Four Ways to Use Diversity to Save Your Company
The companies that address gender equality head-on are also generally the most innovative, fast-growing, and enduring
Growth is a challenge for Asian businesses in 2020 more than ever. That makes it inexplicable that three out of five companies are overlooking the opportunity to potentially add double-digit growth to their innovation revenue by embracing gender diversity.
Naysayers are wrong. Diversity does, indeed, have a measurable impact on performance.
The companies that address gender equality head-on are also generally the most innovative, fast-growing, and enduring. The study I mentioned above that found most companies are not diverse is from the Harvard Business Review. It found that companies with above-average diversity have 19% points higher innovation revenue and 9% points higher EBIT margins. Nine points of EBIT is a significant dividend for doing the right thing.
STOP EXCLUDING HALF OF THE BEST MINDS
This is finally the time for tech companies to tackle the lack of gender diversity in their organizations. (Exclusion and inequality are not limited to gender, but gender is what I will focus on here.)
While I am writing for Asian readers, I don't mean to criticize Asian companies above those of other regions. Asian companies are not necessarily worse performers in terms of diversity.
Progress has been slow, but in 2020 it seems that --finally-- equity, inclusion, and diversity have made it to the top of the list for business leaders and entrepreneurs across APAC.
Vietnam is the Asian leader in gender diversity. Female workforce participation rates there are 48%, which is higher than the global average of 39%. Women fill 22% of senior leadership roles, they hold 25% of CEO and board-level positions, and they own 30% of enterprises at the most recent count. In the rest of Southeast Asia, women occupy only 12% of CEO and board-level positions.
The Group CEO of one of Asia's leading banks, Bill Winters of Standard Chartered, put it well earlier this year.
"We're in a war for customers," he said, "a war for service, a war for talent all the time. How could we possibly expect to win if we're limiting our pool of talent to half the population?"
People who believe women are not capable of the highest levels of performance in the tech industry are ignorant of the facts. They don't know that it was, in fact, a handful of women in 1940s America —not men— who invented software and became the world's first programmers.
At the time, the men in charge of things valued hardware above all. (The same thinking in 1980 led IBM to disastrously permit young Bill Gates and Paul Allen of Microsoft to license their PC operating system to other computer manufacturers.)
Admiral Grace Murray Hopper, a woman, invented the first computer language compiler. Hopper's leadership led to the development of COBOL, which was the first common business language for computers and is still in use. Her pioneering work made possible the entire tech industry of today.
Despite their early pioneering work, women were squeezed out of the technology industry by restrictive social norms. A 2019 study found that women at American tech firms earn 28% less than men. There is reason to believe the situation is even worse in most of Asia. The average gender gap is 34.2% in South Asia and 31.7% in East Asia. China, Japan, and South Korea are the East Asian countries with the broadest gender gaps.
When you look at the critical skills of the future, the gap is even worse. Only about one out of five global AI professionals are female.
Invite both genders to participate equally in your leadership team and your workforce. You will not only rectify this record of exclusion but also avail yourself to half of the best minds available for any given role. You will compound your advantage because many other corporate leaders still prefer to ignore this immensely deep talent pool.
At Juwai IQI, we have gone some way towards creating a diverse workforce and leadership. Our staff is 77% female, with no difference in remuneration between the genders.
Our most recent CEO is a woman. Bloomberg's 2020 Gender Equality Index, which tracks many Asian companies, found that companies led by a female CEO have more women in the top 10% of compensation than male-led firms and more women in revenue-producing roles.
THE GENDER DIVERSITY ROAD MAP
We are proud of the progress we have made, although we still no doubt have much to do. What advice can I give to other business leaders?
No magic button will transform an insufficiently diverse business into its opposite. For most companies, the change will take a cultural shift, the sustained focus of the leadership, and committed implementation.
Experts suggest the following four steps are a good starting point for most businesses.
Make a business case for diversity. For diversity to stick, leaders and staff need to understand the payoffs. Emphasize the benefits it will bring, including human resources cost reductions, a more productive workforce, and reputational gains.
Understand your starting point. There are vast differences between technology companies and societies across APAC. Gather data and insights from across your organization, so you understand where the challenges lie. With this context, you can establish the policies and goals that will lead you into a more successful and diverse future.
Create your roadmap. Someone once said, "If you don't know where you're going, you'll end up someplace else." Your diversity strategy should assign responsibilities to specific team members and include metrics to measure progress.
Stay focused. Even the best-designed diversity strategy will face challenges during implementation. Changing company culture can be like driving uphill. The moment you take your foot off the accelerator, you begin rolling backwards.
Please do not let the challenge of implementing such a far-reaching change in your workplace scare you. Every positive step will take you closer to your destination. You will be rewarded both in terms of personal fulfilment and financial success.