When it comes to diversity and inclusion in the C-Suite it is a national embarrassment where the lack of representation has reached epidemic proportions. According to the latest data for Fortune 500 companies, there are only 31 female chief executive officers and of this group, only two are women of color. What’s more, there is not a single African-American woman CEO. Right now, there are only four African-American men in the top leadership spot and by the end of this year, that number will most likely fall to only three when Ken Chenault retires from American Express.
As of January 2016, there were only nine Hispanic CEOs. There are a number of moral and ethical reasons to have a more diverse leadership team, of course, but there are also true, long-term business drivers that positively impact earnings. As a recent Harvard Business Review study tells us, when corporate leadership, including the CEO, board and other C-Suite positions, increases to only a 30 percent female share, there is a one percent rise in net margin, which translates into a whopping 15 percent increase in profitability. We recommend three impactful and effective steps leadership teams should take to foster a healthy diverse and inclusive culture.
- Successful Succession. There is no quick fix when it comes to ensuring a truly robust, diverse, and inclusive team built to lead in the future. CEOs need to commit themselves and their management teams to a long-term plan that includes bringing in new hires from outside the company who are identified as real leaders and groomed as such. No “token hires” here. Another important part of this is for an executive assessment program to be instituted at the time of hire with continual implementation because this will help to match candidates with company cultural fit. One of the most impactful payoffs to executing this strategy is that employees are far more likely to stay with their employers rather than move to another company because they know they are valued. They sense they are being groomed for future leadership positions because current management sees their potential. As a result, these talented employees will more likely stay onboard.
- Search Firm Collaboration. When CEOs and CHROs collaborate with executive search firms to build a pipeline of talented, diverse candidates, great results arise. That’s because these third parties become truly part of the solution. A successful candidate search starts at the spec level, so CEOs and CHROs need to partner with their vendors at the very nascent stages of the search process to set accurate qualifications that expand the potential applicants and outline expectations that a certain number of diverse candidates will be included in the talent pool. This does not mean a diverse hire will be made for every opening, but at the very least it ensures there will be a nice variety of candidates from which to choose. To be sure, of the entire group of potential hires, it is the best candidate who will earn the job offer.
- Create a Coaching Plan. When it comes to hiring, succession planning and mentoring, there are a lot of hidden biases that majority leaders, both male and female usually just do not see. The good news is coaching can help to combat these covert tendencies if deemed a developmental need for the organization. Coaching benefits current executives as well as new hires into an organization because it facilities a level of introspection and an opportunity to take cognitive and very real steps toward a more egalitarian culture. Leadership assessment tools are also effective in vetting potential employees, evaluating management competencies, and selecting likely leaders for development. Statistically, we know the situation at the C-Suite and the surrounding levels is moving too slowly, but the good news is that leadership today has the opportunity to seek out and leverage the power of a very talented group diverse, high-performing employees which, as outlined, is a true win-win for all.