The Benefits of Having a Diverse Skill-Set
November 2, 2022 – Regardless of industry, size, or goals, every organization will face its own set of ongoing challenges, from new competitors and market fluctuations, to media scrutiny, to evolving technologies. A leadership team and board that embraces a diverse combination of skill-sets and perspectives is better equipped to navigate challenges as they arise.
A recent analysis by BoardEx explores the benefits of having executives and board members with diverse experiences and backgrounds. The study examines how some S&P 500 companies diversify their boards, and best practices for identifying new talent to help steer your organization. “Having a diversity of experience within a leadership team—both in terms of skill-sets and demographics—helps organizations remain agile, innovative, and better at navigating risk management,” the BoardEx report said.
A 12-year-long study conducted by AXA IM Rosenberg Equities found that U.S. companies with greater than 20 percent gender diversity on their boards have higher profitability in the future compared to organizations with lower diversity. The same study discovered that gender balance can also protect businesses from competitive pressures.
The BoardEx report notes that two factors may account for these findings: Not only do female board members bring a unique perspective by virtue of their identity, but they also have diverse professional experience, in part due to social trends. A study by Russell Reynolds Associates analyzed women directors at Fortune 250 companies and found they came from a wide array of sectors. The directors were almost evenly split between those with corporate experience and those who came from government, non-profit, or other sectors. This is likely because in the past it was easier for women to access leadership positions in non-corporate sectors, as for-profit corporations have historically been slower to promote women to C-suite roles.
The BoardEx report explains that these varied backgrounds play a valuable role in the success of an organization. The same study demonstrated that a board with diverse perspectives and experiences is more effective at anticipating and minimizing risk. “Diverse skill-sets also help an organization spot and capitalize on opportunities that a more homogenous board might miss out on,” the BoardEx report said. “Recent trends in hiring show that companies are aware of these benefits and are actively building more diverse leadership teams.”
How to Develop a Leadership Team with Diverse Experience
Whether you’re hiring C-suite executives or nominating new members to a board, it’s critical to have access to a solution that lets you quickly identify talent with diverse backgrounds. BoardEx Discovery allows you to quickly access and understand the diverse experience of an organization’s board and where there might be gaps or risks.
1. Determine Key Competencies
BoardEx says that to plan for the challenges your company is likely to face, you should aim to nominate board members whose expertise offers unparalleled insight. Often, this may be a niche issue that requires collaborators with very specific knowledge, connections, or skill-sets. Delta, for example, operates in a highly regulated industry, so finding board members that can navigate the market and have connections to regulators is likely a priority when making board appointments. Francis Blake worked in the U.S. Environmental Protection Agency, Michael Huerta worked at the U.S. Federal Aviation Administration, and Ashton Carter was the U.S. Secretary of Defense during the Obama administration.
2. Consider Demographics and Personal Attributes
Russell Reynolds Associates, the same organization that studied women directors at Fortune 250 companies, encourages a holistic approach to nominating new leadership. In addition to noting a candidate’s functional experience, consider their demographic and personal attributes. When contributing to conversations and projects, individuals draw upon all three areas to inform their perspectives.
3. Identify Gaps
The BoardEx report notes that while you might know where you want your company to go, you should consider whether you have the leaders on board who can take you there. Assess your existing leadership team to determine which types of functional experience or backgrounds you still need to round out your board or C-suite.
4. Decide on Networking Needs
“One of the benefits of adding new leaders to your organization is that they bring along their professional networks,” said the BoardEx report. “Before starting your search, determine how important it is for you to understand the size and quality of their network.”
5. Find Up and Coming Talent
The best nominee for your leadership team doesn’t necessarily have to come from an executive position. Sometimes, people in vice-director roles are ready to take on bigger challenges while bringing more diverse perspectives. As countries, regions, and indexes roll out new laws requiring more women in leadership positions, searching for untapped talent from below the C-suite is more crucial than ever.
