Diversity Links

Across several studies, Loran Nordgren, a professor of management and organizations at the Kellogg School, and Kellogg PhD alumnus Brian Lucas,  now of Cornell University, discovered a widespread, persistent, and  mistaken belief that creativity drops off with time. They dub this the  “creative-cliff illusion.”

What’s more, they found, the  illusion is self-defeating. The more people believe in it, the fewer  creative ideas they generate. But with experience comes wisdom, Nordgren  and Lucas learned: people who do lots of creative work do not fall  victim as often to the myth of declining creativity.
Read more here.

Leaders may mean well when they tout the  economic payoffs of hiring more women and people of color, but there is  no research support for the notion that diversifying the workforce  automatically improves a company’s performance. To fully benefit from increased racial and  gender diversity, organizations must adopt a learning orientation and be  willing to change the corporate culture and power structure.

Four actions are key for leaders: building trust and creating a  workplace where people feel free to express themselves; actively  combating bias and systems of oppression; embracing a variety of styles  and voices inside the organization; and using employees’  identity-related knowledge and experiences to learn how best to  accomplish the firm’s core work.

Read more here.

Who gets involved in making the decision? A well-run company has the right people focused on the right risks.  Ideally, the CEO and board of directors should only make decisions at  the extremely high end of a risk continuum, leaving mid- and low-risk  decisions to those further down the corporate ladder. 

Unfortunately,  this does not always happen. Too often, low-risk decisions get  escalated up to the leadership team. This can happen for a couple of  reasons. Sometimes CEOs act like vacuum cleaners, “hoovering” even the  smallest decisions upwards. Other times, though, the problem is that the  people below the CEO are unwilling to be accountable for mid-risk  decisions and push them up to the top.

Read more here.

George M. Anderson, a member of Spencer Stuart’s North American board and CEO practice and David Chun, the founder and CEO of Equilar, studied board turnover and shareholder returns for the S&P 500 companies from 2003 to 2013.

On a rolling three-year basis, they divided firms into four groups  according to director turnover, then calculated annual total shareholder  returns during the subsequent three-year period relative to the  industry average. 

The results: Companies and investors do best with  moderate turnover.

Read more here.

In an excerpt from his new book, Wharton’s Adam Grant explains why  success often comes from surrounding ourselves with “disagreeable”  people – skeptics who can point out blind spots, question assumptions  and help us overcome our weaknesses.

"We learn more from  people who challenge our thought process than those who affirm our  conclusions. Strong leaders engage their critics and make themselves  stronger. Weak leaders silence their critics and make themselves  weaker."
- Adam Grant

Read more here.

Institutional investors and proxy advisory firms continue to develop and refine their policies regarding board diversity. While gender  diversity on public company boards has been in focus for some time now,  institutional investors and proxy advisory firms are also increasingly  focusing on racial and ethnic diversity as part of their evolving  approach to board diversity.

This is a summary of published board diversity policies of  certain institutional investors and proxy advisory firms into a singular  resource for ease of reference. Below the initial breakdown, certain  policies concerning board diversity shareholder proposals are described.

Read more here. 

It depends, says Guoli Chen,  a Professor of Strategy at INSEAD in this insightful interview. He  attributes 15 - 20% of firm outcomes to CEOs. Those who have the  greatest opportunity to actually do things and make changes are more  likely to have an impact.“CEOs and leaders are important, but  maybe not as much as we thought”, people tend to over-attribute  successes or failures of organisations to a single individual: “the  romance of leadership”. Overconfidence and narcissism were two  common personality traits for CEOs, which appeared to provide advantages  (in moderation), such as creating opportunities. Although the benefits  of diverse thinking can certainly be undone by hubristic CEO.
Read more here.

Two professors share research-backed tips for rethinking your recruiting efforts and getting the most out of diversity training.

In many organizations, efforts to be more diverse, equitable, and inclusive are falling short. “I think organizations are sort of reckoning with the [reality that]  feelings or desires are not enough, that there’s more that needs to be  done,” says Ivuoma Onyeador, an assistant professor of management and organizations at Kellogg. “Over  the last few years, several companies have faced allegations of  discrimination and have had to wrestle with how to address these  incidents.”

The stakes for doing better are high—for society, and  for the organizations, which face reputational risks and market risks if  they cannot reach an increasingly diverse base of employees and  customers. 

Thankfully, there are tangible things that leaders can do to promote meaningful change in their organizations.

Read more here.

