A crisis is a terrible thing to waste. It gives the world an opportunity to create a new way of doing business; a more inclusive and collaborative way that depends on a global mindset,” said Beth Brooke, Ernst & Young’s Global Vice Chair of Public Policy, Sustainability and Stakeholder Engagement during a visit to Japan in March. Indeed, opportunity in adversity and strength in diversity were two key messages that Brooke, voted one of the 100 Most Powerful Women in the World three years in a row by Forbes, was keen to impress upon Japan and to the Journal during an interview.
Originally from Indiana, Brooke was one of the first women to work in Ernst & Young’s Indianapolis office in 1990. In 1993, during the Clinton administration, she was appointed advisor to the president within the Department of Treasury and also sits on boards of various charitable organizations such as the National Women’s Leadership Hall of Fame Advisory Council.
Brooke, 49, spent the last few years crisscrossing the globe in an effort to advocate equal opportunity for women. Pre-Lehman crisis, Brooke hoped that the strength of her reasoning alone—that diversity makes for a more robust organization—would carry through to the corporations that she visited in countries yet untouched by the effects of the credit crunch. But it seems that the financial meltdown may help this message resonate with a sense of urgency.
The idea that a global mindset—with its broad-based thought processes and inclusive ways of thinking—is a prerequisite to recovery is not new. But at this year’s World Economic Forum at Davos, the notion “became more mainstream,” says Brooke. There were discussions around the issue of gender and more focus on women as an emerging demographic for sourcing talent, decision makers and customers.
Also, a good number of CEOs in attendance acknowledged an insufficient understanding of this demographic. It was at Davos that Brooke, and Ernst & Young, presented their commitment to the business case for the adoption of “a diversity of perspectives, and for empowering diversity within the company” to address new and unique challenges. According to Brooke, this means “a more balanced view of risk and opportunity.”
Backing up her ideas with sound and convincing research, Brooke cited mathematical certitude and statistical significance to illustrate the power of diversity as a strategy for success. It was found that diverse groups consistently outperform homogenous groups, by a substantial margin. This held true even if the homogenous group members are among the best and brightest. This perspective is based on the findings of Scott Page, a professor of complex systems at the University of Michigan at Ann Arbor.
In his Diversity Prediction Theorem, he found that “the collective ability of any crowd is equal to the average ability of the group, plus the diversity of the group.” Diverse groups experience creative friction. It’s this creative friction (not conflict) that can lead to different ways of representing a problem, of solving a problem and eventually to better decision making. Thus, in an environment where a competitive advantage depends on continuous innovation, adopting diversity as a business strategy is not only the right thing to do, but the smart thing to do.
When Brooke talks about diversity, she is referring to those human experiences that are based on differences in age, cultural background, education, professional training, and personality. This life experience differential affords a corporate team a unique perspective that is now fundamental to business success in the new global marketplace.
Brooke also believes in giving back to society. In addition to public service, she has been involved in community work with Technoserve, an organization devoted to helping entrepreneurs in developing countries, and a focal point of Ernst & Young’s Corporate Responsibility Fellows Program. One mission reminded her first hand of how important it is to recognize that different people notice different things.
During her recent ACCJ presentation, she told a story about a family whose primary source of revenue was their small chicken farm in a remote village. Brooke and her team managed to provide them with sustainable energy support in the way of solar lanterns. When they asked the couple where they wanted the lanterns positioned, the husband quickly responded, “In the living room, bedroom and kitchen.” But the wife, after a long pause, said, “One must be placed with the chickens.” She understood that the light would help the chickens to produce more, as well as keep predators away, and that in turn was good for the family. Different perspectives for sustainable solutions.
The key to diversity as business strategy is finding and keeping talented individuals who are comfortable with different perspectives, and who understand the notion of creative-competitive collaboration. Expect to find talent in unexpected places because, “The good news,” says Brooke, “is that talent, not opportunities, is always equally distributed.”
In fact, the other message that Brooke brought to Japan and to the ACCJ was that women, being over half of the world’s population, are the largest and most accessible diversity group. Women represent a huge economic force in emerging and developed markets and can act as a catalyst for growth.
But in Japan, with so few key role models promoting diversity, the opportunities to highlight the value of women’s experience and perspectives are limited. In many instances, women are not valued for their talent, but rather as a ready supply of part-time workers, or as a target market. As consumers, Japanese women can make or break a brand. But in the boardroom, they are barely visible. With women representing only 3 percent of senior management positions and 15 percent of board seats in America’s Fortune 500 companies, Japan is not alone in this regard.
Yet results of research studies by the Conference Board of Canada, the Catalyst group’s 2007 report titled “The Bottom Line: Corporate Performance and Women’s Representation on Boards,” and McKinsey’s 2007 study titled “Women Matter,” all confirm that the more women there are in senior management positions and on corporate boards, the more opportunities there are for better performance. According to Brooke, however, “Just giving a seat to one woman or minority voice is not enough. Critical mass is essential to experience any impact from diversity. This would mean for example at least three women on management committees of an average membership of ten persons.”
Of all cultural (national, corporate, and familial) barriers that may serve to prevent the inclusion of women’s potential in the global economy, corporate culture is the easiest to change. Determined, passionate and competitive, Brooke has had the benefit of access to excellent mentors along the way. Now in a position to inspire and to lead, Brooke offers words of advice from the field. For any leader embracing the issue of diversity, Brooke recommends, “Present the undeniable research, an evidence base on the benefits to outcomes from diversity. Then create a safe environment to discuss the unconscious biases that we all have. Discuss openly our social programming and how that causes us to stereotype. Make the conversations safe. Be a leader in them. Acknowledge your own biases and judgments. Lead the dialogue on a sustained basis.”
And for those who want to be the change, she suggests that they, “Believe in the research. Have confidence. Seize leadership roles rather than waiting to be asked. Ask for a leadership role, otherwise you will be ignored. Seek allies in the message. Celebrate leaders who understand the value of diversity and exhibit it. Call out those who don’t. At the end of the day, people value outcomes. Produce them.”