater focus on team work and business impact, resulting in improved higher performance as measured by business, financial, and talent outcomes. When effective inclusive leadership is present in a company culture, employees are significantly more engaged, able to work as a team, and capable of better solutions for navigating business priorities. These outcomes cultivate an environment where employees can openly contribute their objections, maintain a sense of belonging, and believe their opinions are valued in the workplace, creating conditions for new insights to emerge and diverse perspectives to be heard, and ultimately benefit the bottom line.
Several studies have identified characteristics of inclusive leaders:
Deloitte has identified 6 personality traits that characterize an inclusive mindset:
1. Commitment: Leaders committed to diversity and inclusion because the objectives align with their personal values and belief in the business case, a combination of emotion and intellect, respectively.
2. Courage: Challenging the status quo or going against the norm, invites vulnerability of a leader who is practicing courage, another extensions of a highly inclusive leader. Feedback is also a component of courage, and should be sought and given on a regular basis.
3. Cognizance of bias: Inclusive leaders are self aware and aware of their environment and how it affects themselves and others. Subtle biases of stereotyping, confirmation, and groupthink can narrow a leader’s vision and reduce objective decision-making.
4. Curiosity: Employ an open mindset, and have a desire to understand how others experience the world. They are also tolerant of ambiguity.
5. Cultural intelligence: Inclusive leaders experience effective, authentic cross–cultural interactions. The ability to communicate well across cultural settings is dependent on one’s understanding of cultural differences and similarities.
6. Collaboration: The process of working together to build on one another’s ideas to produce something new or solve complex problems. The challenge of collaboration is accounting for diverse groups to foster sharing of perspective and thinking, which is critical to effective collaboration.
Catalyst identified 4 leadership behaviors linked to inclusion:
1. Empowering: Enabling direct reports to excel
2. Humble: Admitting mistakes, learning from criticism and different points of view. Acknowledging and seeking outside opinions to effectively overcome one’s limitations. Humility was found to be among the most significant indicators of an inclusive leader.
3. Courageous: Leaders putting their personal interests aside to achieve what needs to be done. Acting on convictions and principles even when it involves personal risk.
4. Accountable: Demonstrating confidence in direct reports by holding them responsible for performance they can control.
Lead Inclusively, Inc. identifies the three R’s of inclusive leadership:
1. Receptive: Curious about the viewpoints of others and welcoming of team member differences. When leaders are more receptive, teams are more engaged and increase ideation toward critical business changes.
2. Reflective: Aware of personal biases that may impact their decisions and interactions. Listening for silence, specifically from quieter employees and considering ways to benefit from increased talent retention and diversity of the talent pipeline.
3. Revitalizing: Keeping decision-making honest and transparent, empowering employee ideas whenever possible, and providing recognition to all team members, especially those who demonstrate learning agility and creative ideation. All of these traits inspire teams to innovate, achieve, and contribute at every level of the organization.
Inclusive Leadership and Innovation
In a study conducted by Boston Consulting Group, researchers found that there is a positive relationship between management diversity and innovation, which they define as revenue from new products and services. The relationship between diversity and innovation is not one to one, instead these factors affect each other in complex ways, including creativity of the Research and Development department, the executives team’s attitude toward risk-taking, and the support that new ventures have among shareholders. The more diversity that is included within those environments and others, the more innovation can occur.
Furthermore, Catalyst research found that when employees feel included they are more likely to innovate, identify opportunities for new products and processes, and try out new ideas and approaches to problems. Specifically, an employee perception of inclusion contributed to more than 40 percent of innovation. This suggests that employing inclusive behaviors has a great impact on innovation within the workforce.
It is important to note that there are various types of diversity that affect innovation. Research by Hermann found that diversity of thought is an emerging focus shaping the conversation surrounding diversity and inclusion, specifically in terms of innovation. Diversity is not the cause of organizational innovation; rather, the extent to which diverse people feel included has the capacity to increase organizational innovation.
Increased innovation is possible when employees at all levels of the organization feel included. Employees that have a sense of belonging and yet set themselves apart from the group as unique individuals are more inclined to take risks and suggest new processes and systems within their working environment. Harvard Business Review reported that employees with inclusive managers are 1.3 times more likely to feel that their innovative potential is unlocked. An environment of diverse informed views, fueled by inclusive leadership behaviors, enables more efficient objections and alternatives to come forth and more innovative solutions to emerge.
Inclusive Leadership and Employee Engagement
Employee engagement is the the extent to which employees are emotionally and psychologically attached to their work and workplace (Gallup). It is an issue that affects companies globally and is a priority for Human Resources. It is linked to to higher levels of individual productivity, increased employee retention and satisfaction, and improved business outcomes. Studies suggest that there is a significant relationship between inclusive leadership behaviors and employee engagement. However, in the U.S. only 33 percent of employees are engaged at their jobs, and 51 percent of employees are actively looking for new jobs. One reason employees do not feel engaged in the workplace is a result of organizations implementing diversity programs without relying on inclusion to create engaged teams. Employing diversity practices alone will become increasingly problematic as the values of diversity and inclusion continue to change due to the influence of millennials entering the workforce.
