Diversity in Executive Search and Leadership Consulting

Diversity has long been a cornerstone of the profession, but something changed in the aftermath of the killing of George Floyd on May 25, 2020. “It was almost like a sledgehammer to the head, a wake-up call to the opportunity we had as a profession to truly be leaders.” Karen Greenbaum, President and CEO of the Association of Executive Search and Leadership Consultants (AESC) describes what happened within the leadership of AESC. “Clarke Murphy, the CEO of Russell Reynolds, sent me a text at 7:00 am on a Friday. I won’t forget it, with the headline ‘Black Lives Matter’ saying, ‘can we talk?’”

Greenbaum immediately called Clarke back, and within a few days, they were convening a meeting of the CEOs of some of the largest and most influential search firms. “We had eight CEOs who came together, all competitors, all CEOs. We had some of the largest firms in the world represented. We had the largest woman-led firm represented. We had the largest Black-led firm represented. And we decided that what we wanted to do is begin by creating a CEO pledge, pledging the commitment of our member firms to diversity and that we wanted to quickly follow that pledge with action because we knew that a pledge was not enough.”

The AESC Diversity Pledge

“We share a commitment to combat racism, prejudice, and discrimination within our own organizations, with candidates and the clients we serve, and in our communities. We pledge to use our collective voices and actions to help create a world that is inclusive, diverse, equitable and accessible for all."

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They also developed an action plan to give teeth to the pledge, predicated on themes of accelerate, educate, advance, and advocate. “In order to sign the pledge,” Greenbaum explains, “you have to submit to AESC your plan, what you are actually doing. Those who have signed the pledge have fulfilled that obligation. We have well over a hundred firms who have signed the pledge.” Greenbaum explains that these plans are carefully reviewed and if the plans are not robust and actionable, they are returned with the message, “do better.”

Greenbaum calls attention to AESC’s publicly accessible IDEA Powered Leadership page on the organization’s website. “IDEA stands for inclusion, diversity, equity, and access. And this is just a highlight of our many actions. We have always included diversity in our Code of Professional Practice. It has always been a commitment of our profession, but we know we can do more.”

Some examples of AESC’s recent leadership include:

  1. We launched a North American Diversity Leadership Council with experts from member firms to help guide us in our focus on meaningful, impactful actions.
  2. AESC’s November global conference tapped diversity and inclusion thought leaders from the world stage. Greenbaum says, “We had chief diversity officers from Facebook, Centene, NBC, Nike and Salesforce. We had John Amaechi, OBE, a highly respected UK-based leadership consultant, we had amazing executive women in STEMM from Australia, India, South Africa and Italy. We had Dr. Tony Byers, author of The Multiplier Effect of Inclusion, and the former chief diversity officer at Starbucks. “We are focused on education for our members. We know it starts with ourselves, our own organizations,” Greenbaum says.
  3. BlueSteps, AESC’s career service for executives, will be leveraged globally with new actions that will more rapidly build a strong, diverse database of executives including the next generation of leaders. This will benefit AESC members, their clients and the candidates they are seeking, particularly the next generation of diverse candidates around the world.”
  4. AESC’s first-annual IDEA Award recognized leading-edge work of members in inclusion, diversity, equity and access (or IDEA), as well as those who are doing work with underrepresented communities to advance social justice.

Greenbaum says, “It’s exciting and energizing to see how much we have accomplished already and I know that in 2021 we will continue to make a real impact as we help create a world that is inclusive, diverse, equitable and accessible for all.”

DEFINING DIVERSITY

Creating a culture of inclusion and belonging is important worldwide. But the lens from which we look at diversity itself varies around the world.

“Diversity means different things in different places.” Tina Shah Paikeday leads Russell Reynolds’ global Diversity & Inclusion advisory services as a senior member of the Leadership & Succession team. She says, “The U.S. issues today are largely focused on race and ethnicity, whereas in Europe, squarely, the issue is women.” She adds, “As we think about the LGBTQ population, we can’t talk about that in certain parts of the world as openly as we do in the U.S.”

