Diversity

Why is inclusive leadership the next big thing?

Diversity must be inclusive if it has a chance of delivering benefits to businesses.

By Fiona Smith

Alan Joyce, the chief executive of Qantas, likes to say that if he, as a gay Irishman, can run Australia’s biggest airline, there’s no reason why an Indigenous woman couldn’t.

For now, this is very ambitious thinking. The evidence is that corporate Australia is a million air-miles from being that inclusive. A study by the Australian Human Rights Commission has found that of Australia’s top 200 listed companies, only 15 per cent have female chief executives; just 10 of the 201 chief executives come from a non-European background; and none are Indigenous.

Joyce, however, is looking to the future and backing his words with programs to raise the proportion of Indigenous employees to 1.5 per cent of the 30,000 Qantas workforce by 2018 (they are 3 per cent of Australia’s general population). Women already make up 34 per cent of Qantas senior managers.

For Joyce, inclusion is more than a personal crusade; it is a business imperative. Being able to draw on the views of people from different backgrounds results in better decision-making, more innovation and better relationships with customers. He says diversity in the Qantas workforce is a factor in the airline’s two-year turnaround from a $2 billion loss to its best-ever performance in 2016.

“A lot of it, I put down to our diversity and focus on diversity,” he said at a forum in 2016.

Diversity vs inclusion

Diversity and inclusion, however, are not the same thing.

A diverse workforce looks something like the Australian population, drawing on the experience and perspectives of a wide and varied group of people, of different genders, sexuality, races, cultures, ages and abilities. Inclusion is about valuing their difference, making them welcome and ensuring that they are represented at all levels of an organisation.

“Inclusiveness is as important as diversity because, if you don't have that, you don't have people willing to express their views and be open.”

As Joyce says: “Inclusiveness is as important as diversity because, if you don’t have that, you don’t have people willing to express their views and be open and I don’t think you get the right outcomes.”

The moral argument for diversity and inclusion may be easily won on the basis of fairness. And despite ongoing resistance to change, those who prefer to live in a monoculture are no match for the powerful global forces ranged against them.

Inclusive leadership traits

Business is grappling with globalisation and emerging markets, a need for rapid innovation, and an increasingly diverse population of customers and employees, according to Juliet Bourke, who leads the Australian Diversity, Inclusion and Leadership practice at Deloitte in Sydney. 

Group-think will not be up to the task of managing these seismic changes and a new kind of leadership – dubbed “inclusive leadership” – is required to survive and thrive in this kind of climate.

“You are not a good leader if you are not inclusive, because the world is diverse. If you can’t do that one, you are not a leader for the future,” she says.

As an expert in cultural change, Bourke has identified what it takes to be an inclusive leader. As well as being committed to diversity and inclusion, these leaders must be aware of their own biases, she says. They must be collaborative and curious about different ideas and experiences. Importantly, they need the courage to admit to their own failings. Australia, however, isn’t exactly overrun with leaders like that.

“I think it’s an emerging capability because we haven’t been focused on it,” says Bourke. “We have been focused on other aspects of leadership, like influencing, business judgement and strategy. We are only just starting to realise – in relation to diversity – just how important it is to our future, with the global marketplace, diversity of thinking and demographics.”

How to achieve workplace diversity

Elizabeth Broderick, convenor of the Male Champions of Change business action group and Australia’s former Sex Discrimination Commissioner, says diversity has become the leadership challenge of the decade.

“It is just that it is so difficult. There is no one thing – or even a number of things – that will necessarily deliver the outcome that you want or expect,” says Broderick, who is now a senior adviser to the head of UN Women in New York.

Employers may think they can solve their lack of diversity by setting targets, for instance, but Broderick says this will not work on its own. “You need to be bold in experimenting with different strategies and you need to be courageous in cutting off those strategies that are not delivering.”

Such strategies may be as simple as the one Alan Joyce used to make sure the women he mentored were getting equal treatment. He audited his diary over six weeks to review how much time he was allocating to his women mentees. As it turned out, he was satisfied with the result, but the audit was “hugely” symbolic and served as a model for other leaders in Qantas.

Bourke is hopeful that inclusive leadership will soon replace the old-style “heroic leadership” as a core capability from an early stage of people’s careers.

“At the moment, we don’t have leaders who know how to lead a diverse workplace. They know how to lead factions, but the problems we are facing will not be solved through factions. It is fundamental that you work out how to include everybody.”

The Male Champions of Change strategy that Broderick set up in April 2010 encourages Australia’s prominent male CEOs to commit to gender equity. But not everyone who joins is already a great leader for women.

“Some come in because they fundamentally believe in the human rights agenda of gender equality,” says Broderick. “Others come in because they believe it is good for their business. Some come in because they are just interested and want to learn more, but they have indicated that they are committed to stepping up.”

But she’s observed that when they’re in the group, among their powerful peers, “no-one wants to be the weak link”.

“After a couple of years there, everyone has moved to a place where they believe – particularly in terms of gender diversity – not only is it a business imperative, but it is a basic human right as well. I see personal growth, absolutely.”

What an inclusive leader looks like

Human resources expert Rhonda Brighton-Hall says that her former boss at Commonwealth Bank, Sir Ralph Norris, was the most inclusive leader she has ever seen in action.

“You can tell an inclusive leader not by what comes out of his mouth, but by the actions they take and the people around them. And what you saw around Ralph, whether it was his direct reports or the people he mentored and sponsored, you saw incredible diversity around gender, age, thinking, education. Their passport didn’t matter.”

Norris had an interesting technique to make sure all the people on his executive team could collaborate. “He made all the executives, once a month, go and have lunch with each other,” recalls Brighton-Hall. “He believed that you have to understand each other to respect each other and understand where you are coming from.”

“At the moment, we don't have leaders who know how to lead diversity. They know how to lead factions.”

Now on the board of the Australian Human Resources Institute, and launching an online knowledge base called Making Work Absolutely Human, Brighton-Hall says there are plenty of people who talk the talk, but inclusive leaders, such as Norris, are rare.

“I think you have got people who are incredibly articulate, but when you look at the people on their team or the people they are mentoring and coaching, they are all pretty much the same.”

The good news for old-style thinkers is that they can learn to be inclusive leaders. And if they do make the effort, they not only get to continue as leaders, but they can lead more effective organisations as well.

As Bourke points out, when she interviewed 17 inclusive leaders as part of her research, “All the leaders we spoke to had been practising these things, learning and experimenting over time. They weren’t born that way.

“Some people have a faster time of learning. They have, as a starting point, a more open mindset as a personality trait. It makes it easier for them to learn these things.” But, she adds, people with a “fixed” mindset can also develop these characteristics, it just takes longer.

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