BEYOND DIVERSITY: THE BUSINESS CASE FOR DEVELOPING AN INTERNAL CULTURE OF INCLUSION

Philip Dundas

Diversity and inclusion (D&I) are on the agenda for most organisations in terms of recruiting a broad talent base. But it is increasingly recognised that the diverse and inclusive perspective you get from that workforce can enrich the internal DNA of a company. This helps to shape its strategic goals beyond the thinking of senior leadership across the whole organisation. In the global marketplace the most innovative companies recognise that to impact on their strategic goals, diversity isn’t just about the range of people within an organisation but the diversity of thinking that reflects.

Equally important as an organisation is how inclusion connects to diversity: your ability to reflect the world around you in your workforce is just the start. The 2014 Deloitte report Global Human Capital Trends, clearly defines ‘diversity of thinking as a business imperative’. Diverse teams draw out better ideas, smarter conversations and ultimately better business decisions.

Lots of organisations have identified inclusion as a bedrock of innovation and to that extent drive and foster the diversity and inclusion agenda across their sectors, seeing how it can shape and transform their organisations and their people. It’s not always in the most obvious places that D&I shapes the way businesses function. Well-managed and effectively implemented D&I policies emerge through a much wider range of issues; from how to adapt the built environment for workability and getting the most from a cross-generational workforce to understanding the implications of working globally and the importance of inclusive leadership.

The benefits of D&I go way beyond compliance into every aspect of a business. From senior leadership right down to graduate entry employees, an inclusive organisation relies on the diversity of thinking from an ever inclusive workforce to be ahead of the game.

Narda Shirley

A young female delegate at the Economist Energy Summit on 4^th and 5^th November was overheard to remark that the audience in the room was unusually diverse. Energy is one of the industries that still struggles with diversity. Anecdotally it seems, if you haven’t done your time on an oil rig (or other heavy engineering equivalent), it will impact your ability to climb the career ladder. This can be an issue for women, which is in turn an issue for the industry which is desperate to build new engineering talent pipelines.

In our business as comms advisors, it is very often the case that what we learn working for one client, gets applied in other contexts. So it was with the Lloyd’s insurance market Dive In Festival of diversity & inclusion still very much in mind, that I set off for the Honorable Artillery Company to help tweet from day one of the conference on Wednesday.

For my money, the two stand out speakers on the agenda on day one were women. Dorothy Thompson, CEO of Drax Power spoke to the Economist’s Energy Editor, Edward Lucas about the wood pellet-based renewable energy side of the business, Drax Biomass. She made a compelling case for biofuels, explaining where the wood for the pellets comes from, the advanced technology in the supply chain that compresses and transports the pellets and the parity of the fuel with coal in terms of performance.

The final slot before drinks went to Dr. Michal Meidan of China Matters, an energy consultancy. She gave a masterclass in the use of data points that consistently supported her comments and observations, keeping the session bubbling along as she discussed China’s energy mix in consumption terms and the future for gas, with her own engaging energy and style.

Of course it’s not only gender, but cultural diversity and age that can bring new perspectives to foster innovation. Two entrepreneurs stood out in particular on both counts. Mytrah’s CEO Ravi Kailas gave a compelling interview about how his wind power business is creating new capacity for the national grid across 6 states in India. And young entrepreneur and Bio Bean founder Arthur Kay (who was studying architecture when he had the idea) explained how waste from coffee is being used to generate power in his innovative UK based business.

Over drinks, conference sponsor BP offered delegates the ultimate ‘millennial’ young gamer innovation experience, the chance to try on Oculus Rift virtual reality headsets for an immersive experience of their exploration and R&D. As you can see from the photo, it was an offer I just couldn’t resist.

The Economist Energy Summit 2015 certainly helped the industry present a more than usually diverse face to the audience. It will be interesting to see which stories and spokespeople get picked up in the final round-up of the reporting to see if the media also found merit in the diversity of voices and views on offer.

Managing a mixed-use real estate development on the scale of Garden City – 200 homes, 25,000 sqm of office space, a hotel, a 3 acre park and the largest retail mall to date in East Africa – means dealing with a complex community of suppliers. So, when it came to PR and marketing support, the Garden City team were looking for a simple and complete solution.

Gong’s ability to field a combined team of PR specialists and design from Gong Creative, based in both London and Nairobi, enabled us to partner with Garden City on all its mar-comms requirements.

We refreshed the Garden City logo and created a striking new slogan and visuals to capture the sheer variety on offer. A new website and social media channels mean Nairobi residents have been able to watch the buildings rise from the ground as well as find out about letting and sales opportunities.

At the end of May 2015, the long-awaited shopping mall finally opened, to great acclaim. On-the-ground, Gong secured front-page trailed Financial Times coverage as well as extensive local media news for the event. The FTreported that Garden City provided the perfect location and was the “right partner” for shopping giant Walmart to finally enter the Kenyan market – previously “a prize beyond its reach.”

Renny Popoola

2015 has seen lots of noise around the emergence of new challenger banks in the UK with much being said about the potential for emerging firms to take on the big players and provide a credible alternative for consumers. The outlook for the sector looks promising. Whilst Metro bank was the first business to obtain a full banking licence in 150 years, 6 new banks have been authorised since 2013 and dozens more on the pipeline.

Clearly, the industry is aching for a game-changer. A company, firm or idea that reinvents the way the public engages with firms and delivers banking and financial services to customers that is relevant and accessible.

