Behavioral Diversity Within Executive Teams Propels Growth

So much has been written about the importance of diversity in the board room, executive suite and leadership teams that it has become common place to openly discuss the benefits of diversity to a company by those who operate within the company at all levels.  Most would agree that diversity is important.  Few understand why and more importantly how to encourage and nurture diversity in such a way that it efficiently and effectively positively impacts the bottom line of a company. 

For those organizations that still don’t get it, Glassdoor is riddled with employee criticisms of those companies that lack diversity in the leadership ranks with statements such as “good ole boy system” and “yes men culture”.  They serve to shine a bright light on those companies that are behind the times and have not yet realized the incredible benefits that diversity can have on a company.

However, diversity for diversity sake serves no one including the organizations that it is meant to benefit.  Furthermore, as society further equates gender, race, religion and sexual orientation as diversity criteria, organizations risk their efforts of inclusion to negatively impact their growth trajectory by only paying attention to surface level diversity.  In fact, in 2018, California put into law that all public companies headquartered in California must have at least one woman board member (more depending on the size of the board).  This is not to say that this isn’t a great step forward.  But it is a great step forward for equality, not diversity.  Diversity might be a secondary by-product but the correlation is not guaranteed. 

What is guaranteed is that executive teams must have behavioral diversity to be successful.  Success is born from the execution of great ideas in the most efficient and effective way possible that maximizes the top and bottom lines of the income statement.  This requires teams to critically evaluate the degree to which they maintain a high degree of behavioral diversity within the team framework.

Define Diversity

Dictionary.com states that diversity is defined as follows:

1.       The state or fact of being diverse, difference, unlikeness.

2.       Variety, multiformity.

3.       The inclusion of individuals representing more than one national origin, color, religion, socioeconomic stratum, sexual orientation, etc.

4.       A point of difference.

It is within the last point that behavioral diversity is found however in too broad a brush stroke.  As a point of difference, we are all diverse from each other.  But that clearly doesn’t guarantee diversity or there would be no “good ole boy” teams as stated earlier.

The diversity definition needs to include diversity of behaviors as much as it includes traits in which we identify ourselves.  Consider this, a football team with all quarterbacks would have a hell of a time playing defense.  The team needs diversity of skillsets.  Furthermore, a team with all captains might have great ideas of what to do on paper but would struggle in execution.  A team with all middle-class white 25 year olds might (though this point is debatable) have good commonality and bond and rapport but would lack the deep sense of belonging to a team that can only be born from empathy of others that is born from true understanding of something different and unique.  And lastly, there is behavioral diversity that is defined as the innate behaviors that an individual possesses that is unique to that individual.  An individual can deviate from their innate behaviors for a period of time as a pacifist could kill a lion if threatened in a corner.  But all of us have behaviors that we feel most comfortable performing at a given point in time based upon who we are and how we have been raised.

Why is diversity important

Diversity of all types is important.  Diversity breeds equality and team cohesion.  It allows us to celebrate our differences and embrace our uniqueness.  It ultimately provides us as individuals with the ability to see ourselves as something different and special. 

Companies however require diversity in order to scale.  As an organization grows, unique skillsets are needed.  We write job descriptions and give quarterly goals to ensure that the unique skillset necessary to perform a certain job is maintained to the highest degree possible.  That is done in the vacuum of an individual role – a silo.  Extrapolate that out to an entire organization, even a small one of just 50 people, and it is easy to see how a company filled with skillset diversity, even operating at a high degree of efficiency and effectiveness, can ultimately fail.  In other words, even if everyone in your orchestra can play the music note for note, the music can still suck.

This is where behavioral diversity comes in and why it’s so important to the overall success of an organization.  As a company scales, unique challenges are confronted.  The ability to first see that challenge on the horizon requires unique behaviors.  The ability to analyze the data and make the right decision in a timely fashion requires a different set of behaviors.  The ability to plan the steps and then execute upon those steps requires different behaviors.  And finally, the ability to clearly communicate those changes to the broader team requires yet another set of behaviors.  Assuming everyone on your leadership team possesses the mastery of the intrinsic behavioral skillsets to accomplish all of this is incomprehensible.  Yet, CEO’s make this assumption every day and sometimes even to the demise of the company.

I would argue that Enron, WorldCom, Kodak and most recently General Electric all failed (albeit in different ways and with different outcomes) because of the lack of behavioral diversity within the executive teams.  Of course, these are extreme but the examples are useful in punctuating the extreme need for behavioral diversity within an executive team.

