The past few months have challenged us in more ways than we could ever imagine. Most importantly, we have been forced to deal with the fact that our soft underbelly – inequality – has been exposed. The Covid-19 pandemic has put the spotlight sharply on the underlying conditions that have plagued our society from as far back as we can remember, and way beyond that. The foul truth of the inequality in our country can no longer be ignored. We are clearly sitting on a time bomb.
Add to that the dreadful drama that has played out around Clicks these past few days. The scandal has highlighted the fact that we have been failing miserably in bringing about true transformation.
After so many incidents in recent times, where companies like H&M have been exposed and punished for racially insensitive ad campaigns, it is difficult to comprehend why leaders are not taking transformation seriously enough. How did such an offensive Clicks ad campaign see the light of day?
How many eyes saw it before it reached the public’s eye? Although the top management can claim they were not aware, clearly not enough had been done to ensure true transformation in the minds of those who did not flinch at or even notice the offensive nature of the ad.
Clearly too many leaders are seeing transformation as a numbers game. In the Clicks case, the head of marketing is black. The number of black people in management is not, by a long shot, an indication of true transformation.
Earlier this year, the investment bank Goldman Sachs announced their new diversity rule that says they will no longer take companies public that do not have at least one board member from an under-represented group. Although this is a gesture in the right direction, is it not amazing that at that inflexion point, where they were about to make a “bold” decision, the decision itself can only be labelled as bold when you compare it to the past and not to what is needed for the present and future?
Depending on the size of the board, insisting on one individual is hardly going to make a meaningful dent in the diversity that is needed: of course, noting their phased approach, according to news reports, which requires at least two female directors by 2021.
Depending on the diversity of the population in a country, the subject of transformation, in this context, can have many levels of complexity. In a country like South Africa, diversity also has political nuances. For example, only requiring one female board member would not address the lack of racial diversity and related complexities, and could thus result in boards remaining 100% white with what could be only one token female.
In homogeneous societies, addressing the diversity issue is far simpler than in countries like South Africa, where one has to consider gender as well as multiple categories of race and ethnicity. Of course, when we talk about diversity, there are other factors at play as well, such as age, education, expertise, life experience and an understanding of constituencies’ needs.
Goldman Sachs cites academic research which points to organisations with diverse boards making better decisions and outperforming those which only have white males at the helm. These are hugely important findings.
Our concern, however, is that history has proven over and over again that when organisations only follow rules to comply, without being fully immersed in the spirit of the principle (form over substance compliance), real meaningful transformation does not take place and the value thereof is not extracted.
Let us use South Africa as an example again, purely because it is probably one of the countries with the most complex dimensions in terms of diversity. The objective of the BEE Act is to address the socioeconomic imbalances created by apartheid through policies and legislation. In other words, it aims to bring about equality of opportunities in the economy in terms of race and gender; through empowering those who were previously deliberately excluded.
The more likely the organisation is to conduct business with government entities – or be a supplier of an organisation that conducts business with government entities – the more important their BEE status becomes. Such organisations therefore put considerable effort into improving their BEE status through getting their numbers right.
The achievement of equality is a foundational value of the South African state in terms of Section 1 of the Constitution. It is, therefore, a constitutional imperative in South Africa – not because politicians say so, but because the supreme law of the country says so in section 9(2), which reads:
“Equality includes the full and equal enjoyment of all rights and freedoms. To promote the achievement of equality, legislative and other measures designed to protect or advance persons, or categories of persons, disadvantaged by unfair discrimination may be taken.”
It is this clear this provision focuses on equality of opportunity and not equality of outcome. Sadly, this has been abused by some who trade purely on their race and gender, and others who take advantage of a pernicious system that promotes the exchange of illiquid equity shares (often over-valued) for cheap race and gender currency that is totally unengaged in the core business of the organisation.
The BEE Act is one of those legislative measures envisaged in Section 9(2) of the Constitution. It is a piece of legislation that is intended to give practical effect to the constitutional aspiration of equality (of opportunity) in the country.
It is therefore not uncommon to find leaders boasting about transformation in their organisations based on the demographic profile of their staff and leadership, as well as their BEE level (there are, of course, too many who simply either do not care or are resentful of the fact that they are required to transform).
But is transformation only a numbers game? In our view, organisations can only really talk about transformation when there has been a mindset change at the core and at every layer of the organisation. Otherwise, we are really only talking about a form of fronting or window dressing.