Millennials, who will comprise nearly 75 percent of the workforce by 2025, define inclusion as “support for a collaborative environment that values open participation from individuals with different ideas and perspectives.” This definition is much different from prior generations’ view of inclusion from a perspective of representation and assimilation. As a result of feelings of empowerment and being true to themselves, millennials report higher levels of engagement when operating in an inclusive culture. Leaders of today and the future will have to employ inclusive leadership as a strategy to retain and attract talent in the new millennial-driven workforce.
Inclusive Leadership and Global Trends
As global shifts affect how organizations do business, it has become increasingly critical for leaders to effectively manage organizational diversity. Understanding and being adept at inclusive leadership will help leaders thrive through increased diversification of their talent pool, customer profile, and supply chain. For example, when leaders are not inclusive, it results in lower revenue, performance, and slower decision making, negatively impacts employee morale and well being and consequently positions organizations to fall behind in global market. Recognition that global trends affect the relationship between diversity and performance will continue becoming more pronounced. While diversity positively impacts key aspects of organizational performance, inclusive leadership provides the support a diverse employee environment needs to effectively approach challenges resulting from global trends.
Deloitte identified 4 global diversity trends that influence organizational business priorities:
• Diversity of Markets: Markets are diversifying on a global scale across cultural, political, and economic segments. These specific markets are characterized by ethnic population growth and increased income levels that present growth opportunities for companies around the world. Because market diversity presents a major growth opportunity, it is important to reach consumers authentically to profit. Leaders who demonstrate inclusive leadership behaviors and adapt a global mindset will be more successful than those that do not.
• Diversity of Customers: Customers are the center of all business. They are technology driven, hyper-personalized, and demand to have a voice in the products they consume. The complex challenge for businesses is personalizing and delivering individualized insights while simultaneously scaling the product. Adapting to better understand the customer is imperative to successful business outcomes.
• Diversity of Ideas: Innovation is at the forefront of business priorities and requires a wide set of ideas from individuals and organizations to achieve business goals. Digital disruption has created a new space for emerging thinkers who are now competition for organizations. Thought diversity is important in order to avoid groupthink and continue generating a range of ideas. Leaders’ understandings of how thought diversity works and ability to effectively manage the diversity is critical to success.
• Diversity of Talent: Changes in the population in areas of age, education levels and migration flows, among others, should be reflected in an organization’s ability to better respond to societal shifts. The increase in diversity of views and attitudes toward work based on generational diversity are shaping organizational cultures, as new views emerge with younger generations entering the workforce. Organizations are challenged with maintaining a diverse talent pool to meet and mirror demographic diversity.
Inclusive Leadership and Diversity
Few organizations distinguish between diversity and inclusion. Many lump the terms together and participate in hiring practices to achieve diversity metrics, but few take the time to cultivate the environment needed for diversity to reach its highest potential. Boston Consulting Group identified participative leadership behaviors as the number one environmental factor that amplifies the impact of diversity in a workforce or team. Inclusive leadership is the bridge that connects diversity and inclusion. When Verna Myers says, “Diversity is being invited to the party, and inclusion is being asked to dance”, essentially the “ask” is the application of inclusive leadership within a diverse workforce. Employing inclusive leadership clearly connects diversity and inclusion by acknowledging it as the driver of the results diverse work environments can yield.
Diversity is representation in the workforce; however, without inclusion, the continued attraction and retention of diverse talent, fostering of innovation, and resulting business outcomes won’t happen. Organizations with diverse and inclusive cultures are 45 percent more likely to improve their market share. Inclusive teams out-perform their peers by 80 percent in team-based assessments. Diverse organizations do not perform well because they have a presence of people who are diverse in gender, ethnicity, generation, and other types of diversity including experiences, perspectives and opinions; it is to the extent to which organizations include employees in key decision-making activities and how they value their contribution that encourages an inclusive environment.
The meaning of diversity and inclusion in practice is changing as more is discovered about their impact on business outcomes. Millennials, who will comprise nearly 75 percent of the workforce by 2025 define inclusion as a collaborative environment that values open participation from individuals with different ideas and perspectives, whereas prior generations, view inclusion as representations and assimilation of diverse peoples in the workforce. For example, 32 percent of millennials are more likely to focus on respecting identities, where as 21 percent of non-millennials are more likely to focus on representation. The dichotomy between millennials and non-millennials’ views of diversity is clear, and employing inclusive leadership to better navigate these perspective shifts can improve business outcomes.
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Dr.A.Jagadeesh Nellore(AP),India