We have seen such game changers disrupt the leisure industry (AirBnb, Housetrip), transport (ZipVan, Uber), communications (WhatsApp, Skype), entertainment, (Netflix) and to some extent health (Myfitnesspal, Fitbit). Most have become leaders in their own sphere paving the way for a new wave of brands to offer a traditional service with a modern twist.

With systemic changes occurring in many other industries, it does raise the question- what will be the financial industry’s uBer?

The digital age has completely revamped most spheres of our life in an enormous way. But, the impact on how we bank, invest, insure and save has been relatively minor. Whilst the concept of financial advice has undergone some change with comparison sites and online forums, many other facets of financial services have yet to experience their digital awakening.

This is surprising considering that we’re repeatedly reminded about customer dissatisfaction with financial services.  The fact remains, barriers to entry are significantly high despite the regulators’ efforts to encourage innovation and competition. Obtaining authorisation is more often than not a long and expensive process.

Historically, disruptive financial brands have tended to be spin offs or marketing exercises from the larger players. For example, whilst Sheila’s Wheels innovated how insurance could be marketed, it was part of the HBOS group. Even firstdirect, regularly heralded as a game changer in the UK banking sector due to its reputation for customer service, is owned by HSBC.

It’s not a surprise that innovation within the financial industry comes mainly from established players, but it does highlight the difficulty for outsiders to reinvent the market. To some extent, the increased regulatory and capital requirements placed on financial services providers for consumer protection is the biggest hurdle to true innovation in the sector.

What we are beginning to see are individuals, once part of the establishment, looking to shake up the industry.  We’ve seen Nutmeg founded by former stockbrocker Nick Hungerford,  offering an accessible alternative for wealth management, and Stockopedia started by a former investment manager, allowing DIY investors to beat the banks.  With the recent shake up of the pensions industry, such alternative investment services are likely to experience increased demand.

In banking, new players like Atom Bank, Starling and Fidor aim to capture market share through offering digital services. Again, what unites these brands are founders with significant experience with the big players exploring gaps in the market to innovate.

Financial services are still some way off from experiencing its version of Amazon, completely turning the industry on its head. There is a possibility, because of the risk involved within the sector, that it will never experience such upheaval. What is increasingly evident is that if such digital innovation is to happen, it most likely will from within- be it an experienced individual who wants to change the status quo or even a traditional firm with new ideas on offering financial services.

Narda Shirley

One of the defining characteristics of challenger brand start-ups in the food industry is that they are unencumbered by legacy. They can source from where they like and the entrepreneurs behind the brands can lay down any number of guiding principles that give their brand a feel good factor that helps it stand out. Whether it’s good for the environment, good for producers, good for you, or a combination of all three.

‘Doing the right thing’ and ‘making a difference’ are often cited by entrepreneurs as their driving motivation for the hard graft of getting a new business off the ground. So it’s vital that they weave that ethos into the brand communication, making their values part of their business DNA.

But what happens to these small companies when they grow? How hard is it to maintain an ethical stance that is pragmatic and profitable at scale? Is the cycle of growth and sale to a larger, deeper pocketed company in part about being able to afford to stay true to your founding values? Or is there always a compromise once the entrepreneur cedes control to a bigger corporation?

We took a cursory peek at 3 British brands that have sold out – in each case ending up in the hands of US corporations.

Husband and wife team Craig Sams and Jo Fairley launched Green & Black’s in 1991, the first Fairtrade chocolate in the UK, sourcing directly from farmers in Togo and Belize who were rewarded with higher prices for using environmentally sustainable practices. Green & Black’s worked with William Kendall’s then private equity firm, Nemadi which engineered a sale to Cadbury in 2005 (which in turn was acquired by Kraft in 2010). An interview with Fairley in 2013 revealed that Green & Black’s Head of Sustainability went on to do the same much larger job at parent brand Mondelez. Fairley also cites Green & Black’s influence as the reason Cadbury first went Fairtrade with Dairy Milk setting off a domino effect that also saw KitKat and others follow suit. So it would seem in this case, that an early adopter challenger brand became a Trojan Horse change agent inside the major brand that acquired it.

Pret a Manger hit on a successful formula based on principles of product freshness, avoiding additives. Pret also started its own foundation to help feed the homeless. In 2001 McDonald’s bought a third of the business, which was later sold to private equity firm, Bridgepoint. In the meantime, McDonalds has successfully turned its own brand credentials around in terms of building a reputation among consumers of having an ethical supply chain. But back then, the perceived differences in values perhaps helped prompt this quote from Pret that “McDonald’s has never had any day-to-day role in Pret, nor has it had any say over what we do, nor how we do it.” (NB. Julian Metcalfe, one of Pret’s original founders went on to open Itsu. Proof perhaps that there’s a certain type of entrepreneur for whom once is not enough).
Paul Lindley founded Ella’s Kitchen, the UK’s bestselling baby food company, without a shred of retail or food industry experience. He did however have a background in media and children’s brands from Nickelodeon. He is quoted as saying “What has always driven me is the idea that business has a responsibility to be good for society.” Founded in 2006, Mr Lindley sold to US food company Hain Celestial for $103.5m last year. Hain’s main website offers up a slightly dated CSR Report from 2012, but it is front and centre on the home page which at least demonstrates the emphasis the company puts on its sustainability credentials.

In each of these situations, the challenger brand has led with its values and sustainability message. As an entrepreneur growing your own business, you get to decide what you stand for, and how you communicate it, without having to justify it to analysts or shareholders. It’s heartening to think that brand values that were once perhaps viewed by the city as a potentially costly indulgence by entrepreneurs are now increasingly priced in at a premium when it comes to a sale.