How does one measure the success of transformation besides looking at the numbers? How does one measure mindset? Some of the signs that true transformation (outside the numbers game) has taken root, and that substance is more important than form, include, inter alia:
- Previously excluded individuals feeling that they have a real (not imaginary) seat at the table. In other words, their opinions matter and their voices are heard. There is a real understanding that they bring the views of an important constituency to the table, as well as great insights due to their life experience. This would effectively counteract the notion of decision makers going into groupthink in an echo chamber. However, many women, for example, report that when they try to put a thought on the table, they find themselves ignored; their voices drowned out, being cut off in mid-sentence, or worse, their ideas repackaged as if they originated with a male counterpart;
- Diversity candidates do not find themselves being told what their opinions should be, and are allowed to formulate their own thought processes around strategic issues. When transformation is only about the numbers, those who are appointed as part of a fronting or window dressing exercise can find themselves being briefed, often shortly before a meeting, on what the “party line” is, in the guise of “bringing them into the fold” or “bringing them up to speed”;
- Diversity candidates are not expected to assimilate into spaces created to suit white males. For example, having to take up a sport like golf, which might not interest them in the least, because the real decisions are made on the golf course or in the fabled 19th hole. Having to conform to patriarchal rules in order to be accepted in the fold is often a reality for diversity candidates. For example, fear of being ostracised may force a female leader to emulate male behaviour or refrain from speaking out, thus nullifying the objective of diversity bringing fresh perspectives;
- Diversity candidates do not find themselves in situations where they are clearly diminished in relation to their dominant counterparts. For example, where a male and female board member both have PhDs, the male member being addressed by his title, while the female member is addressed by her first name in a clear effort to diminish her status;
- Diversity candidates not finding themselves excluded from important discussions that take place outside of formal meetings. For example, male members discussing and making decisions on organisational matters in a pub, while ensuring that the female members are not invited, or knowing they have to rush home to their “second job” of running a household;
- Everyone is being treated the same way. Diversity candidates often find their mistakes are amplified and a big deal made of them, while their dominant counterparts sail through a culture of silence, even when they make much bigger mistakes;
- Diversity candidates not feeling that they are being ridiculed behind their backs or given demeaning names intended to embarrass them. For example, assertive women are often labelled “aggressive”, while assertiveness in their male counterparts is celebrated;
- Diversity candidates do not view themselves as being there to provide a diversity flavour to the organisation and little more, but rather as part of the organisation’s core. One can only speculate on whether the black colleagues in the Clicks saga hadn’t spoken up as a result of being afraid they would be ostracised;
- Diversity candidates who ask tough questions and hold power accountable not finding themselves replaced by more malleable diversity candidates. This pernicious practice is particularly toxic in arresting substantive transformation. It seems pervasive in both the private and public sectors, where sometimes one would hear talk of “career-limiting move” (code for “don’t rock the boat” or “go along to get along”) when a diversity candidate plays the diversity role for which she is in the organisation in the first place. Once that culture sets in, true transformation is a pipe dream.
- From what we have observed, South Africa is hostage to this pernicious culture. Human resource departments are supposed to ensure that policies are in place to prevent the problem, but instead many seem complicit in the factors that contribute to it.
- Perhaps internal audits should be done on the culture and recruitment practices of the organisation, and provide the board with assurances on whether or not transformation has already taken root. That way, accountability for transformation sits squarely with the board, and any failure could be grounds for delinquency under Section 162(5) of the Companies Act, 2008.
- As for shareholders who lose out when reputational damage hits the organisation’s bottom line – they get the boards they deserve. They appoint the board members after all, and if they don’t ask the right questions at the AGM, they too are to blame;
- The leadership has the courage to address policies (written and unwritten) that stand in the way of true transformation, e.g. disparity in reward systems and what gets measured;
- The leadership has the courage to ask the difficult questions of those who want to do business with the organisation, around their progress on substantive (rather than just race and gender numbers) transformation.
Shifting organisations from a patriarchal system to one where the value of diversity is truly embraced and harnessed is a leadership issue. Great leaders understand that to achieve a true mind shift takes effort and real interventions, not just lip service.
Those interventions include helping the beneficiaries of privilege to deal with their fears and insecurities in the face of losing their status as the superior ones in the organisation. It includes assisting people in understanding their biases, subconscious biases and prejudices, and how to overcome them. It also includes being very deliberate in the recruitment process and ensuring that the organisation looks for people who are open-minded and will proactively work against patriarchy and racism. It is generally not an easy road to travel.
In order to achieve real transformation and create a diverse team, workforce or board, effective interventions are needed to transform the mindset of those who are used to being the dominant power players. Only when those who have always seen themselves as superior fully appreciate how their own biases and prejudices stand in the way of meaningful transformation – and why transformation is necessary – can the organisation start to move in the right direction. If that does not happen, people become despondent at the obvious window dressing and either end up leaving or treading water without making ripples, which in turn prevents the organisation from enjoying the benefits of diversity.
Astute leaders are able to discern what is playing out in their organisations and ensure that all voices are heard, and that credit goes to where it is due. The diversity candidate may not put the idea on the table like the dominant group would, but a great leader has the ability to listen, spot the value in what is being said, and interpret it for the rest of the group.
It does, however, ask of leaders to have the courage to face the biases and prejudices within themselves first. You cannot truly lead transformation if you have not confronted the barriers to transformation within yourself. Those who are able to tame their own demons and lead transformation from an authentic space, with a deep understanding of the necessity of transformation, are able to bring about meaningful transformation that transcends window dressing.
Leading in the midst of diversity is a skill.
One must develop the skill of understanding different realities; be able to look through different lenses, and lead the group to find the best solutions as a way of ensuring that every voice is celebrated as valuable.
Leaders must also go beyond celebrating numbers and test their environments to determine whether real transformation has taken place. Unless the organisation’s heart is transformed, its outer appearance will soon ring hollow. DM