The Diverse Thinking Capability Audit of New Zealand Boardrooms 2018 report, launched by the Finance Minister Grant Robertson in August, has the potential to increase performance across the justice system – diverse thinking leaders should be in all law firms, at the bar, on the bench, and in juries.
The Diverse Thinking Capability Audit explains what diverse thinking is and why it results in better identification of risks, opportunities and solutions. This makes for better advice and decision-making. It also explains why diverse thinking therefore matters in recruiting as a critical competency in the 21st Century. The main insights from the report of relevance to lawyers are below.
What is diverse thinking and how does it differ from diversity and inclusion?
Diverse thinking is distinct from gender equality and “diversity and inclusion”, which is about welcoming demographic difference in the workplace, and ensuring that all people feel respected and valued regardless of gender, ethnicity, sexuality, (dis)ability, or religion.
Diverse thinking is having a different viewpoint from the norm, taking different perspectives to problems and problem solving, and viewing issues through different lenses. For boards or organisations to succeed, you need diverse thinking leaders who can think about incremental/transformational/disruptive change.
Getting the whole talent pool round the table (gender, ethnicity, sexuality, (dis)ability) and reflecting your client base is a good start, but it is not enough. We need to leverage off this diversity to get more diverse thinking.
How do you predict diverse thinking ability?
There are a range of predictors of diverse thinking, of which demographic factors are only one.
Diverse thinking comes from having different characteristics and experiences from the norm. This difference may be due to having different demographic factors to others, such as gender, ethnicity or a different cultural background, age, (dis)ability, or sexuality.
But such factors are only one group of predictors of diverse thinking. There are many others including different professional, educational, and market experiences; different personalities, interests, values and communication styles; whether you were raised in privilege or poverty and in what circumstances.
So, although it often does, diverse thinking does not necessarily coincide with attributes like gender or ethnicity or age. It is crucial to dispense with stereotypes. Middle-aged Anglo-Saxon men can be diverse thinking leaders and young ethnic women may not be. As the Wharton School found, people from the same backgrounds may think very similarly, regardless of gender (Katherine Klein, Does Gender Diversity on Boards Really Boost Company Performance?).
Why is diverse thinking important?
Traditional skills are no longer sufficient for the “vuca” (volatile, uncertain, complex, and ambiguous) world we live in. A board, law firm, bar or bench lacking diverse thinking will suffer from groupthink, blind spots, stagnation of ideas, complacency and insularity. These attributes are the antithesis of the culture necessary for quality decision-making and top performance.
- Ensures you undertake a full 360-degree analysis of risks, opportunities and solutions, and that the right questions get asked from the start;
- Challenges the values that sit behind decisions, forcing deeper analysis and questioning history, presumptions and assumptions;
- Ensures you have client knowledge, intuition and empathy around the board table;
- Contributes a cultural lens and lessons from indigenous and other cultures;
- Assists with non-traditional disruption and sharper global competition in our online connected world;
- Contributes different networks, preventing “enclave” thinking and being complacent (as discussed in the Royal Commission on Banking in Australia, and the APRA Prudential Inquiry into the Commonwealth Bank of Australia); and
- Increases/improves the ability to respond to #metoo type issues.
Where do skills fit with diverse thinking?
Diverse thinking and skills are not mutually exclusive. Appointing diverse thinking leaders who do not have the right skills sets them up for failure, ensuring that they are viewed as a compliance tick who cannot contribute substantively to the organisation. They operate under a cloud of suspected incompetency.
The focus should be on determining what type of diverse thinker has the right skills and perspectives in the context of the particular industry and organisation. There is no one size fits all.
What are the main barriers to diverse thinking?
The main barriers to diverse thinking include: a culture of consensus; a chair (or in a law firm context, partner) that does not value diverse thinking; and tick-box compliance.
Culture has a huge impact on the expression of diverse thinking. Kiwi culture tends towards agreeability, and this extends into processes that encourage consensus and “getting the job done” over arguing through the different views and options. Diverse thinking is seldom the most efficient process, but the focus must be on prioritising quality debate and decision-making over pushing through quick consensus decisions.
The role of the chair/law partner is crucial too. Chairs that discourage diverse thinking are those who are only interested in hearing those who think similarly to them. They shut down diverse thinking leaders, let challenges drop, and “cast a shadow”: implicitly or explicitly directing others to align themselves with the view of the chair.
Tick-box compliance of “just getting a woman or a Māori onto a board” or into leadership means the appointee will not be influential as there is no expectation that the person will actually contribute substantively to better decision-making. The only thing worse than not having women or other ethnicities in leadership is having them in leadership and finding that they can make no difference, either because they are not allowed to, or they are not able to as they were only selected for their gender or ethnicity and lack the necessary skills.
What is the experience of diverse thinking leaders?
