We are delighted that the McKinsey & Company report Delivering Through Diversity that we featured in our pre-launch event together with the British Chamber of Commerce in Hong Kong in December 2017, has been released this week.
Building on their highly regarded 2015 report Why Diversity Matters, McKinsey tripled the number of companies and countries surveyed for this latest report to 1,000+ companies in 12 countries based on two measures of financial performance -- profitability and value creation. It also analysed the Inclusion and Diversity (I&D) efforts of 17 companies to provide a nuanced view of how companies are leveraging I&D to achieve greater growth.
What it found is that companies in the top quartile for gender diversity on executive teams were 21% more likely to outperform on profitability and 27% more likely to have better value creation. Companies that were most successful had women on their executive teams in line roles rather than staff roles.
Interestingly, the report notes that not only is diversity good for business, but that companies that are less diverse – in terms of gender and ethnic / cultural background—are adversely impacted, with a 29% less likelihood of achieving above-average profitability.
For those companies looking to widen and deepen their I&D efforts, the report offers four key areas of best practice to integrate into an effective I&D strategy:
1. Publicly commit to an I&D agenda, cascade it down the organisation, and ensure the efforts are resourced and supported;
2. Articulate the link between I&D strategy and business growth priorities;
3. Create a targeted set of I&D initiatives that will resonate with employees and drive sustainable change; and
4. Tailor the I&D strategy to maximise local impact.
Placing inclusion and diversity at the core of any business strategy is not an easy task, particularly in Hong Kong where tackling biases around recruitment, promotion, global mobility assignments, flexible working and other factors affecting the female talent pool is challenging. But there is no doubt that this is a key enabler of growth and competitive advantage for business, and an imperative for Hong Kong in order for our businesses and economy to thrive.
McKinsey’s research underscores TWF’s call for a stronger regulatory framework governing board diversity and the importance of our continued work with other stakeholders in this area. It also highlights why we are committed to working with companies and individuals on new approaches to tackle both institutional barriers to the advancement of women as well as day-to-day micro-inequities that erode inclusive workplace cultures.
As usual we would love to hear from you. Get in touch at Fiona.Nott@twfhk.org.
What it found is that companies in the top quartile for gender diversity on executive teams were 21% more likely to outperform on profitability and 27% more likely to have better value creation. Companies that were most successful had women on their executive teams in line roles rather than staff roles.
Interestingly, the report notes that not only is diversity good for business, but that companies that are less diverse – in terms of gender and ethnic / cultural background—are adversely impacted, with a 29% less likelihood of achieving above-average profitability.
For those companies looking to widen and deepen their I&D efforts, the report offers four key areas of best practice to integrate into an effective I&D strategy:
1. Publicly commit to an I&D agenda, cascade it down the organisation, and ensure the efforts are resourced and supported;
2. Articulate the link between I&D strategy and business growth priorities;
3. Create a targeted set of I&D initiatives that will resonate with employees and drive sustainable change; and
4. Tailor the I&D strategy to maximise local impact.
Placing inclusion and diversity at the core of any business strategy is not an easy task, particularly in Hong Kong where tackling biases around recruitment, promotion, global mobility assignments, flexible working and other factors affecting the female talent pool is challenging. But there is no doubt that this is a key enabler of growth and competitive advantage for business, and an imperative for Hong Kong in order for our businesses and economy to thrive.
McKinsey’s research underscores TWF’s call for a stronger regulatory framework governing board diversity and the importance of our continued work with other stakeholders in this area. It also highlights why we are committed to working with companies and individuals on new approaches to tackle both institutional barriers to the advancement of women as well as day-to-day micro-inequities that erode inclusive workplace cultures.
As usual we would love to hear from you. Get in touch at Fiona.Nott@twfhk.org.
