Business leaders need to ensure they avoid making important decisions in a state of stress if they want to maintain an inclusive culture and an optimisation focus post-Covid.
Right-sizing through the lens of diversity and inclusion was the theme of one of our recent Roundtable webinars.
Diversity Works New Zealand Chief Executive Maretha Smit said the lessons from previous crises show there is a risk that diversity and inclusion may recede as a strategic priority for organisations.
“This is not as the result of an intentional shift in the mindsets of our companies and leaders to be less diverse and less inclusive, but priorities shift as the fight for survival focuses attention on the most pressing basic needs, such as dealing with devastating losses of revenue, implementing measures to adapt to new ways of working, and maintaining productivity in ambiguous times.”
“Yet we would argue a retained focus on diversity and inclusion is exactly where the biggest gains can be made.”
Diversity Works New Zealand Chair Susan Doughty said boards have an important role to play to ensure our organisations don’t pull back from the hard work they have done to further diversity and inclusion , putting them at a disadvantage competitively.
“There’s no doubt boards are going to have a significant focus in the short-medium term on the financial sustainability of the organisation. But they will also have a longer-term focus on shareholder interests and that needs to factor in all of the organisational health measures.”
Boards need to be questioning their chief executives about the impact any restructuring will have on the organisation’s diversity profile, targets that have been set and what they are doing to safeguard the diversity and inclusion advances that have been made.
“It’s about also asking, is this really what we should be doing? Are there other ways we can manage through this crisis and maintain some or all of our workforce?”
It’s important that the board considers not only financial impacts, but also customer impacts, operational impacts, and the impacts on people, Susan said.
Executive Coach Hélène Deschamps explained that humans faced with disruption enter a state of stress, because our brains are wired for survival, meaning we will detect danger before we detect opportunity.
“This has important consequences for us as leaders, because it impacts our perceptions of situations and our decision making,” she said.
The part of the brain responsible for logical thinking and deliberation goes on the “back-burner”, which is appropriate in short-term dangerous situations but in the business context is likely to lead to suboptimal decisions, strongly affected by unconscious bias.
Hélène said leaders need to watch out for affinity bias, our natural tendency to trust more the people who are like us, whether that’s in terms of gender, age, ethnicity, cultural background, education, way of thinking or previous experiences.
“If I’m under stress, I’m more likely to rely heavily on people in my team who are like me. I trust them. I feel safe.”
During a restructure, this could have a direct impact on who is perceived as competent, who is perceived as essential and who is let go.
Experience bias – our tendency to overly rely on perceived experts – can also play a part. “Sometimes we think we are the expert. This prevents us from seeing other perspectives and from innovating.”
Expedience bias can cause leaders to think that to be effective, they need to be very decisive. This can lead to rushing to judgement without fully considering the facts.
Negativity bias is another potential danger. “Catastrophizing, shrinking the organisation more than needed, and focusing too much on the short term makes it very hard for the organisation to seize new opportunities when the time comes.”
Lion NZ People and Culture Director Robin Davies said businesses looking at reshaping their organisation post-Covid have a great opportunity to get more diversity in their workforce.
“We know more diverse teams working in an inclusive culture come up with better solutions to complex business problems.”
Robin said Lion has had the opportunity in recent years to restructure or reshape teams. Where leaders have put a more diverse team in place to do the same work, there has been a tangible improvement in revenue achievement and long-term sustainability outcomes.
Focusing on how diversity and inclusion delivers business outcomes is the way to make sure it stays on the agenda, she said.
Whether it’s changing the structure of your workforce, the size of your workforce, how your people work, working in a more agile way, or creating projects teams, there is an opportunity to focus on the inclusive culture piece because it will unlock success.
Hélène said there are strategies leaders can adopt to lessen the impact biases have on decision making, even in a time of crisis.
“Firstly, be aware that those biases exist, and that they are a lot more powerful than we think, especially when we are under stress. No one is immune to unconscious bias.”
Self-care is another strategy – leaders need to recognise that they, along with everyone else, are under pressure. “Take time to absorb what’s happening; look after yourself so you can look after others.”
Look at decision-making processes – now, more than ever, leaders need to involve others in decision making. “It’s all about bridging perspectives, which voices will you listen to, which ones should you actively look for,” said Hélène. Leaders need to explore how different employee groups are likely to be affected and ensure different voices are heard.
Examine principles and practices that may be detrimental to diversity and inclusion – ‘last in, first out’ is one that can impact diverse employees disproportionately because they are often the ones with the shortest tenure.
“An organisation that has put a lot of work into diversity and inclusion in the past five years could just wipe it all out.”
Look at the roles you are restructuring - the tendency is to keep essential line roles that protect revenue in the short term and consider support roles as less crucial.
“Staff in support roles tend to have more diversity. It’s not always the case but it tends to be.”
Hélène said leaders need to consider the organisation’s purpose and values and ask themselves what they mean in the new situation we find ourselves in. “How do I behave in a way that exemplifies those behaviours?”
The Roundtable webinar series, hosted by Diversity Works New Zealand Chief Executive Maretha Smit, brings together business and academic thought-leaders to discuss issues that will be crucial for workplaces in a post-Covid-19 world. Watch the full webinar, and others in this series here.