REUTERS | Henry Romero

The importance of inclusive leadership

The COVID-19 pandemic has altered the way that we work and accelerated changes that might previously have taken ten years. Leaders are being challenged to adapt at the same pace, and the consequences of failure are significant. For example:

  • Top performers leave.
  • Staff burn out.
  • Claims of harassment and bullying increase.

These outcomes will contribute to lower employee engagement, be obvious to clients and show up in financial performance. It is not possible to revert to business as usual. To succeed, leaders must remove limits on their thinking and look to the future. We believe the way forward should focus on inclusive leadership.

What is inclusive leadership?

Inclusive leadership is an approach that ensures all voices are heard. It means being simultaneously curious and self-aware around difference. It involves fostering high levels of trust, articulating a clear purpose and seeking out different views to inform better decision making. Inclusive leaders create psychological safety that enhances motivation and drives business performance.

We believe that inclusive leadership will replace command-and-control as the dominant approach to leadership over the next five years. This outcome relies on establishing a clear model for how to be an inclusive leader and the ability to measure inclusion. It also means holding leaders accountable for the organisational climate, not just financial results.

Better outcomes for everyone

The case for employees to be treated equally and with respect should not require a performance justification, but for many CEOs and boards, it does require a business case. Inclusion is good for business; companies who treat people inclusively have seen this repeatedly. Employees who work in a climate of inclusion are more connected to their work and have a greater sense of belonging. This leads to higher levels of wellbeing and resilience across the organisation, which are key inputs for the sustainability of business performance.

Studies by McKinsey show that inclusion, not just diversity, is the key to achieving high performance in already diverse organisations. However, knowing this, and doing something about it, can be hard to reconcile. The responsibility for creating an inclusive workplace lies with senior leaders; they must be role models in their organisations. Satya Nadella, CEO of Microsoft, demonstrated this clearly when he said:

“We are at our best when we actively seek diversity and inclusion. If we are going to serve the planet as our mission states, we need to reflect the planet. Inclusiveness will help us become open to learning about our own biases and changing our behaviours so we can tap into the collective power of everyone in the company.”

Psychological safety: the leader matters

Consultants Bourke and Espedido found that the most critical element determining whether an individual feels included in the team is the leader’s behaviour. A recent McKinsey study of 15,000 professionals found that:

“When employees feel comfortable asking for help, sharing suggestions informally, or challenging the status quo without fear of negative social consequences, organizations are more likely to innovate quickly, unlock the benefits of diversity, and adapt well to change – all capabilities that have only grown in importance during the COVID-19 crisis.”

Creating psychological safety is the key to inclusive leadership. When every member of the team feels sufficiently safe to speak up and challenge prevailing ideas and norms, organisations experience better outcomes by all measures, including:

  • Employee engagement.
  • Employee retention.
  • Innovation.
  • Customer satisfaction.
  • Financial performance.

Time for talk to become action

The search for what comes next in leadership is important. There is increasing evidence that inclusive leadership has some of the answers to the challenges laid down by the COVID-19 pandemic and other global challenges, such as climate change. Let’s take a lesson from the recent failures of the command-and-control approach that contributed to disasters from the emissions fraud at Volkswagen to the global financial crisis in 2008. It is not a stretch to say that these events may have been averted if employees and teams at all levels had felt able to speak up and leaders had been actively listening.

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