Can developing more agile ways of working help a business to promote gender equality and close the gender pay gap? Dr Simon Hayward, CEO of Cirrus and author of The Agile Leader, looks at how agile leadership can encourage equality as well as boosting innovation and performance across an organisation.
What Is agility?
Agility enables organisations to react swiftly and responsively to opportunities and challenges. By adopting agile ways of working that focus on ruthless prioritisation, devolved decision-making and investment in customer research, leaders can drive innovation and learning. At the heart of agile working are multi-skilled, diverse and collaborative teams. This is why developing a culture of agility can also help to promote equality across an organisation.
Agility and diversity
In a world defined by complexity, disruption and technological change, the most successful businesses value diverse perspectives and experiences. When I was researching The Agile Leader, I spoke to many CEOs from a wide range of organisations. I was impressed by the importance that leaders from some of the most innovative businesses around place on gender diversity. They look beyond gender pay gap reporting and other government guidelines and quotas. They see diversity and equality as good practice in a world that is changing at a rapid pace.
Agile working and the gender pay gap
The UK parliament’s women and equalities select committee has advised that more agile ways of working, where flexibility and innovation are encouraged, could help to close the gender pay gap. The committee’s research identifies the lack of flexible working opportunities as the main driver of the enduring pay difference between men and women.
Deloitte and Timewise’s Manifesto for Change: A Modern Workplace for a Flexible Workforce also explores how working practices can be used to improve gender parity. Respondents said that employers should create workplace cultures in which people are judged on the work they do rather than the hours they work (70 per cent), recruit and train managers who support their team (70 per cent), and implement a range of flexible working solutions (60 per cent).
Research by the Agile Future Forum in the UK has identified that more agile working practices are already increasing productivity and delivering value equivalent to between 3 and 13 per cent of workforce costs in employers adopting them effectively. Examples include sharing pools of labour to encourage more flexible project working to meet changing demand and multi-skilling to enable people to move between teams in a more seamless way.
Creating cultures of diversity
Gender pay gap reporting can help us to focus on this important issue. However, if we want to create long-term, sustainable change, we need to take a holistic view and consider the overall culture of our organisations.
Rather than focusing on meeting a target, many successful businesses focus on creating a culture of diversity and equality. If you’re trying to change the culture of any organisation, the best place to start is in the board room. In most organisations, more men than women sit around the board table, and more men than women hold the best-paid jobs. Typically, the proportion of women falls the further up the pay scale you go.
Start at the top
Many of the CEOs I spoke to ensure that their own leadership teams are diverse. They take their responsibility as role models seriously. Ultimately, they are focused on delivering results and they value the importance of diversity in achieving this. As one CEO commented, “If we tried to do what we’re doing with a single experience set, we would fail. Diverse teams can share varied perspectives. Together we look at things from different angles. It becomes a collective, which makes it easier to cope with uncertainty and to find better solutions.”
Diverse, multi-skilled, multi-experienced teams are typically more able to address difficult challenges in the pursuit of improvement. In short, they make smarter decisions. This helps to ensure that organisations prioritise what is most important. Greater collaboration also helps to create more connected organisations, able to adapt quickly and with confidence.
Benefits of boardroom diversity
There is a great deal of evidence to demonstrate a strong correlation between gender diversity in leadership teams and above-average financial performance and customer satisfaction. McKinsey’s Delivering through Diversity research shows that board-level gender diversity has a positive impact on both profitability and value creation. At the other end of the scale, a lack of diversity correlates with below-average performance.
We are faced with many different opportunities and challenges every day. The way teams interact has become a business-critical issue. To address this, we need diverse teams who can share a range of experience. This variety encourages deeper collaboration, which generally leads to more effective solutions.
Diversity and innovation
Diversity can also boost innovation, which is a top priority for today’s institutions. Through innovation, we create new value for our clients, colleagues and partners through significantly adapting existing products and services or creating new ones that either revolutionise or disrupt existing markets.
A study from the US Center for Talent Innovation has also found strong links between diversity, innovation and market growth. The research identified a “diversity dividend” that inclusive leadership reaps from a diverse workforce: increased market share and a competitive edge. Another interesting finding was that diverse leadership teams tend to encourage a “speak-up culture” which leads to valuable insights that meet the needs of under-served demographics, yet another thing which is linked to overall performance improvements.
What is holding women leaders back?
A key element of agile working is a willingness to take calculated risks. An aversion to risk is a barrier to agility. Over the years, several studies have found that men are more inclined to take risks than women are. A recent KPMG women’s leadership study found that women are less bold in taking steps toward leadership roles and six in 10 find it hard to see themselves as leaders. The results reveal a critical disconnect: women want to lead, but caution often holds them back.
An aversion to risk can be compounded by a culture of caution in many institutions. A fear of failure and its consequences, is a leadership issue. It can be a particular issue for women. It inhibits experimentation and can slow down innovation and improvement. If we fear making mistakes, the only thing we will learn is how to avoid them. By encouraging people to learn from mistakes and failure, you will be encouraging more women to develop, grow and take on higher-paid roles in your business.
Many of the high-profile women leaders I have interviewed and worked with are role models for a more agile style of leadership: they have a very clear purpose and vision and they are adept at devolving responsibility to empowered, diverse, multi-talented teams. They encourage experimentation in a safe environment and are unafraid to drop an idea or project that isn’t working out and focus resource where it will have greatest impact. These are the sort of skills that today’s organisations need to develop. This will ensure that we have more and more powerful role models for a new generation of agile female leaders. This will fuel the cultural change that will lead to much greater equality across our organisations, helping us to close the gender pay gap and to become more future-focused.
© Executive Compensation Briefing 2018