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Diversity, equity and inclusion in the workplace – what does this mean? Is it a nice-to-have? Or does it play a critical role in driving company culture and performance? What are the impacts for your company, and how do you implement this strategy successfully?
On the latest episode of the HR Think Tank, Cat-Thao Nguen, CEO and Managing Director of Global Ready, joins us in answering some of these questions. Global Ready provides coaching, training and consulting services in inclusive leadership and executive development to global companies.
Cat-Thao is the first person from Vietnam to be certified by the Cultural Intelligence Centre and has held roles in corporate law, private equity and international education. But more than this, she has been a complete trailblazer. Cat-Thao was the first Asian-Australian to be the Australian Youth Representative to the United Nations General Assembly and was recognised in the 40 under 40 most influential Asian-Australian in 2019. Cat-Thao is also a published author, and her memoir We Are Here, about her family’s journey from Vietnam to Australia, was shortlisted for the 2016 NSW Premier’s Literary Awards.
00:00:00 – Intro
00:01:54 – The Meaning of Diversity, Equity & Inclusion
00:05:42 – The Term Usage of Diversity, Equity & Inclusion
00:07:31 – The Engagement Evolution of Diversity
00:10:16 – Why Companies Should Invest in Diversity, Equity & Inclusion
00:16:31 – Key Actions for Creating an Inclusive Workplace
00:18:23 – The Impact of Diversity Initiatives on Individuals
00:21:57 – Dealing with Leaders Who Don’t Support Diversity Initiatives
00:23:14 – How to Better Manage the Implementation of Diversity Initiatives
00:26:33 – The Future of Diversity, Equity & Inclusion
00:27:53 – Common Traps and Mistakes with Diversity Initiatives
00:30:08 – Advice for Companies That Want To Invest in Diversity Initiatives
00:31:22 – Thao’s Key Message for Inclusive Leadership
00:32:22 – Fast Five Questions
00:38:35 – Outro
Khai, I’m really glad that you asked that foundation question because I have found that there is actually an assumed understanding of what all these terms mean. Now, I think when people start talking about diversity, they automatically start talking about things like gender, sexual orientation and racial diversity. But that’s not an all-encompassing definition of what diversity really means.
Every human being has inherent and acquired diversity traits. When I say “inherent”, – these are traits that you don’t have any control over. However, when it comes to acquired traits – these are the ones you have control over. For example, you may have chosen to study a new language.
And then everyone also has visible and invisible diversity traits. All of these traits combined help us achieve a unique life experience and, therefore, perspective on things that we may not be conscious about.
So that’s diversity.
Inclusion is where people are able to have their diversity traits recognised, celebrated and leveraged. If we are able to value different diversities in a very genuine way, then you can leverage it for group and team outcomes. And when you have a state of inclusion, people have a sense of belonging: if they advance the interest of the organisation, their interests are also advanced.
The third element is equity. And equity is very, very important – but it should be differentiated from equality. Essentially, equality involves treating everyone the same. In other words, equality doesn’t necessarily account for the fact that people need different tools. But, on the other hand, equity recognises the structural issues that have been limiting different groups from achieving their full potential.
So, to summarise, diversity is essentially showing up at the dance. Inclusion is being invited to dance. And equity is actually participating in the dance as themselves.
Q: And how interchangeable are these terms? Some people talk about diversity and inclusion; some people talk about diversity, equity and inclusion. Some talk about diversity and belonging. I mean, when do you use these terms and which terms are the ones that you should be using?
So, if I go back to the dance analogy, you start with ensuring that there is diversity in your workplace and that you understand that your workforce has different traits that should be valued. And then, to ensure diversity, you need to create an inclusive state.
But, you can’t compartmentalise and say, “Okay, we’ll do diversity first, and then we’ll do inclusion, and then we’ll do equity.” It’s almost like a Venn diagram – some are byproducts of the others. But if you actually create an inclusive culture, then perhaps diversity can flourish more in your organisation at all levels.
And diversity is not just about what can be seen; it’s also about the things that are not necessarily obvious. So, as part of that discussion, it's also about your intellectual capacity. I mean that there's a whole bunch of things that people don't talk about. I think the shallow level of engagement is really, “this person looks different, so let's have them involved.” Q: Has diversity evolved beyond surface-level differences?
Not necessarily. Not all of us have gone way beyond that.