The topic of diversity in the boardroom has been under increasing  scrutiny over the years as it is seen to be an important factor in  creating a sustainable and successful company. With the question of what  makes a diverse board, there have been a variety of initiatives across  the globe to increase the representation of wider groups of society at  board level for listed companies. While great strides have been made by  many countries in relation to gender diversity, is action being taken to  expand the diversity of boards beyond this first target?

Read more here.

Companies often hire the exact same type of  employee over and over. The thinking is that if employee X is doing a  great job and everyone gets along with them, then the smart thing to do  must be to hire more people exactly like them. This mentality leads to  hiring managers seeking out candidates that identically mirror their  existing workforce. They’ll look for the same educational background and  skillsets, source from the same narrow list of companies, and look for  similar personality traits during interviews. Before you know it, you  end up with an entire staff that looks, thinks, and — to a degree — acts  almost exactly the same. Not only does this tend to result in a  reduction in diversity of thought (among other aspects of diversity),  but it can prevent the company from realizing its true potential. Fresh  new perspectives are necessary to bring forth bold new ideas, challenge  long-standing internal thinking, and provide a more complete internal  representation of the customer base.

Read more here.

The word “diversity” often conjures images of a workplace consisting  of people from different backgrounds, cultures and genders. While those  things certainly explain a component of diversity, it’s only part of  what diversity includes. Realistically speaking, physical and social  aspects only make up about half of diversity. The remainder lies in  diversity of thought.

Not long ago, Denise Young Smith,  Apple’s vice president for diversity and inclusion, received criticism  for making remarks about white men that many considered to be  controversial. She said, ”12 white, blue-eyed, blonde men could be  diverse.” Despite the way she framed her statement, Smith may have been  on to something.

The point she seemed to be making was that you  can have 12 different ethnicities of various ages with an equal number  of males and females, yet you may not be fully maximizing the  opportunities to drive diversity if you are not also considering  diversity of thought.

Read more here.

It’s clear that improving board dynamics is an ongoing challenge facing modern companies. For two years running, PwC’s Annual Corporate Directors Survey has revealed that about half (49%) of directors believe that at least  one fellow director on their board should be replaced. Here, we lay out  how boards can spot the issues that may be holding them back in four key  areas: authority bias, groupthink, status quo bias, and confirmation  bias. Each has clear warning signs. And for each, equally clear  techniques are available to combat the harmful effects.

Read more here.

Auckland University of Technology's Dr Akshaya Kamalnath writes that despite [a broad dictionary definition of diversity], we have had almost a single-minded emphasis on  gender diversity to the exclusion of other forms of diversity, including  racial diversity. Thus, the other types of diversity seem to require a  new justification...certain types of companies may feel they value a particular type of  diversity over others and prioritise it. If we want companies to truly engage with these issues, they should be given the leg room to decide  their priorities and then work towards it. 

Read more here.

The concept of diversity of thought (DoT) continues to grow in  prominence in governance and other group decision-making contexts. This  trend is greatly encouraging. DoT holds the potential to improve both  the composition of boards, by bringing together different perspectives,  and the way that boards address complex challenges and opportunities.

To date, however, three factors have held back the potential usefulness of DoT:

1. The lack of a consistent definition for DoT, making it more difficult to identify whether DoT is present (or absent)
2. Poor dissemination of research findings that provide insight into when DoT is likely to have a positive (or negative) impact on group decision-making
3. The absence of an effective method for evaluating whether decision-making
   groups have sufficient DoT and an ability to apply it – you can only manage what you can measure

Read more here.

Amy C. Edmondson: Imagine a diverse workplace in which all employees felt a genuine sense  of inclusion and belonging.  It’s unlikely you work in such an  organization today. But it’s clear that every organization, public and  private sector alike, is increasingly aware of the need to get to work  on making this a reality.  I’ve spent over 20 years studying workplaces  in healthcare delivery, high tech, the drug industry, consumer products,  and more, where people with diverse skills and backgrounds must work  together effectively to accomplish challenging goals, and one consistent finding from this research is that psychological safety plays a central role in their success.

Psychological safety –  an environment in which people believe that they can speak up candidly  with ideas, questions, concerns, and even mistakes – is vital to  leveraging the benefits of diversity, because it can help make inclusion  a reality.  In brief, psychological safety is about enabling candor.  Inclusion is necessary for mutual learning – and mutual learning is  necessary to progress in a volatile, uncertain, complex, and ambiguous  (VUCA) world.  Extensive academic literature on psychological safety has demonstrated its powerful association with learning and performance in teams and organizations.

Read more here.

