Should business leaders insist on ‘inclusion riders’?

Frances McDormand called for ‘inclusion riders’ to become a feature of Hollywood business deals at the Oscars earlier this month. When prominent leaders speak up for diversity and become active role models, everybody benefits, says Dr Simon Hayward of Cirrus.

Accepting the Oscar for best actress last Sunday, Frances McDormand finished her speech with the call-out, “I have two words for you: inclusion rider.”

An ‘inclusion rider’ is a clause that an actor can include in a contract which demands a certain level of diversity among cast and crew.

The concept was first introduced by Stacy Smith, founder of the Annenberg Inclusion Initiative at the University of Southern California, in a 2016 TED Talk.

McDormand clearly sees an opportunity for more power players in the industry to take practical steps towards a more diverse culture.

In the wider world of business, we have seen many diversity initiatives such as quotas to address the gender imbalance across corporate boards.

Alongside this, it is helpful when leaders speak out about the importance of diversity and encourage practical steps, just as McDormand did on the Oscars platform.

Global mindset

An open commitment to diversity from senior leaders would help organisations to move from box-ticking to embracing difference in its many forms: gender, race, sexuality, culture, nationality, age, educational and social background, and beyond.

In our age of connectivity, there is great value in developing a global mindset and cross-cultural understanding.

There is now a great deal of research to demonstrate a strong correlation between gender, racial and ethnic diversity in leadership teams and above-average financial performance.

At the other end of the scale, a lack of diversity correlates with below-average performance.

In this fast-moving world, we are faced with many different opportunities and challenges every day. The way teams interact has become a business-critical issue.

To address this, we need diverse teams who can share a range of experience. This variety encourages deeper collaboration, which generally leads to more effective solutions.

As a leader, you can be the role model for this by ensuring your team is both diverse and collaborative. This in turn creates opportunities for collaboration with other teams and organisations where you can create more value by working together.

Role models

Researching my next book, The Agile Leader, I spoke to many CEOs from a wide range of organisations. I was impressed by the importance that leaders from some of the most innovative businesses place on diversity. They see it as good business sense in a world that is changing at a rapid pace.

Many of the CEOs I spoke to ensure that their own leadership teams are diverse, and take their responsibility as role models very seriously. Ultimately, they are focused on delivering results, and they value the importance of diversity in achieving this.

One CEO commented: “If we tried to do what we’re doing with a single experience set, we would fail. Diverse teams can share varied perspectives. Together we look at things from different angles. It becomes a collective, which makes it easier to cope with uncertainty and to find better solutions.”

Diverse, multi-skilled, multi-experienced teams are typically more able to address difficult challenges in the pursuit of improvement. In short, they make smarter decisions.

This helps to ensure that organisations prioritise what is most important. Greater collaboration also helps to create more connected organisations, able to adapt quickly and with confidence.

Diversity can also boost innovation, which is a top priority for today’s organisations. Through innovation, we create new value for customers through significantly adapting existing products and services or creating new ones that either revolutionise or disrupt existing markets.

Diversity and innovation

A study from the US Center for Talent Innovation has also found strong links between diversity, innovation and market growth.

The research identified a “diversity dividend” that inclusive leadership reaps from a diverse workforce: increased market share and a competitive edge.

Another interesting finding was that diverse leadership teams tend to encourage a “speak-up culture” which leads to valuable insights that meet the needs of under-served demographics – yet another thing which is linked to bottom-line benefits.

Stacy Smith, the originator of the “inclusion rider”, has said its real goal is to counter bias in the auditioning and casting process. Similar initiatives can help us to recruit, retain and promote a more representative group of employees across organisations.

Alongside these initiatives, the wider world of business can benefit from powerful role models like McDormand who speak up for diversity and insist that it becomes integral to working life.

While the financial benefits are compelling, it’s also worth remembering that more diverse and inclusive workplaces can contribute to more meaningful work – which is good news for everyone.