Talent Experts Weigh In
According to Dominic Lévesque, president of Tatum, some top skills for today’s leadership teams are curiosity, empathy, resilience, humility, and courage. “These things may have become buzzwords in the business world, but they’re also qualities that are absolutely on display at top leadership teams today,” he said. “After all, it takes humility to sidestep instinctive defensive reactions. It takes courage to confront one’s own unconscious biases and acknowledge mistakes. And perhaps most fundamentally, it takes dialogue to successfully implement equity, diversity, inclusion, and accessibility initiatives today. Why? Because dialogue is essential if you hope to overcome structural obstacles like the “frozen middle,” for example, which occurs when equity, diversity, inclusion, and accessibility goals are clearly understood at the top of the organization, but not so much among middle management, resulting in bottlenecked action plans.”
Mr. Lévesque notes that some of this information probably can’t be taught. “Highly inclusive leaders often exhibit a rare ability to ‘personalize’ individuals — to recognize and value the uniqueness of other people and their experiences, while also making them feel welcome and accepted as part of the group,” he said. “But a lot of it can, which is why leadership teams should be focused on tactics and actions, from mentorship or sponsorship programs specifically targeting equity, diversity, inclusion, and accessibility to mandatory unconscious bias training and more.”
“Finally, there are also methodologies like reflective structured dialogue that leadership teams can deploy to help team members engage in meaningful dialogue about issues that matter deeply to them — and do so in a way that reinforces, rather than undermines, productive working relationships,” Mr. Lévesque said. “For a lot of companies, the focus is now on developing the right long-term strategy, one which strategically balances the risks and reward of build versus buy. Obviously, this is where executive search partners can step onto the stage. As long as equity, diversity, inclusion, and accessibility strategies are viewed as longitudinal commitments, connected to business outcomes and backed by appropriate levels of investment, we’re going to have a vitally important role to play.”
“Having leaders within the organization coming from different perspectives that don’t come from the same background or have had the same experiences in life are going to make a more significant impact,” said Marion Spears Karr, managing director and leader of its healthcare and life sciences practice at Comhar Partners. “When your leadership team reflects what that looks like, you have a higher probability of the followers being more engaged, supportive, and involved. It is essential because, as a world, we need to embrace other people’s differences. We must avoid being completely solid that we don’t have that level of engagement within the companies we lead.”
“The first skill needed today is to be able to identify the value of different thoughts and to step back and say that you may not have all of the answers as a leader,” said Mr. Spears Karr. “I can learn from the people I intend to lead and from my peers and others. That level of discernment around your leadership skill-set is critical today. Another valuable skill is the ability to communicate effectively. The best leaders of today are the ones that communicate a clear message and demonstrate that they listen. The third piece is being efficient in how we go about leading our organizations. Being efficient is essential not to waste people’s time and focus on what matters.”
It depends on the role that the recruiter is trying to fill, according to Mr. Spears Karr. “Understanding the accomplishments and the impact of those accomplishments on the mission of the organizations they have been with before—in other words, being aware of the value of what they bring to the table and why it matters,” he said. “That supersedes skill-sets, backgrounds, and qualities. It’s the ability to translate what they’ve done into why it matters. Those are the candidates that stand out. Those candidates understand their value and the potential impact they will have on the new employer.”
There are a multitude of benefits to having a diverse leadership team, all that have been discussed and shared at length, says Kelli Vukelic, CEO of N2Growth. “With that said, the highlights are enhanced creativity and driving new solutions and ideas, all of which lead to a more innovative, forward leaning organization,” she said. “This is most beneficial in problem-solving scenarios and in meeting new challenges, the daily description for the ‘day-in-the-life’ of a CEO. For many CEOs it is also important to have a leadership team that reflects the diverse markets and cultures that organizations operate in.”
“Organizations today are fighting for growth and survival at the same time,” said Ms. Vukelic. “Recruiters have to build a case for their candidates in a way we never did before, and we have to align it to the organization’s goals. We must be the translator for our clients to understand how talent will support and deliver their strategy. We have to link business strategy with talent, and intimately know the past outcomes driven by candidates if we dare to claim that they will increase performance. In addition to skills and past experiences that drove successful outcomes, recruiters are also looking for candidates who can add to their client’s culture, the element that is likely at the center of a CEO’s business strategy.”
“Finally, recruiters are also looking for candidates with the potential to grow and develop over time,” Ms. Vukelic said. “While skills and experience are important, they can only take a candidate so far. Today’s business landscape is constantly shifting, which means that the skills and experience that deliver value today may need to change over time. It is also important for candidates to have a degree of grit and learning agility. This often is a result of professional and personal curiosity, as well as a willingness to embrace new challenges, allowing them to be successful no matter what changes come their way.”