How To Ensure Your Leadership Team Has Behavioral Diversity

So, let’s take what we have discussed above and bring it out of the abstract.  How can you apply the notion of behavioral diversity to your executive and leadership teams in your company?

Though this list is not all-inclusive by any stretch, it is a good start to ensure these different behaviors coexist with different individuals in leadership positions within your company.  If you are a CEO, and you have great strategy sessions but no pull through from your team, it is because your leadership team lacks behavioral diversity.  Additionally, if your team endlessly looks at data from all angles before making a decision, regardless of the type of decision being made, it is because your leadership team lacks behavioral diversity.

Here are four behaviors to critically evaluate your leadership team on in terms of whether or not they possess a high degree of behavioral diversity that can allow your organization to scale:

  1. Proactive versus Responsive – In software companies, Customer Success is the proactive team typically responsible for account renewals whereas Customer Support is the responsive team typically responsible for break-fix types of calls.  A proactive person could get frustrated within the confines of a high volume call center deeply yearning to proactively fix the root cause of all these calls.  Likewise, a company’s leadership team is called upon to respond to a shift in consumer sentiment.  In the same company, leaders might have been called upon to move manufacturing from China at the first hint of tariff talk from Washington D.C.  Both behaviors are critically important to navigating the business landscape today.

  2. Task Orientation versus People Orientation – Those who are more task oriented are direct in their communication style and blunt under pressure.  They are analytical and most comfortable with data.  Furthermore, their decision making style is to decide and then tell.  This is in contrast to people oriented individuals.  They tend to be more collaborative and enjoy making decisions in a more democratic fashion.  They build things collaboratively and are critical to the morale of the overall team.  Both types of individuals are critically important in any size organization.

  3. Risk Tolerance – Leadership teams need individuals who are comfortable with taking risks and cautious with taking risks.  Different situations require different risk profiles as different decisions can have a higher cost (in terms of real dollars or opportunity cost) to the company.  Some extremely cautious risk takers get labeled for their inability to make a decision.  However, in my experience, assuming these individuals are paired with others who can make decisions, they have a superpower that will benefit the company in that they can see all sides of a problem that others simply overlook.  A company can only benefit from this superpower if behavioral diversity exists.

  4. Casual versus Careful with Rules – The obvious example here is the need to ensure the CFO is careful with the rules whereas the VP of sales needs to be more casual with rules as she will be required to challenge the rules in which prospects dictate.  A growing company, by definition is doing something tomorrow that it has never done before.  Extreme rule followers are required once this becomes codified into a process.  Until that happens, those who are casual with rules and will therefore challenge the status quo are of extreme benefit to the growth trajectory of the company.

A Word Of Caution

If your evaluation determines that your leadership team does possess a high degree of behavioral diversity than congratulations to you.  The end result of that is that your business is following the right strategy and executing flawlessly.  Your team is able to pivot quickly when the environment necessitates and is able to effectively and efficiently communicate those pivots to the team at large.  An unfortunate by-product of such behavioral diversity can be conflict.  Conflict is not bad.  There is positive and negative conflict.  The determination of whether or not it is good versus bad conflict depends on the interpretation of those involved in that conflict.  A leader’s role is to ensure that conflict produced from behavioral diversity is good and drives the business forward.  A great CEO can recognize the verbal and non-verbal queues that originate from bad conflict and positively turn it to good and constructive.

Diversity quotes

Here’s a couple of diversity quotes that I found in researching this post that I really enjoyed.  I hope you enjoy and can use them to propel your business forward or perhaps encourage you to further reflect on your company and the benefits of behavioral diversity:

“Diversity: the art of thinking independently together.” ~Malcolm Forbes

“Diversity may be the hardest thing for a society to live with, and perhaps the most dangerous thing for a society to be without.” ~ William Sloane Coffin, Jr.

“Diversity is about creating an environment where a person can bring their whole self to work” ~ Laura Miller

Summary

Today, as I write this, there are 33 female CEOs and 7 out of 10 senior executives are white men and Fortune 500 companies.  That is a hell of a lot better than it was 10 years ago, but a long way off from true equality.  Diversity, by its standard definition, and equality are noble and important ideals that must improve.  But diversity for diversity sake, will only take your business so far.  Behavioral diversity is what is necessary to grow and scale your business.  If you have read this far, I hope that this post compels you to reflect on how you can incorporate behavioral diversity into your diversity initiatives of your leadership teams.  Good luck and if we can be of any service in helping you achieve this, please let me know by emailing me directly at briann@ronosgroup.com. The RONOS Group helps companies optimize talent at all levels to exceed goals and rapidly grow. We hope to help you in the near future.