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Creating a diverse and inclusive culture at the leadership level has been shown to attract, motivate, and retain top employees, as well as to increase the success of an organization. The sports industry as a whole has long since attempted to solve for the lack of diversity in critical senior roles and yet no real progress has been made. In order to be most effective, leadership teams must match that of their target audience; fans, consumers, and athletes alike all come from very different backgrounds in every sense of the word and the current makeup of leadership teams in the industry does not reflect that.
Before diving too deeply into the analysis of why change has been slow, it is important to first define diversity.
In the simplest terms, diversity should mean brining to the table as many varying perspectives and experiences as possible. Such a broad definition can, however, be detrimental in the early stages of change because diversity at such a broad characterization will likely mean something different to every company, group, department and function.
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“ She followed all my directions. It was really easy to contact her and respond very fast as well. ”
That challenge means that starting out, each organization should define a more specific and tangible definition of diversity, which in the current landscape means focusing on bringing in and retaining more women and people of color, specifically.
Unfortunately, as companies try to strive towards progress, they are continually focusing on the end result, and not considering what it truly takes to get there. In order for lasting diversity and inclusivity to be achieved, a cultural shift is the only real path forward.
Changing the culture of company that is already established is an uphill battle, but it can be done as evidenced by what the women at Nike have begun to do; an example which I will discuss further throughout this paper.
There is a substantial amount of literature available on the importance of diversifying leadership teams, which helps to provide some context to the history of the topic. Outlined below are some key takeaways from this research.
Diverse leadership teams can provide countless benefits to an organization; in a study run by McKinsey, researched showed that “Companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians” (Hunt, Layton, & Prince, 2015). The report also found that when examined from the gender diversity perspective, these companies were 15% more likely to have financial returns over competitors. Furthermore, at the senior executive level, the report found a 0.8% increase in EBIT for every 10% racial and ethnic diversity increase. Another analysis conducted by Credit Suisse found that companies who had a least one female sitting on the board saw higher returns on equity, as well as on net income growth in comparison to organizations that did not have any female board members (Hunt et al, 2015). Interestingly, the research showed that “racial and ethnic diversity has a stronger impact on financial performance in the United States than gender diversity” which the author’s accredited to previous efforts around increasing gender representation in senior leadership positions having been already successful (Hunt et al, 2015).
Financial performance is just one of the many benefits that a diverse leadership team can have on a business; research also shows that diverse teams are actually smarter than homogeneous teams. In an article titled Why Diverse Teams Are Smarter, the Harvard Business Review states that “diverse teams are more likely to constantly reexamine facts and remain objective. They may also encourage greater scrutiny of each member’s actions, keeping their joint cognitive resources share and vigilant (Rock & Grant, 2016). The same article also notes an added benefit of innovation. Results from several studies cited in the article show that culturally diverse leadership teams also increasingly developed new products over businesses run by homogeneous teams.
Another important benefit is around attracting and retaining top talent to an organization; “companies with higher gender diversity at senior levels are more likely to provide role models for high-potential women, allowing them to fill impending shortfalls of talent, and retaining or attracting the most qualified people to serve in leadership positions” (Seo, Huang, & Han, 2017).
The benefits really can span all areas of the business as well. Richard Lapchick of The Institute of Diversity and Ethics in Sports (TIDES) discusses in an article for ESPN some of the advantages of this on the press side. Civil rights activist, Rev. Jesse Jackson eloquently explained to Lapchick that "many people do not fully appreciate the value of having ethnically diverse journalists that can to help tell the story from a culturally sensitive perspective, and also capture the interests of a wider sports audience (Lapchick, 2018).
The lack of diverse leadership teams at the executive level is not a new problem; substantial literature exists going back more than 20 years (including work by DeSensi (1995), Doherty and Chelladurai (1999) and by Fink and Pastore (1999)) – so the question then becomes, why has progress been so slow? The answer to that question is a complicated one which can vary depending upon the piece of the problem you are looking at. In general terms, one of the issues that has contributed to the slowed progress is “the emphasis on the desired end state — an organizational culture that values diversity and capitalizes on the benefits such differences can bring to the workplace. Unfortunately, sport organizations today typically do not embody these characteristics” (Cunningham and Fink 2006). Without significant systematic organizational change, one cannot expect a true culture shift.
From the gender perspective, in Creating and Sustaining Gender Diversity in Sport Organizations, George Cunningham argues that the lack of women in senior leadership positions today is at least partially due to old stereotypes that marginalize women in the sports industry, which has actually caused the issue to become an institutionalized practice (2008). Cunningham also aims to explain how to create and sustain these desired states of diversity, which he sites as being missing from previous literature. The proposed solution is around a detailed change process that breaks these biases, stemming from pressures created by social, political and functional shifts.