Regardless of the industry sector in the business landscape, it has increasingly become more essential to have diversity with leadership teams, according to said Pamela Ruebusch, founder of TSI Group. She said that there are “multiple positive impacts of focusing on achieving diversity from the top down, but three good reasons to get on board are the following: First, with diverse thought at the leadership table, there is diverse thinking with decision making. It’s like bringing ‘whole brain thinking’ into the room,” she said. “Traditionally leadership teams have had too much of ‘the same’ thinking when there is little diversity. That is why it is important to assess your leadership team in order to determine the type of leaders you have, and when adding or replacing, the type of leaders you need to complete the wheel of knowledge, creativity, and innovation. Second, when you have diversity with your leadership, you create a culture of acceptance or awareness that there is not just ‘one way’ to achieve success. Third, once you get on board with diversity, the message to the company employees is positive.”
“One of the most important skills of a good leadership team is ‘good listening’ abilities,” said Ms. Ruebusch. “Too often those sitting in the leadership seats want to get their agenda across which can sometimes be self-serving. Leadership teams that are open minded, collaborative and supportive tend to find the best overall outcomes for the business. If a leadership team is tenured and someone new comes in, it can lead to the ‘us’ and ‘them scenario. Strong leaders are always looking for ‘what they don’t know’ in order to gain knowledge, wisdom and ultimately make better sound decisions.”
When it comes to recruiting top talent for senior mandates, Ms. Ruebusch says that it is clear that having someone with the ability to look ‘in’ the business as well as ‘on’ the business and knowing the importance of how to navigate with these two attributes is key. “More and more, our clients are less concerned about the industry alignment and more interested in the overall business acumen,” she said. “Whether you are a sales driven leader, a finance leader or an operations driven leader, once you are in the C suite, leadership is about listening, maneuvering the right way with your team in order to deliver the overall outcomes. What is key when searching for the ideal short list of candidates, is to ensure the role is well aligned with the person as well as the firm, and that those hiring are on the same page.”
Diversity in leadership is critical. Introducing different perspectives is the best way to promote new ways of thinking, according to Carmen Scanlon, VP of client solutions at WilsonHCG. “Additionally, creating a diverse leadership team will increase innovation within an organization and positively impact top-line revenue,” she said. “Diversity, equity, inclusion, and belonging (DEIB) is also a key driver for today’s candidates and employees alike. People want to work for diverse organizations, and when candidates see diverse leaders, they know that companies take diversity seriously.”
“Today’s leaders need to be effective and transparent communicators as they interact with a wide range of stakeholders on a daily basis,” said Ms. Scanlon. “Customizing this message in alignment with those stakeholders’ individual priorities is also extremely valuable. Emotional intelligence is another essential trait that today’s leaders must possess. The ability to have empathy and understand how others feel is essential. The importance of this was heightened during the pandemic when employees looked up to their leaders for advice on how to deal with an unprecedented event.”
“Lastly, agility is key, especially in today’s fast-moving business landscape,” she said. “Leaders must be able to pivot and make decisions quickly. They must influence key stakeholders that the ability to change (and take risks) is a necessity in business today.”
Ms. Scanlon notes that recruiters want candidates from diverse backgrounds. “After all, diversity breeds innovation and brings new perspectives to the team,” she said. “Soft skills are arguably more important than hard skills and therefore, should be prioritized when seeking candidates. Someone with the right soft skills can be taught the hard skills required, in most cases.”
“Having a diverse leadership team is critical in today’s market because societally and from a business standpoint it has become the foundation of corporation’s future,” said Smooch Repovich Rosenberg, founder and CEO of SmoochUnplugged. “DE&I needs to be coupled with diversity of both experiences and intellectual perspective in order for boards and leadership teams to arrive at the most effective solutions for both their businesses, employees and, frankly, customers.”
“The modern leadership team will always embody the ability to navigate as a team of corporate athletes whose individual diversity of experience, wedded with the overall collective intellectual diversity of the management team, will allow for consistent best practices to always be pursued, developed, and implemented,” Ms. Repovich Rosenberg said. “In addition, the ability for colleagues to be allowed the freedom and respect to have a viewpoint and opinion which is a direct result of their expertise in a particular subject matter.”