Pauly Rodney, Senior Vice President and Head of Diversity, Equity and Inclusion at Raines International agrees that “it’s a different conversation outside the U.S. and the expectations are not the same.” He says, “There are some countries where gender is at the forefront of the conversation. Others where the diversity discussion is tied to socio-economic status. Still, other countries that are overwhelmingly one ethnicity, but the conversation is about geographic location and skin tone.”

Shah Paikeday adds, “The problem around diversity and inclusion, it’s almost a first world problem to some extent. As countries are developing, there are more basic survival needs that companies in those regions are thinking about.”

DIVERSITY IN THE PROFESSION

Greenbaum notes, “Our pledge begins with our own profession. As a profession, we have made enormous progress in terms of gender diversity around the world—although there are still some countries where progress has been slower. It’s more challenging to measure other aspects of diversity—visible and non-visible—because we lack a tracking mechanism. But we know that we as a profession have work to do in terms of all aspects of diversity represented especially in our more senior consultant ranks.”

In the Asia Pacific region, Shah Paikeday says, “For Western headquartered executive search firms, the challenge is focusing on the local talent and how do we recognize the difference in leadership styles that may be prevalent because of cultural norms, so that we are grooming locals to be in leadership positions in major search firms.”

One way to talk about diversity that transcends the differences among countries is through the lens of inclusion. “Inclusion is that universal umbrella that enables us to talk about the issue globally and in every region,” Shah Paikeday explains. “The caution that I give there is that in some places, hierarchy is actually so important that the notion of everybody having voice and influence doesn’t necessarily lend itself, take China, for example, where hierarchy is expected and valued. Whereas ‘belonging’ is a sense that somebody could be their true selves, no matter what background they have and that, that I believe is a universal concept and the way that we can talk about the same topic all over the world.”

At a minimum, Rodney says, “Let’s start with the principle that there should be no barriers to entry based on gender, race, ethnicity, nationality, sexual identity or orientation, et cetera. Then let’s adapt that principle to each of the markets and the countries that we operate in, because each location has a specific priority to these issues.”

OUR PROFESSION HELPS CLIENTS DRIVE DIVERSITY

AESC members around the world are helping their clients accelerate the diversity of their leadership teams while helping them understand the importance of creating an inclusive culture.

“I think that I’ve never experienced a busier time in my career in terms of doing this work,” Shah Paikeday says. “It pervades everything from the work that I’ve done for a very long time, which is developing diversity, equity, inclusion strategies and programs, to being asked about this in every single search that I’m working on.”

For Rodney, “Each day we hear stories of what people are forced to endure due to their race, gender, orientation, or nationality. These experiences have been commonplace for decades—generations even. Corporations are responding with ‘we had no idea our employees and customers felt this way or were going through this!’ Each year, those companies spend billions of dollars on executive search and leadership consulting. This is one of the few industries that can have a meaningful, measurable impact if corporations wanted to move the needle on DEI. More corporations should start demanding minimum DEI metrics from our profession, and judge us on that.

Greenbaum “recognizes the impact we can make as a profession.” She says, “We are taking a leadership role, and we are proudly doing that, and we are making a difference. We’re not the ultimate deciders when it comes to selection, but we can have a huge impact both as trusted advisors and in the way we find talent. Every day we are strengthening diverse leadership and those leaders can change the world.”

DEI & TRANSFORMATION

For clients and firms, this new energy is both transformative and necessary.

The template for progress is already available in existing operations. For Shah Paikeday, “Diversity, equity and inclusion need to be run the way we would run any other part of our businesses,” including with strategy, structure, resources, leadership and governance. “The last piece is accountability: what are the metrics of success, and where are we today? Let’s baseline them and project goals for the future, then put mechanisms in place to hold leaders accountable to those goals and make them very specific and tied to, eventually, performance evaluations and bonuses; really incentivize doing it right,” she says.

Inclusive cultures are also essential for organizations to derive the full benefit of thriving, diverse teams. Shah Paikeday explains, “In the work that we do on building inclusive climates, leaders in the organization are going to have the largest ripple effect throughout the organization because everybody is looking at them. They are the role models that will signal that this is what we want people to do. It definitely starts with senior leadership. Middle managers are incredibly important because that is what the day-to-day employee really experiences. And then finally, new hires. I think that if this is something that’s important to an organization, really embedding inclusion as a core value is important. And certainly not only having those conversations with new hires, but selecting for inclusive skills and values in the first place is going to be really important.”

