Senior leaders are more likely than more junior leaders to believe that their organizational culture invites diverse contributions and differing perspectives. This reality exposes organizations to risk. Teams often subscribe to the idea that risk management is an exercise in fending off or outmaneuvering external threats, such as economic recession, natural disasters, and global health pandemics. However, we often neglect to consider the ways in which our own leadership blind spots and shortcomings expose our organizations to risk.
What might these include? Communication gaps within the organization, inconsistent messaging about organizational priorities, insufficient technological capabilities to execute efficiently, and a lack of diverse perspectives all make organizations vulnerable to risk. Each of these internal challenges poses risk to our organization’s everyday operations and ability to successfully respond to external threats. This is even more true when leaders are unaware that these challenges exist, or the extent to which they impact the employee experience.
Let’s focus in on the lack of diverse perspectives and abilities, and how it affects an organization’s posture to respond to risk. Increasing diversity has been appropriately top of mind for organizations in recent years, and yet often leaders fail in their best attempts to leverage diverse teams. Diversity initiatives frequently fall flat for three reasons:
1. Leaders take an “add diversity and stir” approach.
Simply increasing the makeup of diverse individuals in an organization does not automatically lead to better decision-making, innovation, or business outcomes. Leaders must take additional steps to promote equity and inclusion on their teams to ensure diverse perspectives are brought to the table and incorporated into the team.
2. Leaders do not adequately weigh the risk posed by lack of diverse thought.
There are both mental health benefits for employees and results-driven financial benefits for organizations1. However, some leaders still underestimate the ways in which a lack of diverse thought can manifest and negatively impact business outcomes – and further, organizations underestimate how critical it is to make diversity of thought a priority.
Lack of diverse thought and, worse yet – groupthink – can prevent organizations from accurately identifying, assessing, and mitigating risk, including the risk of being outpaced by competitors. A 2019 Gartner study predicts that 75% of companies with diverse and inclusive decision-making teams will exceed their financial targets through 2022, and that gender-diverse and inclusive teams outperformed their less inclusive counterparts by 50%2. And while most organizations (83%) recognize that belonging is important or very important for their success, it seems only 11% say they are very ready to address this trend3.
These findings are unsurprising given a Gallup study that indicates only 55% of people agree that their organization has policies that promote diversity and inclusion4. All of these statistics work together to show that leaders agree diversity, inclusion, and belonging are important for business success, but do not know how to make it a consistent or successful reality for their organizations – and may not be making it a big enough priority in their overall risk mitigation strategy as it warrants.
3. Leaders believe their culture is more inclusive than employees perceive it to be.
It is hard to accurately assess our own organizational and leadership shortcomings. At McChrystal Group, we’ve collected data points on organizational operations from over 50,000 individuals across hundreds of teams from all industries and organizational levels. Our survey data show that when it comes to inclusion of individual perspectives, senior leaders have a different experience than that of lower-level employees. For instance, 69% of senior leaders and only 57% of those at other levels indicated that at work, their opinions are respected (versus ignored). Further, 58% of senior leaders feel that when they share feedback or ideas they are supported (versus judged), compared to 51% of those at other levels.
It’s easy to imagine how executives might assume that more junior staff share similar feelings of inclusion and psychological safety when offering new ideas or differing opinions, when in reality, they may feel left out of the conversation. It is also important to note that underrepresented groups such as women and people of color tend to occupy lower levels of leadership, so to truly establish diversity of thought at the senior level means to intentionally invite junior talent into the discussion.
The question then becomes: how can executives more effectively cultivate a culture that not only allows but proactively elicits and rewards diverse contributions, and in the process, mitigates risk? While individual leader behaviors can encourage inclusivity, we recommend a more robust, systemic approach. The following three recommendations are examples of how you can institute programs that encourage diversity of thought in a way that does not put the onus on the employees to merely “speak up more.”
1. Executive Sponsorship
Consider implementing an executive sponsorship program at your organization. What might this look like? Sponsorship is a relationship wherein a senior leader uses their power to promote, advocate for, and publicly solicit the opinions of a more junior employee. This not only provides an opportunity for high potentials at lower levels of the organization to gain visibility and credibility, but also allows for fresh points of view to enter the decision-making space.
2. Reverse Mentoring
Consider implementing a reverse mentoring program or infusing reverse mentoring practices into existing mentoring programs. Highly effective leaders have the intellectual humility to acknowledge that they aren’t an expert on all things and the next big idea can originate from anywhere in the organization, not just at the top. Reverse mentoring allows senior leaders to partner with and gain insights from a junior team member on any number of topics, including collaboration, technology, and workplace culture. Moreover, as Gen Z enters the workforce in larger numbers, keeping a pulse on generational trends via knowledge sharing with younger colleagues can prevent oversights in organizational change initiatives.
3. Rotational Programs
Consider instituting a rotational program where employees can learn about and contribute to different business units. Rotational programs allow employees to gain experience in a range of functional roles and assignments, increasing their technical skillset and broader understanding of how different processes and people within the organization operate. This information, coupled with the individual’s unique fresh perspective, can then be leveraged by the new team or business unit to reduce groupthink and blind spots in decision-making. Finally, these programs allow individuals to build new relationships across the organization, which can increase feelings of inclusion and belonging.
McChrystal Group believes that the “greatest risk to us, is us.” Our own vulnerabilities and shortcomings, whether they be a lack of diversity discussed in this article, or other communication, structural, or leadership shortcomings, leave us vulnerable to the threats that surround us. But there is much we can do to make our teams more diverse and inclusive to be best postured to react to the next unknown that comes our way.
Risk: A User’s Guide takes a deeper dive on other vulnerabilities organizations must mitigate to best detect and assess threats, respond to a risk, and learn from the process. Learn more about the book here.