Researcher Anita Woolley has studied what makes people work well together, so that teams become more than the sum of their parts.

In the late 2000s, the CIA conducted a research project  with Harvard University called Project Looking Glass, designed to  understand why the intelligence community had failed to foil the  September 11 attacks. The project consisted of a spy-game simulation of a  terrorist attack: a team of scientists was tasked with planning an  attack, and a group of intelligence officers asked to prevent it.

During  the simulations, the “terrorists” consistently beat the “spies”.  Researchers noticed that the experts struggled to collaborate  effectively because they were not making use of individual team members’  different strengths. It was only when they forced them to communicate  properly – instructing members to talk to each other about their areas  of expertise before moving forward – that they managed to be successful.

Read more here.

Andy Wu of Harvard Business School and his doctoral student Sourobh  Ghosh embedded a field experiment in a Google hackathon to investigate  the impact of stand-up meetings—a core component of agile management  practices—on innovation. They found that the teams that engaged in them developed less-novel products. The conclusion: Stand-up meetings inhibit  innovation.

Wu: More and  more companies are adopting agile practices in product development, but  it isn’t always clear why. There seems to be an assumption that agile is  a cure-all for innovation. The study that Sourobh and I did, however,  shows that one key element of the agile approach—regular stand-up  meetings—is great for implementation but actually undermines idea  generation.

Read more here.

When your company is hiring, do people focus on whether a candidate is a good “cultural fit” for the organization?

If the answer is yes, you’re in good company. The vast majority of  managers surveyed worldwide consider cultural fit to be one of the top  priorities in hiring, explains Lauren Rivera, an associate professor of management and organizations at Kellogg. But, she explains, this is generally a bad instinct.

Hiring for cultural fit, when done well, can boost retention and  productivity. But most organizations do it badly, Rivera says. Instead  of looking for people who share the company’s values, hiring managers  look for people who share their own background and interests. And if the  people doing the hiring are predominantly male, or white, or wealthy,  then they perpetuate that lack of diversity in their organization. 

“What you’re going to get is a copy of your existing employees,” she says. “In many instances, it is a form of discrimination.”

Read more here.

Innovation is an increasingly important source of competitive advantage  for companies: Over the last 40 years, organizations have increased  their expenditures on R&D as a percentage of all expenses by 800%.  However, increased R&D budgets alone do not always lead to real  innovation. The types of researchers a company hires plays an important  role in whether it will succeed in leaping ahead of competition. But  what types of researchers are most valuable?

Read more here.

Diverse boards and management teams have been shown to drive  innovation through diversity of thought, skills and perspective. 

Because private equity firms are accountable for driving long-term  returns for their limited partners, and the right executive team can  mean the difference of tens to hundreds of millions of value creation,  there is little room for error in hiring. How should private equity firms solve the  "pipeline" issue and look to find and attract strong diverse candidates  in the near term? The key to finding and hiring high-caliber leaders is  to expand networks and examine which qualifications will really drive  success for the hiring company and its private equity backer.

Read more here.

While in many cases unconscious bias awareness training may result in  insightful discussions, behaviour change may not occur or may only be  short term. Additionally with some people, awareness raising may  actually unintentionally encourage more biased thinking and behaviours.  Also, by hearing that others are biased and it’s ‘natural’ to hold  stereotypes, some people may feel less motivated to change their biases.

Moving beyond awareness of unconscious bias and implicit associations to long term bias reversal and inclusive behaviours requires changes in  organisational practices plus practical interventions to address  personal biases and creation of new positive behaviours and pro-active  approaches to working with people who are ‘different’ from the majority  group.

Read more here.

Is that money actually creating meaningful change? In recent years, some social scientists have argued that it isn’t. And studies show little conclusive evidence that diversity trainings shift attitudes and behaviors in a lasting way.

But  in a new paper, Ivuoma Onyeador, an assistant professor of management  and organizations at the Kellogg School, argues that we shouldn’t give  up so quickly. She and her coauthors—Evelyn R. Carter of Paradigm  Strategy Inc. and Neil A. Lewis Jr. of Cornell University—reviewed the  existing research on diversity trainings and used that data to make  evidence-based recommendations on how to improve them.

Read more here.

The human mind is inherently interdependent with its ecological, social,  political, and cultural environment. Therefore, any understanding of  the mind is necessarily incomplete if it fails to consider this  interdependence. By hiding the mind’s interdependence with its  environment, a mind = computer metaphor may obscure why psychological science  requires diversity in both study participants and the scholars who test them. Inclusion and diversity are required for reasons of social  justice and fairness...however, that yet another strong case for them can be made.