I think one of the interesting questions that Rasma Menaka, a racial trauma therapist in the US, addressed was that if we go into a room, and we ask, “Who here believes in diversity?” – everyone is going to put up their hand. And then his second question is really interesting, “Diversity from what?”
So, we have to understand that norms have been set, and those norms have formulas. So, for example, good leadership looks like this, talent looks like that, and competency looks like this. And when I say “looks”, it’s not necessarily visual; it’s also behavioural. In other words, good leadership behaves like this and has these attributes.
This has led to us setting up a lot of unconscious formulas, which is why unconscious bias is so crucial to this whole story. Because people don’t actually wake up and say, “Today, I am making sure that I will not promote this person because they are a woman, this person, because they’re indigenous, or this person because they are of Chinese ethnicity.”
People aren’t doing that. And yet 97% of all of our leaders in Australia, according to the Australian Human Rights Commission, are Anglo-Celtic and European, so they appear white. Now, that’s certainly not the case for the Australian population. So what is really going on here?
And so, when we reduce diversity down to visible representation, we only address the symptoms of the issue and not really the structure.
Q: Well, talking about diversity, equity inclusion, why should companies care about this? And why should they invest in this space?
Good question, Khai. For me, I have four lenses when I work with my clients in this space. The first lens looks at things from a macro perspective – what is the macro landscape that your organisation is operating in? What’s the organisation’s perspective, the team perspective, and you as an individual leader? We also look at the challenges that your industry or sector faces.
A lot of the challenges come down to volatile, uncertain, complex, and ambiguous issues. COVID is a classic example of this “VUCA” world that we’re in – the problems that face us now are complex; they are not simple problems.
So, what worked for us in the past is not necessarily going to work for us in the future. And research shows that inclusion is very beneficial to addressing complex problems because complex problems aren’t merely solved with expertise anymore. Because there are so many unknown factors, you need a diversity approach.
For example, a junior staff member may have a different take on the problem than a veteran in that industry. There are countless examples in the real world of how inclusion has facilitated complex problem-solving.
The second perspective is centred around innovation. Our competitors are not necessarily coming from traditional spaces anymore. Extensive research has shown if the executive leadership possesses different diversity traits, including career changes or age, they can out-innovate their competitors and are 70% more likely to capture new markets.
Next is the team perspective. Research shows that a sense of belonging engenders greater productivity, and inclusion engenders more return on cash flow per employee in the traditional metrics of an organisation’s success.
And then, finally, you have the individual’s perspective. I don’t think a modern leader only focuses on wealth accumulation anymore. Last week, I spoke to one of my clients, and he said that he couldn’t compete on money anymore. If he increases the staff by 10%, his competitors will increase theirs by 20%. And so he said, “The only competitive advantage that I have, is to have a phenomenal culture where people feel like they belong.” And, and that’s where people will turn down jobs that pay significantly more to be at a place where they can fulfill their potential.
Yeah. Because obviously, the salary, the money, and financial aspects are important, but it's not the whole thing. And what we've heard from previous guests is that you have to compete for talent for more than just money. It's about the challenge. It's about the sense of belonging, identity, and how much they are going to grow. So it encompasses all of those factors, not just money. I think the recent pandemic situation has put up that mirror for people to look inwards and ask that question for themselves. So what you've said, Cat-Thao, I'm just pulling out a few of the things that you said. Diversity, inclusion, and equity help companies in a range of ways. You have people around who can help you get to that next level, and you can potentially attract higher revenue growth because of growth in existing markets and introduction to new markets. And then the last bit that you've talked about is the ability not only to retain quality talent because of a sense of belonging but also to recruit new talent. So if you're competing on that level, I think these are some of the key differences that will help you. And so, if you're looking at the long term or the macro level, it can radically benefit your company beyond just being a good actor in the space.
Yeah, absolutely. If you’re on the board of a company right now and in the highest leadership, not having an inclusive culture is a strategic risk.
Q: So, how do companies create a culture of diversity, equity, and inclusion? What are the key actions that people need to take?
First of all, I think that you need to look at your organisation and gather data. One of the most common challenges are assessing whether the leadership reflects the rest of the organisation and genuine fairness and equity as people progress throughout the organisation.
You also need to establish if there may be a whole bunch of visibly diverse people, both not enough diversity when it comes to the inherent and acquired diversity traits?
