"Any time you bring together diverse perspectives, it just creates a bunch of potential that you weren't really expecting."
Bringing Together Diverse Perspectives
With such strong cries for change, it’s more important than ever to consider new perspectives on age old traditions within our firms and across the profession. Tapping into the power of diversity in the workplace can enable firms to capitalize on new ideas and solutions going forward. Be mindful, it is much more than bringing together professionals from various ages, races and genders. The true magic happens when you can tap into the unique insights and talents of each individual to help your practice:
- Embrace new ways of working
- Consider new service offerings
- Keep the firm and its professionals relevant
- Create new career paths
- Build inclusive cultures that embrace the entire team not just a chosen few
This is why we are taking a closer look at the issue of diversity in this month’s Feature Focus. Inside you can:
- Explore the critical role it can play in moving your firm forward
- Learn about some of the issues that could be holding your firm back
- Take a look at tools and resources already available to you as a PCPS member
What’s Behind it All
If your practice is like many, its leadership is already spending valuable resources to consider new ways to do things. Did you know US companies are spending millions on diversity programs and initiatives? Here is some of the reasoning:
- Diverse teams outperform homogeneous ones because the presence of group members unlike oneself causes people to think differently (Kellogg)
- Decades of academic studies have shown that socially diverse groups are more innovative than their homogeneous counterparts (Brazen)
- When people from different backgrounds, genders and races come together to solve problems, they bring with them different information, opinions and perspectives
- This mix of perspectives:
- Enhances creativity
- Lends itself to a fuller understanding of market issues
- Leads to more fresh ideas and spontaneous breakthroughs
- Gender and ethnically diverse workforces perform financially better (McKinsey – Diversity Matters)
- 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
- Companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians
- There is a linear relationship in the US between racial and ethnic diversity and better financial performance (McKinsey – Diversity Matters)
- For every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8 percent
- A diverse and inclusive workforce is necessary to drive innovation, foster creativity and guide business strategies (Forbes - Fostering Innovation Through a Diverse Workforce)
- Multiple voices lead to new ideas, new products, new services and encourage out-of-the-box thinking
- A diverse and inclusive workforce is crucial for companies that want to attract and retain top talent (Forbes - Fostering Innovation Through a Diverse Workforce)
- Competition for talent is fierce in today’s global economy, so companies need to have plans in place to recruit, develop and retain a diverse workforce
Advances for Women
As we examine diversity, let’s take a look at some recent breakthroughs for women. Good news. More women are replacing male CEOs. The number of women who took over CEO roles increased for the third year in a row in 2016, according to research from Challenger, Gray & Christmas. Of 1,043 CEOs that were replaced in 2016, 193 (18.5%) were replaced by women.
There has also been a shift at the top of the industry’s largest firms. In 2015 Cathy Engelbert was named as CEO at Deloitte and Lynne Doughtie was named as CEO at KPMG. EY recently announced the appointment of Jane Steinmetz as its Boston Office Managing Principal and the New England Markets Leader. Steinmetz will be the first woman to lead a Boston area-Big Four practice. Kimberly Ellison-Taylor who serves as global accounting strategy director for Oracle America is the chairman of the AICPA board of directors. She is the first African-American and fifth woman to hold this role.
In a Catalyst report entitled The Bottom Line: Corporate Performance and Women’s Representation on Boards, researchers found that Fortune 500 companies with the highest representation of women board directors performed better financially than those with the lowest representation of women on their board of directors. The companies were measured on three important measures:
- Return on Equity: The female-friendly companies outperformed the competition by 53%
- Return on Sales: Companies with more women on their board saw a 42% higher return on sales
- Return on Invested Capital: Perhaps most tellingly of all, the companies with more women board directors turned invested capital into profit 66% more successfully
As the world recently celebrated International Women’s Day, many CPA firms took to social media to share messages of support, document progress and outline plans their practices are working toward in the areas of women and diversity. State Street Global Advisors installed a bronze statue of defiant girl in front of Wall Street’s iconic Charging Bull statue. ‘Fearless Girl’ statue is part of a larger initiative to put more women onto corporate boards. Following the installation they sent letters to thousands of companies on the Russell 3000 index asking them to take action to increase the diversity of their boards.