The diverse thinking leaders interviewed said that:
- They have felt underestimated, misunderstood, marginalised, side-lined and not valued;
- They feel compelled to prove themselves and dispel stereotypes about who they are and the value of their contribution;
- They feel considerable pressure to conform, and worry that others see them as making irrelevant contributions, or as disrespectful and disruptive for not “toeing the line”; and
- You need to be courageous to challenge and to disagree. But that often came at a cost to their careers.
Diverse thinking leaders talk about being discriminated against, whether by being given tasks that fit a stereotyped view of who they are (dealing with women’s issues or Pasifika issues), or being the recipient of aggressive, unhelpful, or paternalistic approaches from other directors or the chair. They say these negative experiences make it difficult to keep contributing diverse thinking. Defaulting to agreeing with the consensus would be so much easier. Nevertheless, they feel a responsibility to challenge and bring different viewpoints in the best interests of the board/organisation.
How can diverse thinking leaders be more influential?
All directors and leaders need good skills and to understand the particular industry and customers of an organisation to be influential. All directors need to work hard. But additionally, diverse thinking directors or leaders need to choose their boards (or law firm) wisely. Do not go where diverse thinking is not valued: you will not be respected or taken seriously.
Diverse thinking leaders need to articulate their different views in language others can understand. How you say it is as important as what you say.
Do not personify the devil’s advocate. Challenge for a clear reason, but compromise when needed. If you lose, then be a team player. You had your turn. Do not continuously re-litigate decisions.
Be sensitive to existing boardroom dynamics and pick when to work offline or at the board table. Work on your governance skills.
Contribute in all areas and not just on “women’s issues” or “Māori issues.” This may require you to build your skills in other areas.
How critical is the role of the chair in ensuring diverse thinking happens?
The chair is the most important determinant of whether diverse thinking happens in a boardroom or in an organisation. If the chair does not value diverse thinking, then it does not matter how valuable the diverse thinking contribution is, it will not be picked up and the director or leader will not be influential.
Chairs will find it much harder to chair a diverse thinking board, and they will have to be patient as it will take longer to get through the business. Chairs need to create an inclusive culture and respect and actively encourage diverse thinking. The chair also needs to be the conductor and the coach. He or she has to make sure the board works well together and mentor diverse thinking directors to maximise their contribution.
“Many chairs have the skills for the job, but the job has changed,” says Rob Campbell, Chair of the SKYCITY Entertainment Group and many other boards.
How do you encourage and grow diverse thinking?
Diverse thinking is a critical competency for all directors and leaders and not just for visually diverse people. You can grow diverse thinking capability by being curious and turning over the stones of your own thinking, as Sue Suckling has said. It is important to actively seek out new experiences, and interrogate your existing knowledge and preconceptions. Unconscious bias training is essential.
Other ways to encourage and grow diverse thinking include:
- Using a diverse thinking matrix alongside the skills matrix to ensure you get the best thinkers;
- Chairs, directors, leaders and recruitment specialists broadening their networks. There have to be people on the long list that no one on the recruitment committee knows;
- Generational change on the leadership or board. Stereotypes about age (too old, too young) are as unacceptable as those about any other characteristic irrelevant to performance, but younger thinkers may be better adapted to digital disruption and demographic transformation. Youth is one gap in thinking on many boards and in many leadership teams, and it is increasingly important to understand and reflect that customer base;
- Leadership from senior practitioners in all fields to define diverse thinking, identify the issues, and to grow diverse thinking. Leadership means taking practical actions to value, encourage and grow diverse thinking. But it also means talking about these issues, mentoring diverse thinking leaders and growing your own diverse thinking capability. Leadership means demonstrating behaviour that encourages diverse thinking and showing others the value of diverse thinking capability; and
- Realigning processes and practices to allow diverse thinking, and encouraging diverse thinking throughout the organisation.
In the boardroom context, there is no reason why New Zealand companies cannot be global leaders in diverse thinking governance. Our small size means we must have peak performance to win, but our small size also means we can be fast first movers in maximising this advantage for New Zealand board performance.
How do you measure diverse thinking?
Collecting data on how many women or ethnicities there are in the workplace is easier to do than measuring diverse thinking ability, but what gets measured gets managed. Thus, given the importance of diverse thinking to quality decision-making and performance, the Diverse Thinking Capability Audit includes tools of measurement, like the diverse thinking criteria of boards. For example, one of the criteria is: Does the board agree all the time? If it does, then not much diverse thinking is taking place. As one interviewee in the Audit said “A good board is like The Avengers – you only need one Hulk.”
Mai Chen firstname.lastname@example.org is Managing Partner of Chen Palmer Partners and Chair of the Superdiversity Institute for Law, Policy and Business. The Institute’s Diverse Thinking Capability Audit of New Zealand Boardrooms 2018 can be downloaded from www.superdiversity.org. Registrations are now open for a Diverse Thinking Governance Summit to be held in Auckland on 19 November.