Read more here.

Katie Canell, Deloitte UK’s managing director for  audit innovation: Audit needs to evolve to adapt to the modern business world and the  changing needs of its stakeholders. To do this, all parts of the  business community need to work together – policymakers, investors,  company directors and auditors. You need diversity of thought if you’re  going to take a truly holistic look at audit and how it can adapt to  modern business and governance needs. That diversity of thought needs to  exist within audit firms as well as across the business community. “From our newest recruits at associate level, right the way up to  partnership, we have a huge opportunity to draw on different  perspectives and challenge different mindsets,” says Canell. “Diversity  of thought is so important; those new to the profession bring a valuable  fresh perspective and insight.” 

Read more here.

In this dynamic world where competition, management of risk and  technology are in a constant state of change and flux, boardroom  leadership is also evolving rapidly to keep pace.

First becoming a director at just 32 years of age, today Abby Foote is one of a new breed of directors rising to the challenge and leading a new  governance style that recognises the changing demands of the role of  directors in an increasingly volatile, uncertain, complex and ambiguous  world.

Read more here.

Disagreements are an inevitable, normal, and healthy part of relating to  other people. There is no such thing as a conflict-free work  environment. You might dream of working in a peaceful utopia, but it  wouldn’t be good for your company, your work, or you. In fact,  disagreements — when managed well — have lots of positive outcomes. Amy Gallo outlines the benefits.

Read more here.

Received wisdom is that the more diverse the teams in terms of age,  ethnicity, and gender, the more creative and productive they are likely  to be. However, Alison Reynolds and Davis Lewis have found no correlation between  this type of diversity and performance with a strategic execution exercise, which required executive groups to manage new, uncertain, and complex  situations. 

Read more here. 

50 percent of meeting agendas are recycled from other gatherings.  Perhaps not surprisingly, 70 percent of senior managers consider  meetings unproductive.

In the U.S. alone,  55 million meetings are held a day. Most of them are  woefully unproductive, and tyrannize our offices. The revolution begins  now — with better agendas, smaller invite lists, and an embrace of  healthy conflict.

Read or listen to more here. 

In a PwC survey, 62% of directors strongly agree that diversity brings unique perspectives to the boardroom. 52% strongly agree that gender diversity is very important in achieving diversity of thought. But 72% of male directors say too much attention is paid to gender  diversity, while only 25% of female directors agree. 76% of the men surveyed said they believe boards will naturally become more  diverse over time; only 33% of women said the same.

Read more here.

It’s important to celebrate your accomplishments. But as Leigh Thompson a Professor at Kellogg School of Management at Northwestern University, watched executives engaging in a “brag session” at a corporate retreat,  she began to wonder if feeling proud could also inhibit creativity.  “Because if you are engaging in a brag session or being prideful, you are unwittingly encouraging people to self-censor their own ideas,” says  Thompson.

Listen to the podcast here.

The  design-thinking approach loosely follows a four-step process that  involves observing a problem, reframing it, designing solutions, and  testing them—all with the end goal of improving how humans experience a  product or service.

Rather  than blindly following the approach, it can be helpful to  understand the psychology behind it. And critically, social psychology  also offers insight into specific ways to get more out of each step in  the process.

So  why does design thinking work? And how can businesses effectively apply  these principles themselves? Thompson and Schonthal explain. 

Read more here.

It is perhaps tangential to the dominant diversity debate, yet the  Financial Reporting Council (FRC) notes: "The boardroom should be a  place for robust debate where challenge, support, diversity of thought  and teamwork are essential features.

"Diversity of skills, background and personal strengths is an important driver of a board's effectiveness, creating different perspectives among directors, and breaking down a tendency towards' group think'."

"Factors known to distort judgement are conflicts of interest,  emotional attachments, unconscious bias and inappropriate reliance on  previous experience and decisions."

Read more here.

A very strong theme from the interviews was

that to be successful, boards must have diversity of thinking, skills and experience. This is not about quotas, but about having a broad range of expertise, experience, perspectives and mindsets, to avoid getting stuck in a particular way of thinking. However, boards often recruit who they know, so end up with more people like themselves. Read more here.

Based on behavioral  and decision science research and years of application experience, Torben Emmerling and Duncan Rooders of Affective Advisory outline the right processes to allow groups to make better decisions together. Read more here.

In times of crisis, diversity of thought is critical—but a minority at  the table often dominate discussion. Advice from an introvert on  amplifying the voices and perspectives of those least likely to offer  them. Read more here.