So before you start implementing policies or putting together targets and quotas, you need to have a process of serious inquiry. And that inquiry phase is about uncovering what’s going on in your organisation. And then measure the data in different ways. For example, try to ask your staff if they feel like there’s a sense of belonging. Is your culture able to foster an inclusive environment, and what does that mean? Ask your people.
Q: You talked about the impacts on four different levels: the macro, organisation, team, and individual levels. I just want to press on the individual level a bit more. What is the impact on an individual when your company rolls out these initiatives?
It’s very interesting because different people are impacted differently depending on how they identify.
If the organisation starts searching to fulfill leadership positions, it will reflect at least the Australian population or their own junior level staff, then perhaps someone who identifies as a minority person in terms of their ethnicity. So if I’m going to talk about a staff member who’s not in, they might feel a sense of hopefulness. But they also might feel targeted because people who identify as the majority might become resentful and defensive.
So the organisation might have positive intentions; the implication for the minority is that they’re the ‘diversity hire’ – they only got there because of their ethnicity and not because of merit. So, it’s not necessarily all roses when you embark on this journey, which is why it’s very important to have a holistic approach, to support and have mechanisms that allow open conversations.
You need to communicate to your staff and say, “Look, we’re on a journey of transition here. And the way that we’ve done things before has to change, and this is why.”
As leaders lead a transition where inclusion is not the new normal yet, this is the stage where people feel like they’re losing a sense of place in the organisation, and there’s more polarisation. So leaders need to understand that staff may end up going through all the stages of grieving before they accept the change.
Q: So what if you're a leader of the organisation and the other leaders on your team tell you that they don't believe in diverse hires and would prefer to pick on merit. What do you say to your leaders in your team who have this view?
Yeah, I come across this quite a lot. And what’s happened in that case is the whole leadership team hasn’t been taken on an inclusive leadership journey. And so, they don’t necessarily have a foundational understanding of what these principles mean and why it is fundamentally important to the business.
If they haven’t done that groundwork, the views in your team will differ because there isn’t a basic understanding of what merit is and why it’s important to disrupt the legacy of non-inclusivity and lack of diversity.
Q: Firstly, I want to applaud those taking this initiative and looking to implement our diversity, equity, and inclusion policy. But what I often hear is people say, “Look, I only have time, or I only have the headspace, for one initiative. So, for the next three years, we're only going to focus on gender.” How can companies better manage the implementation of such initiatives to go beyond good intentions or just solely focus on one group?
Yeah, I hear the same thing as well, Khai. And I also hear people talk about diversity fatigue. But once we go down and understand what inclusive organisations entail, we can see that there are shared roots of the problems. And the shared roots of the problem are that there are norms that have been set up around implicit bias.
And as I referenced before, leadership looks and behaves like this, and leaders have these attributes. Or someone confident is someone who speaks a lot in meetings. So, if you’re quiet, you aren’t confident. And if you don’t self-promote yourself and tell everybody that you’re great, it means that you’re not competent. So, we’ve set up those archetypes. And so those archetypes inadvertently actually exclude a lot of people, including those who work part-time, women, and people who belong to certain ethnic minorities.
When we do the deep work on the structural level, we start to uncover those norms that have been set up. And of course, we can then also concurrently tackle the visible themes such as race issues. But it doesn’t mean it’s an either-or.
If we work to create inclusive cultures and diagnose the right issues, you’ll find that you can have progression on lots of different themes at the same time.
I think that it is very quickly becoming a mandate within all organisations – it just makes business sense. More and more people are employing chief inclusion officers or chief belonging officers. And this is not just going to be in the realm of HR; I think it is a strategic priority, and therefore a strategic risk if you don’t address it as an organisation.
I am also seeing that organisations include this as a competency measure. In other words, inclusive leadership is a measured competency for all leaders. And the most pioneering or best-practice companies have inclusive behaviours as a competency, even from graduate-level to the top.
Q: What are the main traps when companies embark on this journey? And what are some of the lessons you can share for people who want to take this journey?
I generally see three main challenges, and they’re obviously related to the lessons.
The first trap is that they treat symptoms but don’t treat the structures. They don’t spend time doing requisite inquiries to harvest the information to diagnose what is really going on. So they see that other organisations are addressing gender, racial minority, and ethnic diversity targets, and they pick a target to work on. And that’s it – they’re merely treating a symptom.