“I am always seeking talent who is battle-tested, meaning an executive has not only been successful in good times, but they have navigated rough times and their wisdom and advice has led their employers to successful outcomes in their businesses,” said Ms. Repovich Rosenberg. “Wisdom comes directly from experiencing tough situations and having to define success that will move a company forward to positive results.”
“From any angle you look at it, diversity – especially at the top levels of an organization – is a win,” said Ruben Moreno, founding partner and HR practice lead for Blue Rock Search. “Positive movement on DEI has a positive impact on business outcomes, from recruiting top talent to increasing profits. Besides all of the financial and practical motivations, having a diverse leadership team is simply the right thing to do. And without that kind of diversity modeled at the highest levels, top-tier candidates at any level may look at the company and feel that there is no room for them to advance, or that the organization isn’t interested in making room for them at the top. It is absolutely essential for any company looking to grow and succeed in today’s world to walk the walk when it comes to DEI, and that means ensuring that those values are reflected all the way up to senior leadership.”
“Today’s leadership teams face a number of challenges, from organizational culture to a tight labor market to economic challenges and more,” Mr. Moreno said. “The best leaders to take the reins in moments like these are leaders who are flexible, creative, and attentive to the shifting needs of the organization and its people. Leading with compassion, clarity, and level-headedness is crucial, as is the ability to adapt as the situation warrants.”
There can be a temptation, especially during challenging times, to look for leaders who offer sprawling, transformative visions of the future, according to Mr. Moreno. “Transformative thinking isn’t a bad thing at all – it’s necessary for continued improvement and growth,” he said. “But that kind of big-picture thinking alone does not make for a truly excellent leader. Today’s leadership teams need to be skilled in balancing the immediate demands with a long-term plan, all while being excellent communicators to ensure that everyone in the organization, at every level, understands what’s happening and is able to stick together. Holding a team together is crucial, especially in a world where the majority of workers admit they’re open to leaving their current organizations.”
“Right now, recruiters are looking for candidates who have the skills and experience necessary to lead through challenges while also looking to the future,” said Mr. Moreno. “It’s not necessarily a question so much of how many years do they have or what titles have they held, but more about what they uniquely bring to the table and what their leadership would look like, in context of what organizations are looking for today.”
“That means that resilience, flexibility, and creativity are critical in leadership searches today,” Mr. Moreno said. “We’re seeing recruiters and organizations look for thinkers who can help find new paths forward but who are also make it happen people, not just big dreamers. It’s not just about finding people with leadership experience – it’s about finding candidates with experience leading in ways that really make a difference.”
The most obvious benefit is that diverse teams bring diversity in perspective, which leads to better problem-solving and increased creativity, according to Alex Verdecchia, principal at McDermott + Bull. “Unique perspectives also drive innovative thinking,” he said. “You stand a much better chance of coming up with an out-of-the-box idea when the individuals contributing to the formation of this idea have different world views and experiences.”
“In a competitive job market, diverse leadership teams aid retention,” Mr. Verdecchia said. “When diverse associates see others who look like them working on the senior leadership team, it shows them that their company is accepting of other cultures and backgrounds. In essence, representation matters. Employees who see this are more likely to feel that there is a professional future for them at their companies and, therefore, less likely to consider roles elsewhere.”
“Today’s leadership teams need to be innovative,” he said. “The problems we’re facing, whether societal or environmental, are going to require cutting-edge solutions. Today’s leadership teams also need to be nimble. The organizations that survived or thrived during the COVID-19 pandemic were those that adjusted to their new realities quickly. Finally, I think today’s leadership teams need to be compassionate. Companies that care about peoples’ well-being, inside or outside of the workplace, create stronger and more fulfilling connections between leaders and employees, producing a greater sense of trust and belonging as well as a more stable working environment.”
