Empower the workforce of the future byÂ proactively building a diverse leadership pipeline.
By Marta Chmielowicz
In todayâs competitive and fast-moving business world,Â innovation is keyâand thereâs no shortage of advice aboutÂ how companies can innovate. From adopting AI-enabledÂ technologies to embracing an agile mindset, HR leadersÂ are working hard to stay ahead. But thereâs anotherÂ proven driver of progress and change that organizationsÂ can add to their list of strategies: building a diverseÂ leadership team.
According to a recent study by BCG, increasing theÂ diversity of company leadership is correlated with betterÂ financial performance and greater innovation. In fact,Â results suggest that companies with above-averageÂ diversity scores reported 19 percent higher innovationÂ revenue than their competitors with below-averageÂ diversity scores (45 percent versus 26 percent, respectively).
Furthermore, McKinseyâs Delivering Through DiversityÂ report indicates that companies in the top quartile forÂ ethnic diversity at the executive level are 33 percent moreÂ likely to have above-average profitability than companiesÂ in the bottom quartile, and those in the top quartile forÂ gender diversity are 21 percent more likely to have betterÂ profitability than their less diverse counterparts.
âSimply put, diverse teams achieve stronger results,â saysÂ Molly Brennan, founding partner of Koya LeadershipÂ Partners. âResearch shows that diverse teams are moreÂ creative, come up with better solutions, and haveÂ stronger financial performance. Diversity also plays aÂ critical role in employee engagement and organizationalÂ culture, particularly when it comes to recruiting the nextÂ generation of leaders.â
But in spite of these benefits, research reports littleÂ progress in advancing diversity on executive leadershipÂ teams. In early 2019, only 24 Fortune 500 CEOs wereÂ women and only three were African American.
To help combat this, AndrÃ©s Tapia, senior client partnerÂ and global diversity and inclusion (D&I) strategist at KornÂ Ferry, suggests that organizations dedicate 80 percent ofÂ their energy to building a sustainable, diverse leadershipÂ pipeline.
âDemonstrate in the organization a sense of why diversityÂ is important and role model it in terms of declaring itsÂ value,â he says. âDonât only bring in diverse talent fromÂ a recruiting perspective at all levels, but make sure thatÂ talent feels valued, that the talent is being seen for whatÂ it has to offer, and that your high potential and otherÂ talent management processes are equitable and free ofÂ unconscious bias so you can truly have diverse slates ofÂ internal candidates for the next promotion.â
Overcoming Obstacles to Diversity
There are a number of internal and external obstaclesÂ that need to be overcome in order for HR leaders to buildÂ a diverse leadership pipeline and an inclusive workplaceÂ culture.
TD Bank has taken many steps to become an organizationÂ that leverages diversity and inclusion to secure a strategicÂ advantage. âOur commitment to inclusion is groundedÂ in a belief that our future success depends on the qualityÂ and engagement of our colleagues to achieve our sharedÂ purpose,â says Girish Ganesan, head of talent at TD Bank.Â âTo build our capacity for innovation and drive results, weÂ need to engage all backgrounds, skillsets, and mindsetsÂ to create value in a unique and inclusive environment.Â Diverse leadership is key to cultivating a barrier-freeÂ culture that attracts, invests in, and promotes all talent.â
The company has implemented various strategies toÂ overcome two barriers to success for diverse employees.
Obstacle #1: Unconscious bias.
Unconscious biases are social stereotypes about certainÂ groups of people that individuals form outside ofÂ their own conscious awareness. While natural, theseÂ judgments are often inaccurate and can lead to unfairÂ characterizations. This can often have unintendedÂ consequences in the workplace, Brennan says, puttingÂ minorities at a disadvantage when seeking outÂ opportunities. In fact, according to BCGâs diversity report,Â half of all minority employees stated that they see bias asÂ part of their day-to-day experience at work.
âIf you look at succession planning or high potentialÂ identification or hiring criteria, the interpretations of whatÂ required competencies and behaviors should look likeÂ could inadvertently be influenced by bias,â agrees Tapia.
Solution: Create an actionable plan that addresses built-inÂ structural inequity.
With BCG reporting that half of diverse employees sayÂ they donât believe that their companies have the rightÂ mechanisms in place to ensure that major employmentÂ decisions are free from bias, it is up to HR professionalsÂ to identify and eliminate points of bias in their talentÂ management processes by implementing two bestÂ practices:
- Offer unconscious bias training. According to AudraÂ Jenkins, chief diversity and inclusion officer at RandstadÂ North America, organizations should combat the influenceÂ of unconscious bias on hiring decisions by offering trainingÂ about the impact of bias, ways to recognize biasedÂ behaviors, and best practices to reduce the influence ofÂ stereotypes on decision-making.
This is a strategy that TD Bank leverages for its entireÂ management team across the organization. âIn 2018, weÂ launched a new unconscious bias training program for allÂ people managers in our organization,â says Ganesan. âThisÂ full day, in-person training engages participants in talkingÂ about bias that they may have personally experienced orÂ have perpetuated on others. Participants learn ways toÂ identify and dispel their personal biases.â
- Create a structured talent planning process. CompaniesÂ like TD Bank will benefit from a formalized, systematicÂ approach to hiring, succession planning, and developmentÂ in order to reduce bias.