Issue number two is that they, therefore, don’t have a holistic approach. For example, they might have formal programs in place, but they don’t change KPIs. So they don’t have any accountability mechanisms at all. The holistic approach should be taken on multiple fronts, including internal and external communications to the research you do and how you gather your data.
The third thing is they under-invest and rely only on employee networks. So, for example, the Pride Network is a collection of employees who identify as minorities. But they’re volunteers. So they’re doing their full-time job and committing to the Network. And so the burden on them is then greater.
Organisations need to be investing and committing from a public communications perspective.
So, these three areas are the main traps, in my opinion.
Q: And for companies that are listening, or are already thinking about this, and want some help, who do they go to? Who do they ask for help?
Well, look, there are a lot of experts working in this field. Depending on the maturity of where the organisation is and whether there are clear benchmarks to measure your organisation on this continuum, there’s a global diversity inclusion benchmark that has been developed by over 100 experts from around the world who are working in this space.
For example, you have different levels of companies, from level one, which is very much compliance-driven, to level five, which is best practice. So you need to do a self-assessment and identify where you need to bridge the gap. There are a lot of people who are consulting and working in this particular space. But there are also a lot of free tools out there that you can use to make a start yourself.
Q: So you've run inclusive leadership programs across Asia,-Pacific, Europe and North America. What are the key messages you want to share with the business leaders out there?
So my key message is this one particular quote, which I really love by Javier Pladevall, who was the CEO of Volkswagen Audi Retail in Spain, and he said, “Leadership today is about unlearning management and relearning being human.”
And fundamentally, the journey of inclusive leadership is about relearning being human. And if you create that culture where people can relearn being human, you have a sense of freedom yourself because you can be authentic and vulnerable as a leader in the organisation.
- What was your first job? Okay, so I’m going to talk about my first paid job because as a kid, I was working with my mom in a sweatshop illegally since I was an eight-year-old Vietnamese refugee. I was also underage for my first paid job. I was working for my uncle and his bakery, selling Banh Minh, Vietnamese pork rolls, doughnuts, and so forth.
- What’s something interesting that is not on your CV? Something interesting that’s not on my CV is I’ve gone on a caving expedition to the world’s largest cave in Vietnam. It was one of the most phenomenal and majestic experiences of my life, going through this cave for several days. There are no words to describe that experience. And then inside the cave, there’s this incredible structure called the wedding cake. Once you get there, everyone takes that one iconic photo surrounded by this massive vacuous space. So I decided to order an Australian flag so that I could take a photo. But it mistakenly ended up being the New Zealand flag.
- What advice would you give your eighteen-year-old self? You are enough, and you have always been enough. And what runs through you is the courage, the resilience, the strength, the grace and compassion of all of your ancestors, including your parents. And no matter what will happen in the future, you just need to remember that your ancestors are always with you. And you are never alone. And you’ve never been alone.
- What book is a must-read, or what movie is a must-watch? Talking to my Country by Stan Grant. One of the biggest issues in Australia is not being able to have a reconciliation with our First Nations peoples. Actually, I think that is the biggest issue facing Australia. So I would encourage people to read that. The film that I would encourage people to watch is an incredible film called A Beautiful Day in the Neighbourhood, which stars Tom Hanks, and it’s about an amazing, incredible educator, Mr. Rogers. And he was ahead of his time – decades and decades ago, he was talking about mental health. He was talking about all these principles and how to engage with children to talk about their feelings. And it’s amazing. So watch that movie.
- What’s a job for the future that doesn’t exist today? I think a job for the future that may not exist is possibly a Chief Purpose Officer. We hear about For-purpose Organisations, but I think every organisation, profit or nonprofit, should be ‘For-purpose’ to serve the greater humanity and our planet. And I was speaking to a client of mine, a US company, and they do something amazing – every person that starts working there has to go through a purpose program. And the program is about uncovering “what is your purpose?” Then, at the end of the program, they need to assess whether their life purpose aligns with the values of the company and the job that they’ve been employed to do. In other words, can you live your purpose through your job? I think it’s a remarkable way to re-engineer the thinking of organisations and the people within them. But, again, that goes back to the macro view that if you fulfill your potential, you advance the organisation – it’s a beautiful, interdependent, and symbiotic relationship. So, if organisations are purpose-driven in terms of how they can be of service to our planet and humanity, there’s a dynamic force that goes within it, and that people within it are individual units within an ecosystem, and they also are fulfilled and living their purpose.