What about the claim that there is a scarcity of diverse candidates qualified to fill leadership positions? Rodney calls out that kind of excuse making. “Let’s stop saying depth of candidates don’t exist just because those candidates are not within our immediate network. We don’t need to know every up-and-coming female GM candidate in aerospace and defense, but we shouldn’t be more than a phone call away from a diversity leader who would know. We don’t need to know all of the up-and-coming people of color in tech, but let’s be plugged into the National Society of Black Engineers. Let’s be plugged into relevant groups for women, Latinx, and other demographics.”

Greenbaum adds, “The point is that we need to challenge ourselves to look more broadly, and tie in to more diverse networks. For example, in the U.S. and maybe around the world, there’s an association for everything. There’s even an association of association executives. There’s an association of black engineers. If you’re looking for engineers, you should be looking at the members of the association of black engineers. There are associations representing women executives, whether they’re women in finance or women executives in general. If you’re building your networks and becoming aware of who are these groups in your community, in the broader network around the world, you’ll be looking in different places and finding talent that maybe others might not have found.”

The best consultants and firms are relentless and resourceful when conducting a search assignment. Rodney observes, “If you want to have a new chief marketing officer in tech and the person at Google or Facebook or Amazon isn’t going anywhere, you don’t give up the search. Find out who’s up and coming, who are they mentoring, which companies are similar to them, or who has a similar trajectory.”

“So why do we give up on diversity? We can’t. We have to stop doing that,” he says.

Greenbaum explains, “We get hired to help clients find that hard-to-find talent. That means that we are looking for those who are not easy to find, whether it is diverse talent with specific expertise, or digital talent or the next generation of leaders, and it’s often a combination. We need to understand the client requirements, ensure that we are looking broadly and openly, and that we are identifying not only the 'tried and true' obvious choices, but that we are able to find candidates who can bring a fresh perspective to their role, and who may have a different set of experiences but an equal or even more relevant set of capabilities.”

THE COMPETITIVE TALENT ADVANTAGE

There is a cost to giving up on diversity and great value in pushing through.

Talent that doesn’t see diversity in an organization’s leadership, whether as a path for themselves or as a reflection of the organization’s values, that talent has other options. “Here, we’re operating at the upper echelons of the corporate world. And the loss-potential is that the best talent is at risk of not being secured at the top of the house,” Shah Paikeday says.

Greenbaum adds, “Remember, top talent has choices. We need to help our clients understand the importance of having a diverse and inclusive culture in order to attract the very best talent.”

There is a high cost associated with failing to fully include talent in an organization. Shah Paikeday says, “We’re just leaving all of that talent on the table and unrealizing the potential for getting the best ideas to the table at scale. We’re leaving the most difficult problems to be solved without the diversity of thought that comes from different lived experiences.”

Greenbaum has traveled around the world, and notes that, “In some countries, gender diversity is taken very seriously and in other countries, it’s woefully behind.” The problem then for local companies is competition from multinational corporations. Greenbaum explains, “Multinationals are typically the organizations that are driving diversity because they have a global mandate, but that means that in some countries, all the best women are going to multinationals and locally owned, large businesses are missing out on half the population. And this is the case for all aspects of diversity, not just gender diversity. The more inclusive you are in your organization, the better chance you have of attracting and retaining the very best talent.”

What are the implications for those local companies? “There’s always a shortage of the right talent to drive innovation, transformation and change,” Greenbaum says.

It isn’t enough to have the requisite profiles on the team. “If you don’t change your culture, you won’t get the best talent because the best talent has choices. If you don’t have an inclusive culture where people can have a real sense of belonging, that talent isn’t going to go to your organization. No one wants to be the one token person. They want to be part of a diverse group,” Greenbaum says.

“And the next generation of leaders, we’ve done research on this for years, the next generation of leaders is insistent upon it. They see this as the way the business should be, and they don’t want to join an organization that doesn’t look diverse. Greenbaum warns, “You’re going to miss out on the best talent if you don’t have a truly diverse, inclusive culture,” she says.