âTD Bank has multiple programs ensuring the deliberateÂ development of pipeline talent through integratedÂ approaches focused on applying high investmentÂ development tactics to address individual developmentÂ needs and key organizational capability gaps criticalÂ at each level,â says Ganesan. The organization closelyÂ monitors its future talent needs and the representationÂ of its existing talent pipeline, working actively to identifyÂ diverse candidates for upcoming opportunities andÂ increase their visibility to company leaders.
Brennan recommends that HR leaders keep a close eyeÂ on recruitment and promotion processes throughout theÂ organization, evaluating trends, patterns, and employeeÂ experience data to glean insights and develop specificÂ interventions. Begin by conducting a survey or audit of theÂ organization to get a comprehensive understanding of theÂ current state of D&I as well as employee perspectives.
This data can help drive results. Tapia says to start with aÂ quantitative analysis, looking at talent flow, promotionÂ rates, attrition, and stagnation across groups. QualitativeÂ tools like focus groups, executive interviews, and HRÂ process reviews can supplement the hard data andÂ get a better understanding of inequities in successionÂ management and high potential identification. TheÂ synthesis of this information will identify problems thatÂ can be targeted using specific programs and interventions.
- Hold leaders accountable. Once HR leaders have aÂ specific plan in hand to improve diversity in the leadershipÂ pipeline, itâs critical to get the C-suite on board.Â âTo ensure that its diversity and inclusion program isÂ effective, TD Bank embeds it into the decision-makingÂ process for senior leaders who are held accountable in aÂ way that is measurable. Receiving buy-in from the C-suiteÂ is a key component for organizational change. TD BankÂ has an engaged and motivated leadership team that setsÂ the right tone from the top through commitment andÂ measurable action,â says Ganesan.
And this doesnât just apply to the executive team. JenkinsÂ suggests that HR professionals give managers throughoutÂ the company clear guidelines in order to promote inclusionÂ within their teams. This may include observing howÂ different teams interact with one another or fosteringÂ diversity discussions that give employees the opportunityÂ to express concerns and develop ideas.
Obstacle #2: Insufficient representation.
A diverse leadership pipeline canât be achieved without aÂ sense of belonging in the organization. But when differentÂ groups are not represented on the leadership team,Â Jenkins says employees may feel dissuaded from advancingÂ to these positions in the future.
âWork environments that are not inclusive can beÂ challenging places to work,â says Brennan. âBeing âtheÂ onlyâ person of color on a team or department can createÂ a significant mental toll that can make it more challengingÂ to strategically advance a career.â
Solution: Provide mentorship and community.
The answer? Mentorship and employee resource groupsÂ (ERGs) can be valuable tools for diverse employees strivingÂ to grow their careers.
TD Bank offers both of these resources to its employees,Â supporting an active network of more than 50 ERGs thatÂ deliver employee engagement, career development,Â mentoring, and networking opportunities. In fact,Â Ganesan says that the companyâs regional diversityÂ councils each have their own âMinorities in LeadershipâÂ resource groups that organize lunches and networkingÂ opportunities for members to engage with senior leaders.Â The organization also works closely with various businessÂ resource groups that advocate for minorities, women,Â people with disabilities, members of the LGBTQ2+Â community, and veterans.
Mentorship is another essential part of TD Bankâs D&IÂ strategy. âWe leverage mentoring programs such as âEachÂ One Teach Oneâ, which is a three-tier mentoring programÂ that engages emerging talent, senior talent, and executiveÂ talent,â explains Ganesan. âThe program is designed in aÂ one hand up, one hand down approach with the emergingÂ talent being mentored by a senior manager who isÂ mentored by an executive mentor. The senior-level mentorÂ is both a mentor to an emerging leader and mentee to aÂ senior leader.â
Providing Support Through the Entire Employee Lifecycle
While lack of representation and ingrained structuralÂ biases are major headwinds that prevent diverseÂ employees from advancing, there are also internalÂ forces at work. According to Korn Ferryâs Tapia,Â underrepresented employees often get pigeonholed byÂ society into thinking that they can only aspire to certainÂ roles or professions. Often, they internalize these negativeÂ messages and their confidence suffers as a result.
HR leaders can help by creating a culture that makesÂ employees feel valued, clearly communicating the pathÂ to advancement, and providing support along theÂ way. One way to empower diverse employees to growÂ in an organization is by offering career mapping thatÂ demonstrates how they can advance beyond the jobÂ that they currently hold. Leaders should outline theÂ performance expectations for each position and makeÂ employees aware of any development opportunities thatÂ can help them meet those standards.
âItâs important to host employee trainings on what itÂ takes to reach the leadership level within the company orÂ respective industry. Itâs hard for more diverse employeesÂ to actively be thinking about leadership positions whenÂ their own company has never broached the subject withÂ them. Make upward mobility an active conversation withinÂ your company that is inclusive of all employees,â JenkinsÂ explains.
And be sure to monitor employeesâ progress andÂ experience. HR should consistently communicate with allÂ employees to ensure that they are satisfied with their workÂ experience and on the right track to success.
âWhile representation numbers are a guide, we knowÂ that numbers alone do not define success,â says Ganesan.Â âWe monitor our colleaguesâ experience of inclusionÂ at TD Bank through regular surveys, focus groups, andÂ ongoing feedback to and from diversity and inclusionÂ committees within each business. As many colleaguesÂ relate to more than one diverse group, we are taking anÂ increasingly holistic approach to inclusion. Our initiativesÂ are interconnected: they focus on our colleagues, ourÂ customers, and the communities we serve.â