The hidden cost of diversity

The hidden cost of diversity

Whether it be UK initiatives to increase female representation in the boardroom or the recent publicity about diversity at the Oscars, it is certainly true that the subject of diversity has risen up the corporate and public agenda over the last few years. And as business leaders you don’t need me to tell you how important diversity is to an organisation. Countless surveys and studies point to the positive influence diversity can have on corporate culture, strength and profitability.

In fact, as Alan Mullally, the CEO of Ford once said “It’s the only business case we need—the only way to satisfy diverse customers is to include their perspectives inside the company.” So with the corporate voice so in favour of diversity, why have I titled this article ‘the hidden cost of diversity’? Quite simply, because new research by the University of Colorado’s Leeds School of Business has revealed something startling about attitudes to diversity as they play out with an organisation.

With diversity being such a positive force within a business it would be natural to expect that promoting diversity would have an equally positive effect on the way in which individuals are perceived. However, the report’s authors have found that those promoting diversity are perceived in different ways depending on their ethnicity and whether they are male or female.

The study surveyed U.S. executives across a range of diversity valuing behaviours. Much to their surprise the authors found that engaging in diversity valuing behaviours didn’t affect the way in which white men were rated by their bosses. In other words, such behaviours neither boosted nor had a negative impact on the way in which they were perceived. However, if a woman or a non-white man promoted diversity it had a negative impact on the way in which their competencies and performance levels were rated.

As the report’s authors concluded, such hidden bias cannot only hold back the move towards diversity it ‘can lead to women and minorities choosing not to advocate for other women and minorities once they reach positions of power, as they don’t want to be perceived as incompetent, poor performers.’

The study is a stark illustration of the way in which good corporate governance does not simply depend on the outward promotion of positive behaviours which will benefit the organisation. In order to truly deliver change, executives have to assimilate those beliefs and behaviours into their own mindset. However strong the driver, however great the incentive, unconscious bias can actually act as a disincentive to change as well as putting a brake on the valuable contributions which a diverse leadership can bring to businesses.

Alison Griffiths
alison@gerranium.co.uk
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