Leading and sustaining a successful and ethical business can be a complex game. For some, this can be all the more (seemingly) complex when you bring together people with different backgrounds and perspectives.
However, we now know that well-managed diverse teams lead to greater business benefits, innovation and creativity.
Where some are still connecting the dots is in understanding the positive impact of diverse teams and inclusive behaviours on ethical decision-making and corporate governance.
Several studies have shown that diversity on boards and in teams brings fresh thinking, increased focus on problem solving, and greater transparency.
As companies plan leadership curriculums for 2018, we think a significant focus on the value of diversity (of background and thinking approaches) in ethical decision-making and problem-solving is warranted.
dynamics make a difference
It’s important for leaders to understand the value of diversity (of background and thinking approaches) in ethical decision-making.
People with different backgrounds bring new information, but what really counts is the dynamics of diverse teams when making decisions.
In a seminal article published in Scientific American, Professor Katherine Phillips from Columbia Business School writes that ‘interacting with individuals who are different forces group members to prepare better, to anticipate alternative viewpoints and to expect that reaching consensus will take effort’.
‘When we hear dissent from someone who is different to us, it provokes more thought than when it comes from someone who looks like us,’ she says.
It’s these behavioural dynamics that drive ethical successes and failures, argues Dennis Gentilin, author of The Origins of Ethical Failures and publicly named ‘whistleblower’ in the FX trading scandal that rocked the National Australia Bank in 2004.
Speaking with us at Diversity Partners, Gentilin says ‘we need to surround ourselves with diverse opinions to keep ourselves accountable to our standards and values because we can all fall short.’
‘If we surround ourselves with challenging views and create an environment where others feel they can ‘speak up’ then we avoid going down the slippery slope of ethical failure,’ according to Gentilin.
Unfortunately, sometimes it takes a crisis for organisations to fully understand and appreciate the contribution of good diversity and inclusion practices to ethical resilience.
In 2011, one year after the Gulf of Mexico oil spill, I joined a global facilitation team for BP’s newly formed Diversity & Inclusion Academy. As a result of this crisis, and following a range of independent studies on the situation, it became clear that decision-making biases (particularly confirmation bias) and the lack of a safety ‘speak up’ culture were among contributing factors to the disaster.
BP subsequently focused on leadership education so that all employees act with greater awareness of core values such as safety, respect and courage, and have awareness and skills to challenge unconscious biases.
Tips to encourage diverse thinking approaches and perspectives
Although we’re all susceptible to forces that make us ignore risks, leaders at all levels of an organisation can take steps that will encourage diversity of thought and potentially reduce ethical risk.
Here’s a few tips to get started…
1. Develop your awareness of cognitive biases. Psychologists and behavioural economists have highlighted many biases that impair our ability to make objective and effective decisions. We all have biases, but we’re often not aware of them playing out in our minds.
Unconscious bias training gives leaders an opportunity to understand how easily our decisions are impacted at work by affinity bias (our natural tendency to gravitate towards ‘people like us’), confirmation bias (our tendency to seek out information that confirms our beliefs and ignore conflicting evidence), and groupthink (where pressure for unanimity overwhelms realistic appraisal of alternative courses of action).
2. Give teams explicit permission to disagree with you. While seeking feedback from others is essential, some leaders go further by appointing a ‘devil’s advocate’ in meetings to encourage multiple perspectives and normalise challenge. One CEO we know routinely tells colleagues that ‘you have an obligation to disagree with me’.
3. Engage team members from outside of your regular circle. Inclusive leaders make a concerted effort to understand the experiences of people who are not part of their tight-knit ‘in-group’ and who may feel (unintentionally) excluded from some key decisions.
Simple things such as where you hold meetings and who gets invited to them can make a difference.
Decision making experts emphasise the importance of hearing from people who are ‘cognitively peripheral’ – who have information that is not generally known – rather than having discussions disproportionately influenced by people who are ‘cognitively central’ – who have knowledge that is shared by many members of the group.
Or, as one global organisation advises its leaders, every group needs to ‘hear from the quietest person in the room’.
An earlier version of this article appeared in Leadership Matters, the newsletter of the Institute of Managers and Leaders for Australia and New Zealand in 2016.
If you’d like more information about this topic, or any other resources to help progress diversity and inclusion in your firm, please email us at info@diversitypartners.com.au.
