The Diversity Challenge

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Last modified 10 August 2021
Categories: AIB Review
The Diversity Challenge

Vernice N. C. Phillip, MBA Graduate, Australian Institute of Business. 

Diversity in the workplace can provide an organization with access to a variety of perspectives if an inclusive environment is created that supports the expression of multiplicity of viewpoints. This article discusses styles of leadership that harness diversity rather than suppress it.

COVID-19 staff policies, performance management of physically distant employees, utilizing new technologies to communicate with staff, fully online recruitment and interviews, preparation of work from home guidelines. These are just some of a plethora of new issues that abruptly confronted managers with the onset of the COVID-19 pandemic. So why in this challenging scenario should emphasis be placed on the diversity challenge?

The answer: Attracting and retaining diverse talent has direct and measurable effects on the core objective of any business. Diversity supports increasing revenue, provides a competitive advantage and strengthens market growth. Across the globe, societies and organizations are growing increasingly diverse. At a time when many businesses are reeling from the financial impact of the pandemic it is even more vital to create a workplace that is supportive of persons of varied racial, ethnic, cultural, lifestyles, age, gender and religious backgrounds. That quality of diversity may hold the key to competitive advantage.

In a 2020 report encompassing 15 countries and more than 1,000 large companies Mc Kinsey found that companies that were ethnically, culturally and gender diverse consistently outperformed their peers financially. Similarly, the Innovation, Diversity and Market Growth report  found that when the membership of the organization matched the inherent diversity of the target consumer the team was able to achieve a better understanding of the clientele. This made innovation more likely in ways that the end-user found beneficial. Further, organizations that were more diverse at a senior management level were able to increase market share.

This speaks to the importance of recruiting a diverse workforce. Diversity in the workplace can provide an organization with access to a variety of perspectives if an inclusive environment is created that supports the expression of multiplicity of viewpoints. By extension, this can positively impact performance.

However, classic leadership theory seems to have been fairly silent on the issue of diversity, seeming as it often does to assume a heterogenous workforce. Nevertheless, leadership style can help unlock the potential of a diverse workforce. It is essential that leaders can motivate diverse workforces and create a shared vision. Classic tenets of leadership style can be harnessed to attract and retain a diverse employee base. Key leadership skills identified by Hughes such as ability to motivate, coaching, communication, conflict management, creating a compelling vision, creativity, and team building can be used to support diversity. These skills support collaboration among diverse teams.

In managing persons of varied backgrounds conflict is inevitable. Thus, conflict management skills are critical. The leaders’ ability to create a cohesive team to work together toward the organization’s goals is essential. It is paramount that the leader possesses a high level of emotional intelligence. This is required to enable the leader to reflect and become aware of his/her own bias and to develop cultural intelligence. A leader who is open to diverse opinions may create an environment that fosters innovation and creativity. Therefore, strategies such as team building workshops and diversity training may be beneficial.

Leaders can create a culture of inclusion by leading by example. This may include demonstration of care and concern for staff of minority groups or members of the LGBTQIA community. By practicing principles of fairness in distribution of rewards and discipline, regardless of individual ethnicity or lifestyle, leaders can set a standard of behaviour. Clear expectations for interpersonal behaviour, articulated by those in leadership positions can also support an inclusive climate.

Mentorship is also an effective tool for staff retention. One study found that lack of mentorship was a structural barrier to professional satisfaction Therefore, leaders should encourage and create opportunities for mentorship in the workplace. Informal staff occasions may create networking opportunities.

Creating an environment supportive of diversity in may require what is classically described as a transformational leadership style. According to Burns (1978), the transformational leader possesses superlative interpersonal skills and the capacity to appeal to followers’ value systems to create a shared vision that raises the standard of conduct. Communication is key. In our post- COVID society, transformational leadership may involve using language that would be welcoming to diverse recruits, creating a convivial environment for persons from varied backgrounds, being receptive to varied perspectives and providing equitable opportunities for mentorship and professional advancement.

A servant-based leadership style can contribute to an environment where women or ethnic minorities feel heard and valued in a way that can support retention. According to Spears (2016) servant leadership involves practices of listening, empathy, building community and awareness.

Many things have changed in our post-COVID landscape, but the crucial importance of leadership style remains. Employees are more diverse than ever, and managers must accommodate this in their strategies and style. Given the clear indications that diversity can strengthen competitive advantage, it is critical to adapt leadership style to support diversity in the workplace. Creating a positive working environment for all employees regardless of differences is key. Effective leadership skills and an appropriate leadership style can help overcome barriers to diversity.


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