Mr. Verdecchia also notes that the workforce is changing. For every one Baby Boomer that retires, 0.7 of a person enters the workforce. “From an experience perspective, an average Baby Boomer has 40 to 45 years of work experience, whereas the 0.7 person coming in has none,” he said. “The workforce is shrinking, and we’re losing talent at an unprecedented rate. Workforce and succession planning is more critical than ever, and the candidates we look for are those who showcase that they can grow into larger roles because of their initiative and desire for lifelong learning. There’s less focus on a candidate’s years of professional experience and more on their potential – the up-and-comer. Of course, we’re also seeking candidates with diverse backgrounds and experience to step into these leadership roles.”
“Diversity of all kinds – racial, gender, cultural, philosophical, religious, experience, natural strengths, and other – provides a leadership team with a variety of lived experiences and viewpoints,” said Sally Bryant, president and CEO of Bryant Group. “It is then important for the team to share a common set of aligned values from which everyone operates, so that opinions and ideas are shared openly with respect and can be measured against the organization’s core values as well as vision and mission. This allows for the most robust and effective decision-making by the leader.”
“We tend to think in terms of experience and expertise: legal, financial, logistics, marketing, sales and the like,” said Ms. Bryant. “These are important, of course. But I believe we need a category for the person who understands people. Not only is this a category of expertise, but one that the whole leadership team must be curious about and working on for the greatest success of the organization. Today’s leadership teams benefit greatly from learning about their own and others’ personality types and the why behind the personality. Why does someone work the way they do? What are their motivators that may be different from my own? How can we understand each other better for greater respect and a more effective and enjoyable relationship?”
“We use both DiSC and the Habit Finder assessment to help understand how leaders understand how they think, how they act and react, and how that might affect others,” she said. “We also help them understand others and how they can elevate communication to create stronger partnerships.”
What types of backgrounds are recruiters looking for in candidates today? Ms. Bryant’s answer is someone with high EQ. Someone who is authentic and transparent and is confident in that authenticity and transparency. “Leaders who instead build a façade of perfection tend to create distrust and distance between themselves and their teams,” she said. “We also look for people who understand how to care for their team members with empathy and respect. Empathy means caring about team members’ lives and challenges; respect for the person and the organization means holding people accountable for their professional responsibilities. We find it is the rare leader who understands how to create that balanced environment.”
“Diversity starts at the top, the primary benefit to having a diverse leadership team is representation,” said Deborah Page, VP at The McCormick Group. “Emerging leaders and top performers want to see themselves reflected throughout the organization and at the top. Diversity brings a wealth of knowledge, different perspectives and is key to building trust in your organization. When looking to grow and retain top talent, the ability to promote an inclusive culture is paramount. A diverse and inclusive workplace is one that makes everyone, regardless of who they are or what they do for the business, feel equally engaged and supported.”
“If an organization is looking to be more intentional about building and supporting a diverse culture, they need to prioritize diversity, equity, inclusion and belonging from the top down,” said Ms. Page. “A diverse leadership team is instrumental in building trust throughout your organization. It improves employee retention, fosters innovation, collaboration and studies have shown that equitable and diverse employers outpace their competitors. By having diverse leadership, a company can help bridge the gap between the employee and the executive team, creating a culture of greater understanding that encourages new ideas and ways of the thinking. Employees are also more likely to seek out advice and assistance from leaders who share similar backgrounds.”
Leadership teams need to be adaptable, agile and innovative, said Ms. Page. “The ability to navigate change is always a desired trait. Good leaders need to have the flexibility to help their organization and team mindfully navigate what lies ahead and be able to maintain productivity during transitions and periods of chaos,” she said. “Leadership positions have always relied heavily on organizational skills. While organizational skills are still important, creativity is now a much sought-after skill. The ability to turn new and imaginative ideas into reality inspires teamwork and collaboration.”
So much has changed in the past 10 years, according to Ms. Page. “Organizations are no longer just looking for traditional managerial leadership skills and capabilities,” she said. “Today, organizations are looking for people with softer skills. The ability to be socially aware, recognize strengths and weaknesses and to be empathetic are key to building a strong workforce. Leaders must be able to coach teams, manage stress, provide feedback and collaborate at all levels. Another area we are asked to probe is a candidate’s ability to identify opportunities for change and then lead their organization to achieve goals and objectives. Individuals who demonstrate a proven success in their respective fields are highly sought after.”
Related: Hiring Top Talent in Unprecedented Times
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media