While there has been some progress for gender diversity in the workforce as a whole, some of the positive research and literature touting this advancement can be misleading. For example, while some progress has been made for women as a whole, when you look more specifically at the numbers for minority women holding executive roles, the same level of advancement is just not there. “When it comes to minority women, the numbers are much, much lower: Black women represent just 8% of the private sector workforce and a dismal 1.5% of senior leadership. Hispanic women represent about 6% of the workforce and 1.3% of leadership” (Zarya, 2016). When you group all women together in one static, progress can be slowed, as the seriousness and severity of the issue does not get fully addressed.
Another cause for slowed progress can be found around the fact that the law can come in play with diversity hiring. In accordance with the U.S. Equal Employment Opportunity Commission (2006), “an affirmative action plan implemented by a public sector employer is subject to both Title VII of the Civil Rights Act of 1964 and the Equal Protection Clause of the U.S. Constitution” (DuBois, 2016). With the exception of the NFL and the Rooney Rule (NFL teams are required to interview at least one minority candidate for all open head coach and general manager positions, (Stites, 2018)), the sports industry has not actively created any “soft” affirmative action policies that could help make positive change. These “soft” policies “that are designed to change the composition of the candidate pool, rather than criteria used during the hiring process, could be a viable option for firms seeking to increase diversity at the executive level” (DuBois, 2016).
This is more than just a gender issue. While the aforementioned Rooney Rule shows that things can be done to promote change, the fact remains that the numbers are not moving for everyone. As the Harvard Business Review states, black Americans are still heavily discriminated against when it comes to hiring decisions, of which a decline has not be seen in the past 25 years (Quillian, Pager, Midtbøen, & Hexel, 2017). One of the key reasons we haven’t seen change in this area is that “even as we are confronted with dramatic examples of ongoing racial tensions, most white Americans remain convinced that race is no longer central to one’s opportunities in life” (Quillian et al, 2017).
The numbers really are alarming; “current statistics show a lack of diversity in corporate boardrooms—in 2012, only twenty-one Fortune 500 CEOs, a mere 4.2%, were minorities” (Dubois, 2016). These numbers are just as, if not more troubling, when looked at for the sports industry in particular. A recent report released by The Institute for Diversity and Ethics in Sport found that women and people of color in leadership positions in college athletics were highly underrepresented, and without any efforts to solve this problem. The report found that “89.2 percent of presidents were white, 83.1 percent of athletic directors were white, 87.4 percent of faculty athletic representatives were white and 100 percent of conference commissioners were white. In those positions, 72.3, 77.7, 59.3 and 90 percent were white men, respectively” (Lapchick, 2017).
What Steps Have Been Taken in the Industry Thus Far?
The sports industry has been attempting to rectify this problem for quite some time and so it is important to look at some of the work that has already been done in this space. In a 2009 article from the Journal of Sport Management, author George B. Cunningham states that “every major professional sport organization within North America has at least some initiative in place aimed at either improving the culture of diversity within that particular context or increasing the representation of members of traditionally under-represented groups” (Cunningham G. B., 2009).
Arguably, one of the most substantial and actionable plans was put for by the National Football League (NFL) with regards to the aforementioned Rooney Rule, but others have made efforts as well. In 2005, the National Collegiate Athletic Association (NCAA) appointed Charlotte Westerhaus to head up the newly created Office of Diversity and Inclusion in an attempt to improve diversity at all levels (Cunningham, 2009). The National Hockey League (NHL), in keeping with their mantra of “Hockey is for Everyone”, recently hired Kim Davis to help improve diversity at the senior leadership level, as well as improve fan culture which has historically been adverse towards players from minority groups (Davidson, 2018). Major League Baseball (MLB) launched a “diversity fellowship program” last year focused around recruiting women and people of color into the organization (MLB, 2018). The leagues are not the only place that have focus here either; Nike has long touted strong efforts on this front, but in light of some recent negative and very public employee testimonials (Germano & Lublin, 2018) and subsequent departure of Antoine Andrews, the company’s Vice President of Diversity and Inclusion (Reuters Staff, 2018), it is clear that even as steps are taking, truly shifting the company’s culture will take time.
With so many companies making diversity a focus, the question then becomes how does change actually happen? Unfortunately, research shows that it is not as easy as just opening up the dialogue or starting committees; for real, long-term results to be felt significant action must be taken. In his field study, Cunningham focuses on the how versus the just the desired end result and as he further points out, this is an important first step that often gets missed. Cunningham also cites the importance of “a clear articulation of the impetus for the change” (2009). Additionally, bringing up research by Oliver (1992), Cunningham discusses the importance of deinstitutionalization and the impact of political, functional, and social pressures in order to affect change.
