NZIM: Diversity – fact or fad?

Diversity at the top and in the ranks of workforce boosts organisational performance. Managers and directors who ignore the evidence of the difference diversity makes do their enterprises no favours.
The focus is currently more on gender than ethnic diversity. The New Zealand Stock Exchange (NZX), for example, is making much of its new rule requiring listed companies to disclose the level of gender balance on boards and in top management tiers.
But ethnic diversity is equally critical. Sadly, recent survey of New Zealand and Australian workforces suggests that while ethnic diversity is seen as generally positive, just half the respondents think it delivers organisational benefits.
Conflicting perceptions and ingrained bias notwithstanding, NZIM chief executive Kevin Gaunt sees diversity as both topical and important. It will be one of management’s critical strategic issues for the next 20 years, he says.
New Zealand’s changing demography will change attitudes toward the importance of diversity, as will the growing influence of Asia. “The centre of balance of the world economy is shifting to India and China. Employers will need to appreciate the value of employing people who are often, sadly, now seen as interlopers,” says Gaunt.
A Leadership, Employment and Direction (L.E.A.D.) survey conducted by Leadership Management Australasia (LMA) recently found that fewer than third of employees want more diversity in their future workplace. “The results suggest that ethnic diversity is more tolerated than embraced,” said LMA’s executive chairman Grant Sexton. “There’s reasonably positive attitude toward ethnic diversity but mixed feelings about the value of extending it.”
More than 2000 Australian and New Zealand business leaders, senior and middle managers and non-managerial employees were surveyed for the L.E.A.D. study. third of respondents at all three levels were opposed to increasing the levels of ethnic diversity in their organisations. Leaders were, nevertheless, 37 percent more likely than their employees (25 percent) to favour more diversity. Sexton thinks this suggests better leadership-level understanding of the potential benefits and advantages more diverse workforce delivers.
The study also showed that attitudes toward diversity are driven by existing experiences and outlooks. The future challenge for leaders and managers, therefore, is to create an environment that celebrates diversity, and leverages and harnesses its potential rather than fearing and resisting it, according to Sexton.
Gaunt thinks companies wanting to do business offshore must embrace ethnic diversity or risk limiting trading opportunities. First-generation immigrants undoubtedly struggle in the New Zealand workplace, he says. “But the children of immigrants grow up with local language skills enhanced by an understanding of the countries their parents came from. They know how to connect with these countries and these markets. This makes them more valuable to an organisation than New Zealander who hasn’t got these links to China, Singapore, Vietnam, India or wherever,” he adds.
Internationally, diversity has shot to the top of the management agenda – earning it fad status. It’s reflection of changing leadership attitudes and values. Successfully managing diversity is both the new challenge and the new opportunity, as much as anything because more diverse workplaces deliver demonstrably better outcomes.
Diversity is even being called strategic asset. Thinking of it as such reportedly lifts performance outcomes and boosts productivity. According to American diversity coach Jim Rodgers, interpreting diversity as strategy allows management to challenge an organisation’s existing paradigm and introduce new thinking about people.
But like quitting smoking or any other entrenched practice, organisations must be “ready” to effectively implement diversity strategy. And, according to Rodgers, “readiness” includes having CEO who is committed to, and vocal about, the benefits diversity brings.
He identifies the three biggest barriers to effectively managing diversity as:
• poor management skills – the inability to recognise, appreciate and capitalise on individual differences;
• ethnocentrism – belief that my way is the only way;
• stereotypes – beliefs about group applied to an individual.
NZIM is partnering with the Department of Ethnic Affairs to identify ways to bring the strategic need for more enlightened strategic thinking to business leaders. “We think this is very important to New Zealand enterprise,” says Gaunt. “It brings more petrol to the nation’s gas tank and recognises the critical role of enhanced long-term productivity. And it is available now if we can only recognise it.”
New Zealand’s record on gender diversity at senior management and board level is, by global standards, appalling. Some research completed by the Australian Institute of Management (AIM) earlier this year is, however, helping NZIM sell and build more compelling case for greater gender diversity in management.
In Australia, as in New Zealand, women remain under-represented in management and leadership roles. The AIM research was designed to tackle the seemingly intractable nature of gender inequity in leadership. It asked two key questions: what is stopping Australia (read New Zealand) from moving forward? And how could AIM most successfully intervene to accelerate change?
NZIM is now working closely with AIM to share management development experiences, and analyse and measure management performance in the two economies. AIM this year adopted NZIM’s Management Capability Index, an indicator of management performance.
AIM’s gender study concluded that, given the limited public understanding of Australia’s gender equity issue, the country needs “national attitudinal change campaign” to get the point across. The campaign would sell two key messages:
• women want to work for companies that support them;
• society will not support companies that perpetuate inequality.
It also came down with five fairly hard-nosed recommendations (see box story “Gender defender”).
New Zealand enterprise should look carefully at what is happening in Australia. Diversity – gender, ethnic and otherwise – is not widely or enthusiastically embraced here. It is certainly not considered strategic asset or even way of thinking about enhanced management and organisational performance.
“That will have to change if we want to make better progress,” says Gaunt. “The evidence and logic supporting the case for greater diversity at all levels of the organisation is one we believe all managers and members should embrace. It’s an important issue. Organisational, and even political, leaders can’t afford to keep walking away from it.” M

Gender defender
After conducting research into gender diversity in management, the Australian Institute of Management (AIM) earlier this year recommended that:
The Australian government set aspirational targets for women in management.
An independent government and working group be set up to agree and publish best practice case studies on women in management.
Best practice management standards for gender diversity be linked to “at risk” executive remuneration.
Companies sign up to the United Nations Women’s Empowerment Principles.
All companies implement clear guidelines that support flexible work for all employees.

Reg Birchfield FNZIM is writer on leadership, governance & management. [email protected]

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