Beyond the Stats: How to Drive Increased Leadership Diversity
The numbers tell part of the story. Despite a commitment to increasing diversity, equity, and inclusion, most companies haven’t seen a significant change in the make-up of leadership teams or their leadership bench.
Women make up 50 percent of the U.S. workforce but hold only 27 percent of senior vice president positions. At the C-suite level, only one in five leaders is a woman; one in 25 is a woman of color.
Black professionals represent only 3.2 percent of senior leadership and less than 1 percent of Fortune 500 CEOs.
Hispanics and Latinos hold just 4 percent of senior-level leadership positions in 2021, a level that’s unchanged since 2019.
Consider those numbers in the context of how increased diverse leadership impacts business results.
Companies with greater ethnic and cultural diversity among their leadership teams are 36 percent more likely to have above-average profitability.
Companies with the highest proportion of women on executive committees achieve ROEs 48 percent higher than companies with few or no women at the executive level.
When Millennials fill 30 percent or more leadership positions, companies are more likely to be in the top 20 percent of financial performers.
These stats make a compelling case for increasing the diversity of leadership benches. They also show that change isn’t happening fast enough. So, why do leadership pipelines continue to produce white male leaders nearly seven out of ten times? To find – and address – the cause, you must look beyond the numbers.
Broadening the leadership pipeline
The playing field across different constituencies starts out fairly level. But, as people progress through the management ranks, the proportion of women, women of color, and men of color who advance declines dramatically.
Much of the cause for the narrowing pipelines comes down to unconscious bias and “cloning” when making hiring, development, and promotion decisions. Today, many companies focus on diversity and inclusion education programs, which may include unconscious bias training. The main objective of these programs is increased awareness, which is important. But unconscious bias is hardwired, so it’s difficult to change behaviors based on education alone. Instead, change needs to happen at the individual level, which requires a personalized approach to development.
While a “personalized approach” can sound out of scope, most companies don’t need to reengineer their recruiting and talent management processes. Rather, incremental changes, including strategic use of evidence-based tools and the expansion of individualized coaching deeper within the organization, can produce a stronger, more diverse leadership bench in a scalable, sustainable way.
For more insights on how to address this challenge, I invite you to explore my new white paper and infographic, “Where are Tomorrow’s Leaders?,” which examine the diversity gap in more detail and outline five key steps to building a more diverse bench without reinventing the wheel.
Coaching Works NYC helps companies deliver coaching to more employees through a range of services, including Succession Management, Leader 360, and Coaching @ Scale programs, that give companies a practical way to reduce unconscious bias, enhance leadership development, and increase leadership diversity. Contact me to learn more.