Saturday, September 23, 2023

How to start treating human resources as the engine of profit?

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Shreya Christina
Shreya has been with for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

Desmund Adams, Founder and CEO, Focus & Find Board & Executive Search

I think it’s time to see the human resources department as an investment and an engine of business profit – rather than an overhead cost.

In other words, it’s an untapped competitive advantage. Because a conscious effort to recruit differently from the competition can set you apart and set you on the path to greater profitability.

How can recruitment achieve all of that?

By leveraging the proven power of diversity and inclusion in the executive suite. Research research after research research, from DeloitteMcKinsey & CompanyBoston Consulting GroupHarvard Business Review and more, they all show the same thing: companies with more diverse executive teams outperform their more homogeneous peers – by 36% according to McKinsey.

It’s really very simple. Diverse teams are more creative, innovative teams. And innovation drives profitability in every industry through breakthrough ideas, patents, new ways to engage with customers, building brand new customer bases – any kind of innovative problem solving that keeps you one step ahead.

When approaching a problem, we bring our own individual experiences to the table. And when everyone around the table comes from the same life experience, it can be easy to assume they’re more likely to agree than not. It’s easy to sell your idea, easy to come to a consensus, and easy to overlook the truly innovative ideas.

Being with others who are similar to us can make us think we all have the same information and share the same perspective. As Katherine W. Phillips notes:“When we hear dissent from someone who is different from us, it evokes more than when it comes from someone who is similar to us.” Just having diversity in a group can lead people to believe that differences in perspective exist, and I’ve found that belief alone can change people’s thinking.

When members of a group come from different backgrounds, even look and talk differently, expectations can change. There will likely be differences of opinion and perspective. You will have to work harder to sell your idea. And when all those different perspectives and points of view bounce off each other, sparks fly.

And sparks ignite new ideas.

This is not just a theory; it has been proven to work in the real world. What some call ‘peripheral knowledge’ – input from the fringe of mainstream thinking – is often the source of the most innovative breakthroughs.

For example Reebok borrowed the idea for cushioning in a best-selling intravenous fluid bag basketball shoe. Qualcomm’s revolutionary color rendering technology originated in the study of microstructures of a butterfly’s wings. Design agency IDEO created a leak-proof water bottle by looking at the technology of a shampoo bottle cap. And a University of Texas banking study found that increased racial diversity was associated with better financial performance.

This is how diversity works: by encouraging consideration of alternatives beyond our own limited worldview and turning them into profitable innovation.

So, how do you achieve this holy grail of diversity? How do you implement change in your organization?

It’s more than just a press release. Words are beautiful, but they are just words.

It’s more than appointing a Chief Diversity Officer – which can be an important step and a visible message across the company how seriously you take this. But without the support and authority that comes with the title, you’re only setting up the Chief Diversity Officer for failure.

It’s more than setting a quota for people of color. (that is illegal, anyway, and misses the point. Diversity includes straight white men – the benefits come from having all points of view.)

It changes the way you recruit throughout the process. From how you write the job description to where you look for candidates, and from how you talk about your own company to how you conduct interviews.

What can you do in your organization to realize these benefits?

This may sound counter-intuitive, but don’t start recruiting people of color and women. If you don’t make your process truly inclusive (and that means including white males too), you’re setting yourself up for failure. Yes, it is important to make a conscious effort to include people of color and women; also consider age, gender identity, age, neurodiversity.

That probably means that you have to look outside your current network: alumni associations, industry relations and the like. Because the net result of recruiting the connections you already have is to keep taking on more of what you already have.

Change the way you develop job description requirements. Asking for “10 Years of CPG Management” immediately limits your candidate list; instead, define skills, not experience. Look for career advancement and specific success stories and consider parallel skills.

Finally, take steps to eliminate unconscious bias by creating a blind list of top candidates – remove names, schools, specific companies. This eliminates the opportunity for reviewers to make an initial judgment before getting to know the candidate.

This kind of wholesale change will require a buy-in from the top, or it will just be window dressing, the hot-button issue of the flavor of the month until something new comes along. It is the duty of HR professionals to take the time to conduct research showing that diversity in executives can increase profits by 36%. Then present that to your company’s board, along with the recommended process changes.

After that, it probably won’t be long before human resources are seen as an investment and an engine of company profit.

Steve said, “The real source of wealth and capital in this new age is not material things – it is the human mind, the human mind, the human imagination and our belief in the future.”

What better way to summarize the value of building a more diverse workplace? Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?

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