Boardroom Diversity is Still Only Skin Deep

Last Updated Nov 18, 2008 9:14 AM EST

Companies are very good at diversity, if you believe their annual reports. On the cover there are likely to be photographs of a melting pot of races, religions, minorities and at least two genders.

This diversity will then give way to reality inside the report which will feature paeans to the chairman, chief executive and senior officers who all look suspiciously as if they share the same race, age, religion, gender and golf club.

Women are allowed into the boardroom -- either to serve tea and clean up, or to be a harmless non-executive who helps bolster the flagging diversity credentials of the company at senior levels.

But the real diversity problem is not the one that politicians worry about. The real diversity problem for many businesses is deeper and more dangerous. Even organisations that do quite well at superficial diversity fail the business diversity test.

Many companies pride themselves, like McKinsey, on being a "one firm firm". They celebrate their strong and cohesive structure which enables them to act as a truly global firm. No-one will mistake a McDonald's, Disney or Starbucks for anything else, wherever it may be in the world.

The implication of a uniform, global culture is simple: we don't care what race, religion, age or gender you may be as long as you sign up to our corporate culture, our way of doing things and our way of thinking. In diversity terms, that really sucks.

The reality is that most organisations value intimacy over diversity. A homogenous culture makes it much easier to communicate, understand each other, make decisions quickly and to transport ideas around the world.

The downside is that such uniform cultures are not much good at innovation. The established status quo is preferable to the risk of the unknown.

So, as long as the world does not change much, these uniform cultures can survive. Unfortunately, the world has a habit of changing. In the last 25 years 75 per cent of the members of the Fortune 100 and the FTSE 100 (top UK companies) have either been overtaken or taken over.

This is an abysmal survival rate for the greatest businesses on the planet. It indicates that not many of them are much good at adapting to a changing world.

A bit more diversity and a bit less uniformity is not about keeping regulators happy. It is about finding the capacity to change and to survive.

  • Jo Owen

    Jo Owen practises what he preaches as a leader. He has worked with over 100 of the best, and a couple of the worst, organisations in the world, has built a business in Japan; started a bank (now HBOS business banking); was a partner at Accenture and brand manager at P&G. He is a serial entrepreneur whose start-ups include top 10 graduate recruiter Teach First and Start Up, which has helped over 250 ex-offenders start their own businesses. He has and has spent seven years researching leadership, strategy and organisation in tribal societies. His books include "Tribal Business School", "How to Lead and How to Manage." He is in demand as a speaker and coach on leadership and change. His websites include Tribal Business School and Leadership Partnership