How to Move the Diversity Needle in Corporate Leadership

Despite decades of claims and resolutions by American corporations, little progress has been made in achieving diversity in leadership roles. Perhaps the many assumptions about women and minority groups are to blame: that they lack leadership qualities, are not ready for management, or there are just not enough qualified candidates to select from. These assumptions cloud the action needed to move the diversity needle in leadership in corporate America.

My team and I undertook research to discover some of the causes of this lack of diversity.  Our conclusions can be found in our report Repairing the Broken Rung: Overcoming Bias in the Leadership Pipeline.  Based on data collected from 328 managers and 129 organizations that together employ more than 500,000 people, we found that unconscious bias against women and minorities creates a self-perpetuating cycle when it comes to who is promoted. Here’s how it works: White men hold more managerial positions, managers make nomination decisions about who has high potential, men hold more positive assumptions (biases) towards other White men when evaluating leadership potential, high-potential employees get access to more developmental resources, as a result, more men are promoted and so more men end up in management roles.

The implication of our findings is clear: organizations must expand their efforts to tackle bias in talent decision-making to include the identification and development of future leaders. While decisions about the next generation of leaders go unchecked, companies leave potentially more capable talent on the table.

Many organizations have focused on tackling unconscious bias and discrimination in hiring decisions. But as the war for talent has forced organizations to grow future leaders from within, now is the time to start combating bias and discrimination in post-hire talent decisions, such as identification of high-potential employees and succession planning. This will ensure that women and minority groups can equally benefit from the special training and resources only reserved for high- potential employees and successors, and consequently be given an equal chance to compete for a promotion.

What can be done

We have identified five steps that organizations can take to ensure fairness in the selection and development of future leaders. Start with obtaining data about your current practices and understand if you’re at risk for unintentional discrimination. Roll out bias training across the organization but understand that it is only meant to increase awareness of the issue but not solve it – you cannot train bias out of people. Apply rigor to your existing processes for identifying future leaders; review and improve the practices that are in place as well as how they are executed. Formulate a set of criteria that have been scientifically validated to predict success in leadership roles and insist that managers use these during the nomination process. Introduce blind auditions to provide managers with more objective data about employees’ readiness and potential.

We recommend a five-step solution for breaking this cycle that includes:

1. Get the data

Start by obtaining data about your current practices for identifying high-potential employees, emerging leaders, and succession pools. Monitor the balance in these programs with the same rigor you apply to hiring decisions. Calculate adverse impact against any protected group periodically, after talent review cycles or managerial ratings. Review industry trends and best practices as well as legal cases to ensure that you are aware of risks and trends in this space.

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2. Roll out bias training for all

Bias training is a good starting point, but understand that it is meant to increase awareness of the issue, not solve it – you can’t train bias out of people. All humans use biases to save time and energy when making decisions. Training can increase awareness of what biases exist, how they can affect organizational decision making, and where to look for them in talent reviews, high-potential selection, and succession decisions. Because most people are reluctant to see their own biases, use data from your organization as evidence that even your managers show bias.

3. Turn up the rigor

Apply rigor to your existing processes for identifying high-potential employees and successors across the entire leadership pipeline, from frontline managers all the way to senior executive roles. Examine not just how those decisions are made, but exactly how the processes are executed: Do managers write down names and submit them in a sealed envelope? Or is there a transparent assessment in place? Are nomination criteria clearly defined? Do you have a validated list of the characteristics and attributes needed for employees to access high-potential programs?

4. Identify selection criteria

Formulate the criteria for high-potential and successor selection based on science, and insist that managers use these during the nomination process. What characteristics best predict success in leadership roles at your company? Educate managers on the criteria and what potential performance looks like for future leaders. Use the criteria in the nomination and selection process, and ask managers to provide evidence that their candidates meet the criteria. Communicate the criteria to all employees to reinforce a culture of fair and consistent standards in selection to high-potential programs and succession plans.

5. Introduce blind auditions

Help managers make better decisions by giving them more objective data about employees’ readiness and future potential. Similar to our case study, you can set up a simulation of a leadership role and invite trained assessors who have no prior relationship with the candidates to observe their performance. Seeing all employees in the same standardized situation and using a validated set of criteria, you will arrive at a more objective evaluation of their leadership potential and readiness.

Martin Lanik is the lead author of Repairing the Broken Rung: Overcoming Bias in the Leadership Pipeline as well as the author of the bestseller The Leader Habit.  He serves as CEO of Pinsight, a Denver-based consulting firm that helps companies bring fairness to leader selection, development, and succession.

For more information, visit: www.pinsight.com or www.repairtherung.com.

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