Ed Salas: Several myths show up with troubling  frequency. The first is viewing teamwork as a distraction from real  work. That may be true if you equate teamwork with hosting company  get-togethers and birthday parties. But the research is really clear.  Teamwork is about how work gets done, and teams that do it better  outperform others by 20% or more.

A second myth is that if team members like each other and maintain  harmony, the team will be successful. Of course, we prefer working with  people we like, but liking or hanging out together doesn’t ensure great  teamwork. In fact, a little discord may be helpful at times, if team  members feel comfortable speaking up and can disagree constructively.

Read more here.

The analysis of the top 100 Singapore listed companies illustrates a  strong relationship between board diversity and company performance. In a diverse society, a diverse board can provide multiple perspectives,  helping increased social acceptability and, in turn, ensure that the  board conducts itself appropriately. It is critical for boards to ensure  they have diversity of experience, background and thought. 

Read more here.

According to Hays’ Staff Engagement: Ideas for action report, which is based on a survey of 1,196 employers and employees,  93% of employees want a ‘voice’ and the ability to share their opinions  at work and the same percentage want to work in an inclusive culture  where differences are valued.

Read more here.

Kathy Caprino interviews Any Edmondson – the Novartis Professor of Leadership and Management at the Harvard Business School, to learn more about how an organization can move away from promoting a culture of fear, to one of psychological safety.

Read more here. 

In today’s world, it’s hard to imagine a more important skill for CEOs than the ability to create and develop high performing teams in their organizations.

According to Google’s work on teams and research from The Power of Peers (2016) on groups, neither high performing teams nor groups were  necessarily comprised of the most talented individual members. The best  teams/groups were those whose members collaborated most effectively. Read more here.

Dr Akshaya Kamalnath outlines how more women on boards can important indicator of gender equality and board effectiveness but gender is only one facet of diversity.

In the longer run, investors, employees, customers and wider society can all benefit from companies taking a broader approach to board diversity that aims to get multiple viewpoints into corporate decision-making.

Read more here.

Dr Darleen DeRosa outlines how modern board governance is a far more  proactive undertaking, and many organizations are taking steps to change  the composition of their boards to encourage a greater diversity of  thought and promote the agile leadership qualities necessary to compete  in a business environment beset by disruption. 

Read more here

There is ample research to show that diversity, when harnessed properly,  can improve corporate performance. In cases of CEO succession, a board  with diversity of thought, backgrounds, and traits benefits the  organization by staving off groupthink and increasing the breadth of  perspectives. Constructing a quality board is about the caliber and perspective of  individual directors as well as the deliberate rules of engagement that  allow for productive debate and effective decision making. 

Read more here.

Ziena Jalil, former New Zealand Trade Commissioner to Singapore and  consulting partner at SenateSHJ, says organisations that embrace  diversity and inclusion outperform their peers in profitability and  productivity. Jalil said diversity was not just about ethnicity, it is also about  gender, race, sexual orientation, physical ability, age, socio-economic  background and beliefs, which organisations need to represent. Read more here.

An aspect of diversity that is getting greater attention is “diversity of thought”. This is the concept that people who have had different experiences, hold different beliefs or use contrasting ways of addressing problems, will think differently to each other. Diverse thinking allows people to frame problems in different ways, generate different potential solutions, and even creatively build on others’ ideas. It holds great promise if used in the right settings.

Read more here (on page 5).

Recently published in an HBR article,  a study by Catherine Tinsley and Kate Purmal found that prior to  becoming a US public company CEO, women were significantly more likely  than men to have served on a corporate board. More than half of the  female CEOs (59%) served on a public company board, as compared with 42%  of the men. Almost twice as many women (23%) as men (12%) served on a  private company board.

Might this be applicable to CEOs and other C-Suite Executives in NZ?

Read more here.

Black and white thinking may die hard, yet never has society been  quite as comfortable with the concept of the spectrum than the present.

According to researchers at Merriam-Webster, use of the word  “spectrum”, in a wide range of contexts, has grown dramatically within  the current decade. Coined by Isaac Newton in 1672 to describe  refractions of light, today referencing a “spectrum” is almost always  shorthand for acknowledging a metaphorical range of nuances.

Read more here.

Bart de Langhe and Philip Fernbach outline the risks of relying too much on categorical thinking:

• Compression - disregarding variation within a category
• Amplification - exaggerating differences across category boundaries
• Discrimination - excessive focus on some categories at the expense of others
• Fossilization -  difficulty escaping entrenched ideas

Read more here.