Much recent attention has been given to the need for more inclusive leadership at the political level in Australia. But do organisations understand the benefits of having inclusive leaders, especially as workplaces become more diverse?
International research clearly shows that organisations need to cultivate an inclusive workplace in order to experience the benefits of diversity. However, Diversity Council Australia (DCA) has found there is room to improve the inclusive leadership capabilities of Australian managers. Through interviews and a review of national and international research, DCA’s new study, Building Inclusion: An Evidence-Based Model of Inclusive Leadership, sheds valuable light on the need for inclusive leadership and what it takes build more inclusive leaders.
Key findings include:
Leaders are critical to the success of D&I initiatives but there is a lack of inclusive leadership capabilities amongst Australian managers:
- Interviewees rated the current level of inclusive leadership capability of senior leaders in their organisation relatively low. The average score out of ten was 5.8 with 26% rating it as either 5 or 6; and 17% rating it as being below 5.
- Earlier DCA research found only 11% of Australian workers strongly agree that their manager actively seeks out information and new ideas from all employees to guide their decision making – a key capability of inclusive leaders.[i] And Australian workers from culturally diverse backgrounds are up to three times less likely to experience their workplaces as inclusive.[ii]
This means organisations are missing out on the benefits of inclusive leadership:
- Profit & performance. Inclusive environments are associated with improved job and/or team performance, as well as higher return on income and productivity.
- Innovation. Teams with inclusive climates have higher levels of innovation and profit. Having a flexible rather than fixed view of one’s own and other’s identities – a key attribute of inclusive leadership – is associated with greater creativity and improved innovation.
- Engagement & opportunity. Inclusive leadership is associated with greater team engagement, while individuals working in more inclusive team climates report higher levels of commitment and satisfaction, and demonstrate access to better job opportunities and career advancement.
- Well-being. Inclusion is associated with a higher sense of employee well-being and psychological safety, as well as employees feeling valued and respected. Exclusion is associated with emotional exhaustion, which in turn affects turnover intentions.
- Productive conflict. In inclusive teams, employees are better able to resolve conflict and be more satisfied as a result of having worked through the conflict effectively. Inclusion is linked to effective and productive resolution and integration of differing viewpoints.
- Legal risk. In inclusive climates, individuals from traditionally marginalised groups experience lower levels of harassment and discrimination. More advanced attitudes about social identity – a key attribute of inclusive leadership – are linked to more positive inter-cultural group relations and less cultural bias.
- Talent costs. Inclusion and inclusive leadership are associated with reduced turnover. Indeed, workplaces that encourage employees to voice their opinions and be involved in decision making have on average 33% lower employee turnover.
Australian leaders and organisations can build their capabilities by adopting DCA’s five mindsets of an inclusive leader:
Identity aware. Believes diversity can significantly improve organisational performance, and so learns about their own and others’ identities (e.g. age, gender)
Relational. Creates teams and networks in which a diversity of people feel they belong, and are valued and respected
Open and curious. Is curious about and open to new and different perspectives from a diversity of people
Flexible and agile. Is flexible about, and responsive to, a diversity of people and perspectives
Growth-focused. Challenges accepted practices and incorporates different perspectives into how business is done.
Lisa Annese, DCA’s CEO said there hasn’t been a lot of practical guidance for employers on inclusive leadership before now.
“A diverse workforce needs to be accompanied by an inclusive culture or organisations will never truly harness the benefits. Our Building Inclusion research breaks new ground in this area by shedding valuable light on the benefits of inclusive leadership and giving organisations the know how to fully grasp the opportunities,” said Lisa.
Stockland’s Mark Steinert, Managing Director & CEO said inclusive leadership is central to his organisation.
“Inclusive leadership is increasingly recognised as key to creating environments that not only harness diversity, but lead to a true sense of belonging and community. This is at the heart of Stockland’s purpose – ‘We believe there is a better way to live’. Success in delivery of our purpose depends on our ability to create that same sense of belonging and inclusion within our workforce. This starts with inclusive leadership. Unlike broader leadership that has been documented and debated for years, exactly what inclusive leadership is, and practically what leaders need to do and say to create inclusive cultures, is not always clear. Solving this challenge presents an incredible opportunity for Australian workplaces,” said Mark.
Susie Babani, Chief Human Resources Officer, ANZ said a vibrant, diverse and inclusive workforce is critical to ANZ’s success as a super-regional bank.
“To build the best connected, most respected bank in our region, we must attract a talented workforce which reflects the markets within which we operate. To unlock the value of this diversity, our leaders need to have an inclusive leadership style which seeks to respect and value every voice, and thereby drive innovation and creativity, and give all employees a sense of belonging,” said Susie.
Chris Sutherland, Managing Director, Programmed said leadership is the key to an inclusive culture.
“Understanding and drawing on the diversity of our people is at the heart of meeting the needs of our customers, building strong relationships across the communities we serve and engaging the many talents of the Programmed team,” said Chris.
Paul O’Sullivan, Chairman, Optus said, diversity is simply good business.
“We know we only derive real value from diversity when we make the effort to be inclusive. We need to ensure we involve all of our people to shape our strategy, our organisation, and our values,” said Paul.
About the research
Building Inclusion: An Evidence-Based Model of Inclusive Leadership is a partnership research initiative between DCA, Stockland, ANZ, Programmed and Optus.
The Synopsis Report can be downloaded here and the Full Report can be downloaded here. Take the test to find out if you are an inclusive leader – visit www.dca.org.au/gettinginclusive.
The research report is embargoed until 4.00am AEDT Thursday 22 October. In addition to Lisa Annese, DCA’s CEO, the following business leaders are available to discuss what inclusive leadership means for their organisations:
- A senior executive from Stockland
- Helena Bugeja, Senior HR Manager, Enterprise Diversity & Inclusion from ANZ
- Steve Taylor, Chief Strategy and Marketing Officer from Programmed
- Andrew Buay, Vice President Group Corporate Social Responsibility & Talent Coach from Optus.
The research involved interviewing 23 senior or executive managers from six different organisations, covering a range of functional business areas. All interviewees were selected on the basis that they had been identified as having strengths in the practice of inclusive leadership within their organisation. A comprehensive thematic analysis was conducted of their responses to a series of interview topics. This was used to develop a framework that organisations can use to build individual, team and organisational inclusive leadership skills.
‘Inclusive leadership’ refers to the capabilities (i.e. mindsets, knowledge, skills, and behaviours) which ensure a diversity of employee perspectives shape and improve an organisation’s strategy, work, systems, values and norms for success.
[i] Diversity Council Australia’s Working for the Future: A National Survey of Employees, 2010.
[ii] Diversity Council Australia’s Leading in the Asian Century: A National Scorecard of Australia’s Workforce Asia Capability, 2015.