At one level, the argument for diversity and inclusion is simply dollars and cents. Rodney explains, “From a business perspective, we know that companies who have diverse leadership do better than those that do not.” Citing Harvard Business Review data, he says, “corporations that are the most gender-diverse perform better than companies in similar industries that are the least gender diverse. There’s a notable difference among the companies that are in the top quartile of ethnic diversity versus those that are in the bottom quartile of ethnic diversity. Companies do roughly 33% better with gender and ethnic diversity than those who do not. We’re literally leaving money on the table.”

THE ROLE OF ALLIES

How can colleagues contribute to the inclusion and advancement of underrepresented groups? First, recognize that if you are in the dominant, majority population at work, your experience is not the same as the underrepresented, non-dominant population.

Every marginalized person in a workplace has anecdotes, whether it’s expressing an idea that’s ignored only to have someone else run with it, being overlooked for key projects and assignments, or having to adapt in order to better fit in with the dominant employee profile. That profile isn’t necessarily bad, it’s just dominant. And it’s much harder for someone who is different to bring their whole selves to the workplace, feel able to fully engage at work or leverage the tremendous benefit of their unique perspective.

“No one is intentionally wanting to behave badly,” Shah Paikeday explains. “There is a lack of recognition that one’s background may dictate the level of social capital that one would have within the organization. We’re commonly talking about it as white privilege, when it comes to race. I would say let’s just call it privilege.” For example, Shah Paikeday describes the power of her credentials. “I went to Stanford business school, my first job was at McKinsey and Company, and I can carry that CV with me wherever I go, and I often do open what I’m saying with those things, because it lends me some credibility.”

“And I think it’s just an awakening,” she says. “Whether it’s me or the straight white male, there are certain places where I’m going to have more social capital than somebody else.” How people use their privilege is a form of allyship. “We can play to amplify somebody else’s voice when they don’t have that privilege in the room.”

Rodney believes that allies are essential to driving change. “Protesting—literally marching in the streets—is viewed differently when it’s not only Black people marching. Let’s take a page from the LGBTQ+ campaigns and actively enlist the help of 'allies.' I don’t have to be gay, lesbian, or bisexual in order to know that living your truth matters on a human level. The burden of ensuring women’s rights shouldn’t just fall on women. One shouldn’t have to be Black, Latinx, or Asian to talk about racial and ethnic equality.”

“More promotions and paths to promotion won’t be achieved if only the excluded people ask for them,” he says. “There’s a role for allies: to amplify a message that we already know is right. Until people in power start seeing folks who look like them demanding change, it’s not going to happen.”

IMAGINING CHANGE

What does genuine diversity, equity and inclusion look like for organizations?

Shah Paikeday says, “When we finally achieve diversity, equity and inclusion, the way in which organizations are led will reflect all of the perspectives of those who are being led.”

For Rodney, “I long for a world where any little kid growing up can look at the leadership of businesses and see somebody who looks and identifies like they do, and they know that the only barrier to them being able to achieve that is how hard they’re willing to work. I want a world where my daughter could look up and see, yeah, I can do that because there’s somebody else that’s already blazed that trail. And nobody’s going to tell her, ‘you can’t do that.’”

And the role of search? “We’re one of the few industries that can make a meaningful impact,” he says.

DARING TO BE BETTER

Greenbaum dares the profession “to challenge ourselves to be innovative and creative and look outside of our normal places for people in underrepresented groups, because that’s how we build our networks. And underrepresented groups could be women. It could be people of color. It could be anything. I like the term ‘underrepresented’ because who is underrepresented in Japan is different than who is underrepresented in Brazil, which is different than who’s underrepresented in South Africa. And women might be underrepresented, or maybe they’re not, maybe they have parity in your country. So, if you think about looking at underrepresented groups and getting to know people and building and expanding your own networks and building your network so that you really are looking more broadly, that will be good for you. And it’ll be better for your clients. Remember also that it’s not just about diversity—it’s also about a culture of inclusion and belonging. And it’s about fairness and equity.”

“We can make a real difference—in our own firms, with clients and with candidates,” she says.