You can debate Trickle-down economics, but I think we can agree that an organization’s vision, values, and culture all begin at the top of the company. It starts with the CEO, the executive leadership team, and the board of directors. What is important to us? What is our purpose? What makes us valuable to our customers?
If that’s true, (spoiler alert: it is) then take a thoughtful look around the table at your next executive committee meeting. What, and who, do you see? Is it a group of people who look alike – went to the same schools, earned their chops at the same group of Fortune 500 companies, and belong to the same social circles?
Although change is finally rippling through corporate America, the fact is that the executive suite still lacks diversity. Fewer than 10% of Fortune 500 CEOs are female or nonwhite. And the rest of the room is strikingly similar.
It’s easy to fall into either an apologist mindset (“Progress takes time! Look at how far we’ve come in the past year!”) or go on a revolutionary tirade (“It’s the morally right thing to do!” Tear the place down!) but the reality is that increasing diversity in your leadership team is the profitable thing to do. And you can, and should, do it now.
Research proves that executive teams with more diversity outperform industry standards by 33%. Deloitte, Harvard Business Review, McKinsey, Boston Consulting Group, and more all show the same thing. (Drop me a note if you’d like to see the research for yourself.)
As a member of the C-suite, board of directors, or other leadership role in a public company, you have a fiduciary responsibility to maximize the returns to your shareholders. If you are in a privately-held company, it’s a responsibility to your stakeholders and to your own bank account. This one simple change can have an outsize impact, according to study after study.
So how do you achieve this goal? Tell HR to go hire a person of color and consider the job done?
Nope. To come back to the beginning of this article, it starts at the top. You can’t delegate responsibility. You have to live it. Actively seek to fill senor roles and board seats with a more diverse slate of candidates, yes, but that’s only a start.
The profitability increases come when you engage a room of people with diverse backgrounds to tackle the challenges facing your business. Problem solvers with a wider background of experience will bring more innovative solutions. And innovation drives profitability. But you can’t just hire a token person and expect magic to happen, you have to actively engage with them. Give them permission to offer an opposing point of view. And encourage the rest of the team in the room to take the ideas seriously. C-suite politics are treacherous grounds without cover from the very top.
As I said, it starts at the top.
Until we meet again.
CEO, Focus & Find