Sports historically also have certain bias’s built into the established structures as they have traditionally been looked at as masculine. In some of her work, Laura Burton examines the importance of breaking down these biases. She focuses her research on three key areas; marco-level research (looking at the innate masculine “norms” inherent in sport), meso-level research (looking at organizational structures, stereotypes, and issues of discrimination), and micro-level research (looking at how individuals manage their own experiences) to make her examinations. Ultimately she finds that not enough work has been done around this important topic of how change will take place and determines that “Scholars must also continue to recognize that gender as an organizing principle in sport needs to be considered along with other forms of identity, including race, sexual orientation, class, and ability” (Burton, 2015).
While there is a substantial amount of research available on the topic, as Burton denotes, there is a distinct hole missing around the practical side of how change happens, which is where the answer of a culture shift comes in. It is also beneficial to examine what helpful methods of transformation have been used in the past and compare them to what is needed today given the current landscape of the industry, in order to create a successful plan for change.
Almost every large company today has some sort of diversity program in place, and yet most are unable to demonstrate any significant change within their organization. In fact, some of the most common practices used have actually caused the needle to move in the wrong direction all together. Outlined below are some best practices that companies, no matter their current position, can adopt.
Employee resource groups (ERG’s). When it comes to making diversity and inclusion initiatives successful, the inclusion piece needs to be considered just as seriously as the diversity piece, if not more. That means that employees, no matter their background, must feel a sense of belonging within the organization, and this is where many companies can fall short. They work hard to bring in a diverse mix of employees, but then most companies do not follow through and set these employees up to succeed.
One way to achieve inclusivity is by encouraging employee resource groups (ERG’s), which are also sometimes referred to as affinity groups. These are employee-led, volunteer based groups of employees with shared interests, and backgrounds (including groups based on gender, race and/or ethnicity). Some common examples ERG’s are groups for black, Asian or Latin employees; LGBTQ; working parents; next generation leaders; and these are just to name a few. It is important that these groups remain as inclusive as possible and welcome all those who share the desire to be a part of the group, which should include allies of these groups. If the groups are restricted in any means the entire intent and benefit can become compromised.
Executive referrals. Referrals, especially at the executive level, are a very large part of hiring. Different companies put different emphasis on referral programs, but they all tend to share one important setback; unfortunately, a vast majority of executive referrals tend to match the demographic of the person referring the candidate. That means that if you have an executive leadership team that is mostly white, there is a very strong chance that they are likely referring white candidates. While this is of course not exclusive, and is also not necessarily intentional, it is still a known issue that needs to be looked at. Since most referral programs have incentive based ties to them, one great way to combat this problem is to add on extra incentives to those who refer diverse candidates that end up getting hired.
Internal mobility. Diversity hiring is historically more successful at the junior levels (see Figure 1). The numbers tend to get worse as the role increases in seniority but there is a fairly easy way to combat this. Skilling-up employees is an excellent way to increase buy-in, improve retention, and to diversify leadership teams. You can do this by offering training, either in the form of traditional learning, or as job shadowing to employees who want to either grow in their current disciple or even change focus areas. This is an extremely effective method of improving diversity at senior levels because companies are pulling from a pool of candidates, having the benefit of already knowing what type of employee this person is. Additionally, by investing in the employee and allowing them to learn something new improves moral and the likelihood of retention.
Defining the soft skills. A way to help hiring managers embrace internal mobility, is to help them to define the soft skills needed in the position they are hiring for. Interestingly, “The biggest skill gap in America today isn’t cloud computing or data science. According to new LinkedIn data, the biggest unfulfilled need of American businesses right now are people who can communicate and connect with other people” (Petrone, 2018). What this means is that employers need to hire for the soft skills (like the ability to communicate effectively) which is a great sell for skilling up employees internally who already have these soft skills, but it also helps open up the candidate pools externally as well. Many hiring managers fear the unconventional and only want people who come from within the same industry, but if you are able to demonstrate that a candidate has demonstrated the soft skills, it might be easier to convince them to hire from a less traditional industry and thereby actually make a smarter hiring decision.
This also helps to diversify teams. Looking at leadership in the sports industry, which has been historically predominantly white and male, if future employees are only selected from within that restricted pool, it will be difficult to make a change. By looking outside of the traditional candidate profile, you will open up a search to a much wider and diverse slate of candidates, which will benefit everyone.
Changing The Culture Of Company That Is Already Established On Nike Example. (2024, Feb 28). Retrieved from https://studymoose.com/changing-the-culture-of-company-that-is-already-established-on-nike-example-essay
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