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Diversity - a formula for success?

18/05/2021 2021/05

Diversity - a formula for success?

"Women are the better fund managers" - Perhaps you' ve read it. About four weeks ago, we received this message from all the news houses in the country. The background was a study by investment bank Goldman Sachs. The study revealed that funds managed exclusively by women had performed better in recent months than those managed by their male colleagues. The same was true for funds managed by mixed-gender management teams.

Do you also have the feeling that we have been reading such headlines more and more often lately? Women's quota, age discrimination, advancement opportunities. The list of buzzwords is long, and most of them deal with one and the same topic: participation issues. Especially for those who are currently still underrepresented in many positions. Or in short: diversity.

In general, diversity means nothing more than multiplicity. In terms of teams, departments and companies, it means that people are involved who have different characteristics and backgrounds. Be it gender, origin, educational background or age. But it is also about the values and attitudes that individuals represent and differences in the jobs they do. But why should this topic interest us at all? Let us look at some examples from the business world.

Small changes - big impact

You may have heard of the top US orchestras. Until the 1970s, they played almost exclusively with a male lineup, although women were also admitted. A circumstance that changed when the Boston Symphony Orchestra moved the applicants' auditions behind a curtain. The percentage of women rose from 5 to 40 percent. An eightfold increase in the number of women, through such a simple restructuring? You may now be wondering what kind of adjustment bolts exist in your company that could lead to such a major change.

And this leads us to the first aspect that makes diversity such a challenging topic: structures need to be rethought. It is not always just a simple curtain that increases the participation opportunities of certain groups. Sometimes operational processes have to be renewed from the bottom - application processes, for example. Countless studies have established, for one thing, that those who select applicants tend to choose exactly those that are most similar to them. This applies to recruitment procedures as well as internal selection processes, such as promotions in the case of departmental management departures.

A state of affairs that many companies in Germany have already recognised. In 2006, roughly 2,500 German companies joined together to form the so-called "Charter for Diversity". Its aim is to increase the opportunities for participation for all, regardless of personal characteristics. A survey revealed that two thirds of the companies see diversity as an opportunity, yet an equally large proportion do not yet engage in active diversity management. Not surprisingly, 95 percent of companies see women as the focus of this development.

This is due to several reasons. Last year, for example, the Credit Suisse Research Institute established that companies with an above-average proportion of women in management positions were able to achieve a significantly better share price performance than those with a below-average proportion of women. And yet only 55 out of 160 board members of listed German companies were women. In this context, the business magazine brand eins found out that of the 105 remaining companies, only 52 are willing to do anything about it by the end of next year.

We can all learn from people who think and act differently from ourselves.
Diversity means nothing other than variety.
Diversity means nothing other than variety.
The ARST Sales Team currently consists of 8 members.

Diversity in times of crisis

There has never been a better moment to promote greater diversity than today. In this time of the Covid 19 pandemic, many things are being questioned that have long been taken for granted by all of us. Products and processes are being rethought and internal structures are being revised. In many companies, every stone is currently being turned over in order to emerge from the crisis with renewed strength. A strong diversity management could help here.

Because heterogeneous teams are more successful. In 2018, the consulting firm McKinsey determined that companies that are characterised by an above-average degree of diversity have a particularly high probability of being above average successful. Once again, a special significance was found for women in senior management. But in other aspects, too, it pays off to focus on more diversity - especially in Germany. Here, the consulting firm was even able to ascertain twice as much influence in an international comparison. Diversity characteristics such as gender, ethnicity and educational or scientific background were examined. 

You see: The basis seems quite clear. Diversity is a success factor in every respect. Perhaps you have already noticed that yourself. In teams in which the individual participants are characterised by different attributes, people often think and act differently. You break out of established patterns of thinking and benefit from the views and ideas of others. It is no coincidence that many companies already rely on external support when developing products, be it in testing by customers or advice from other companies. The view from outside can help to uncover possible deficits and thus reveal optimisation potential. The same applies to work in teams. We are more successful the more different perspectives we incorporate into our work. This is not only about creativity, but also about the actual output.

Exploiting opportunities - minimising risks

But diversity not only holds opportunities, the risks must also be well managed. Naturally, different views also create a potential for conflict, which can lead to frictional losses. The key to success here is an open and transparent corporate culture in which different points of view are seen not as dangers but as opportunities. Issues such as feedback culture and trust are also crucial here. To make all this possible, we have to change.

This does not mean that funds will soon be managed only by women or that a curtain should be hung between those involved in job interviews. Rather, we should be aware that we can learn to think and act through people who are different from ourselves. This is a real recipe for success in a time of shortage of skilled labour and demographic change. And the best time to implement it is, as always: Right now.

About the Author
Nadia Döhler | Organisational & HR Consulting
Nadia Döhler
HR Consultant (HR Development)

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