As your firm looks to tap into diversity, beware of an important factor creating a bit of havoc in the equation. Unconscious bias or implicit bias is a bias we have of which we are not in conscious control. This bias occurs automatically, triggered by our brain to make quick judgments and assessments of people and situations based on our background, cultural environment and our experiences. Our brains form fast judgments and assessments without us being consciously aware that the judgments and assessments are being made.
A type of unconscious bias known as affinity bias or similarity bias could be a leading cause perpetuating the cycle of men outnumbering women in leadership positions according to Business Insider UK. Affinity bias happens when people seek out those who share similar backgrounds, group memberships or experiences. Research shows this may lead people to favor candidates who are like themselves.
Many firms are working to change unconscious bias in the workplace. The first step involves making people aware that unconscious bias exists. This can include starting conversations on the subject and holding training sessions around it. Although not an easy or quick fix, this awareness will help reshape the way others see the world.
Three Powerful Steps to Propel Your Firm Forward
If your firm has been successful in building a diverse workforce that is great news. But there may be more work needed to tap into the firm’s full potential. To maximize your results, consider these proven strategies in your firm.
1. Start at the Top
If your firm wants to change the way it operates, it must start at the top. Those individuals in key leadership roles are responsible for setting the tone in your practice. Your employees look to them for clues about what is really important. Your team can tell if something is just another passing fad by observing leaders’ actions and their attitudes. Gather needed support for your diversity initiatives long before they are presented to the firm.
- Will firm leaders truly give diversity the proper support it needs to succeed?
- Will they really work to help everyone in the firm feel a sense of inclusion?
- Are they open and willing to hear new ideas and new ways of doing things?
- Are they supportive of reworking tried and true systems or are they just going through the motions to appease up and comers until it’s time to retire?
2. Strive for an Inclusive Environment
Just because you bring in a diverse team does not mean each member of this team will feel welcome or a true sense of belong in the organization. There is no worse way to jeopardize employee engagement than having an individual feel as though they were brought onboard simply to fill a quota. If you want to engage each member of your team, it is critical to make everyone feel welcome.
- Does your firm have an inclusive culture?
- Is this a goal for everyone in your firm?
- Does each employee in your firm feel equally welcome?
3. All voices are Important
While making everyone feel welcome is an important step, it alone is not enough. For diversity to have maximum impact in your practice, it is essential to tap into the insight and talents of each member on the team. Keep in mind your employees must feel their opinion is important before they will share their ideas.
- Hold collaboration and new idea sessions
- Work to include everyone into focused conversations
- Give everyone the forum to share their thoughts
- Make these discussions safe and welcoming
- Let employees know you hear and appreciate what they have to say
Diversity Tools for Your Practice
As your firm looks to expand its diversity initiatives, know the AICPA has a number of tools you can tap into right away.
- Accounting Inclusion Maturity Model
- Use this model to help your firm assess its current diversity and inclusion efforts. The model evaluates your firm’s current diversity and inclusion efforts based on four core areas:
- Community and Supplier Relations
- The Accounting Inclusion Maturity Model assessment is designed to be completed by multiple teams across the organization including human resources, marketing and finance. After completing the assessment, firms will have access to a summary of results indicating their diversity maturity.
- Recruitment and Retention Toolkit
Once your firm completes the Accounting Inclusion Maturity Model, you and your colleagues may find it helpful to reference the Recruitment and Retention Toolkit. This toolkit helps leaders understand how attracting, recruiting and retaining a diverse workforce can help them better achieve their companies’ overall talent, recruitment and retention goals. What’s more, it provides an outline of steps helpful in jumpstarting diversity and inclusion initiatives within an organization and provides a useful template to assist firms in implementing changes.
- Diversity & Inclusion Webcast Series
This webcast series provides an opportunity for practitioners to increase awareness, knowledge and skills to attract, retain and advance diverse talent through the career life cycle. The webcasts provide a deep dive into topics such as unconscious bias and workforce diversity.
There is a lot of good progress that has been made in the area of diversity but there is still more work to be done. Here’s to finding effective ways to tap into the uniqueness and diversity of each individual on your team to drive change and help propel your firm forward.