In 2020, a survey by LinkedIn reported that diversity roles were up 71%, showing that businesses are finally recognising the importance of DE&I in achieving success. An inclusive, diverse company culture is not only an ideal ethical target, but a business one too.
With unique backgrounds, opinions and ideas, organisations benefit from greater resilience and unrivalled creativity. However, to be able to reap the benefits of this infrastructure, there must be a plan in the pipeline. To build more diverse leadership capability at senior levels, organisations need to start thinking about development and succession planning earlier in an employee’s career.
People often talk about getting “stuck”, typically around middle management, with talented individuals from ethnically diverse backgrounds often reporting barriers to progression through unwritten rules, networking, access to opportunities, support and simply just having enough confidence to apply for a role.
In fact, a study of more than 24,000 UK employees found that 74% of black respondents wanted to progress, compared with just 42% of white respondents. A third of these black respondents looking to progress cited their ethnicity as their cause of concern for career progression, even in 2020.
How will we ever achieve representation at senior levels if these barriers continue to exist?
Benefits of having a more diverse leadership population
It’s widely recognised that diverse leadership brings about various benefits. From driving ESG efforts to boosting the bottom line and attracting emerging Gen Z talent, a diverse leadership population is pivotal for performance.
In a recent report by McKinsey, it was found that companies with more female executives outperformed their male-populated counterparts by 48%. Similarly, in cases of ethnic and cultural diversity, performance was up 36%.
And in a separate study carried out by Gartner, it was stated that 75% of organisations with diverse and inclusive frontline decision-making teams will exceed their financial targets through 2022. The study also said that there was a direct correlation between diversity and innovation, essentially future-proofing operations.
Diverse leadership is known to improve employee engagement and satisfaction. Seeing yourself and your background represented in leadership is more inspiring, motivating and fulfilling. This is invaluable for proactively constructing succession pipelines.
Challenges to building a more diverse talent pipeline
Nothing worth having comes without challenges. This is particularly true of building a more diverse talent pipeline.
A common concern my clients note is that too many assumptions are made by senior leaders about who’s got potential, typically reflecting their own unconscious biases, without taking into account the bigger picture, and often confusing it with high performance. This challenge is felt almost universally, and is even cropping up in instances where AI is being employed.
With this in mind, my clients often ask me if they should be assessing those pre-identified as having potential or whether to open it up to all in order to allow things to happen more organically and inclusively. However, budget is often a factor, and this will ultimately drive behaviour.
Despite this constraint, succession planning is critical for business continuity - in any activity, game or scenario, not having your next move planned out can often prove fatal in times of crisis. In business terms, this translates to companies making a poor, rushed hiring decision when someone leaves the business for whatever reason.
In an article by Kathryn Tyler for SHRM Magazine, she likens it to a game of chess, saying, “succession planning is a bit like chess in that HR professionals must assess the board with an eye on the next move—and the next five moves thereafter. If one piece falls, the individual must develop a winning strategy using the pieces that remain.”
SHRM also ran a succession planning survey with HR professionals in August 2021, and found that only 45% of organisations had some form of succession planning in place and of those, only 21% said it was a formal plan.
How to build a diverse leadership talent pool
So, what do you do? To achieve a diverse leadership talent pool, you need to clearly define potential and how it differs from performance, in order to then be able to objectively assess the talent you have in your organisation, building a pipeline for the critical roles. Practical solutions include:
Ascertaining individual strengths and development considerations through in-depth assessments and feedback discussions
Remembering that potential is dynamic and should therefore be treated as something that changes
Investing in diversity and unconscious bias training for leaders
Have two or three people who could potentially backfill roles
Reviewing succession plans regularly to allow for changing dynamics and events.
Ultimately, the introduction of a third party can make for a more objective and effective approach when building a diverse talent pipeline, which is where Hanover can help.
We can help you define potential, assess your leaders and analyse your leadership cohort at an organisational level to create a composite report with group development recommendations – either through workshops and masterclasses or creating a leadership development programme.
Contact me to discuss how we can create a more diverse leadership talent pipeline for your organisation.
