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While gender diversity is still at the forefront of external search assignments and internal succession programs for leading Australian companies, a recent Association of Executive Search Consultants (AESC) panel on “Cracking the Bamboo Ceiling” has reaffirmed ‘cultural diversity’ as a critical lens for leadership succession.With seven out of Australia’s top ten export markets in Asia, our success as a country is already inextricably linked to Asia. When you consider that Asia represents a vast market for potential expansion with consumer demand worth US$10 trillion annually (similar to the US), companies are further understanding that fostering diverse talent from the top-down is not just a goal for equality, but has the potential to shape an organisation economically. Despite the potential, many leading Australian companies have failed their Asian-expansion strategies, or at least failed to optimise those strategies, in recent years largely for this reason: a lack of Asian-centric talent in their senior ranks.
• Only two CEOs in the ASX100 are from non-Anglo Saxon backgrounds, namely David Teoh of TPG (Malaysia), and Sandeep Biswas of Newcrest Mining (India); and
• Only 4% of Board Directors and less than 2% of Senior Executives in the ASX200 identify as having Asian cultural origins.
• It allows insights in, and connections to, new markets
• It helps foster innovation; and
• It brings new perspectives.
Taking a leaf from the gender diversity book, one tactic seen to foster ethnic diversity up the corporate ladder is to institute voluntary targets. For example, when Australian boards committed to adding female leadership, the percentage of female directors on ASX200 boards doubled in four years, from 8.6% in 2010 to 17.6% in 2014.
Defining Cultural Diversity
The crux of diversity is that it develops differing and unique mindsets and ways of thinking. While people born from different countries will inherently bring different ways of thinking, the problem with including western, Anglo-Saxon executives of non-Australian countries of origins in these “ethnically diverse” target data sets, is that their mindsets are inherently similar.
Tracking what it means to be ethnically diverse is one of the more difficult issues as at first it must be properly defined. There are many ways to do this be it country of birth, country of family heritage, country of childhood, adolescence, or university, language or religion. Yung Ngo believes that at its essence, “cultural perspective is defined as how you define yourself”. Three of the Big Four accounting firms adopt this idea by instigating voluntary surveys which ask staff to self-identify cultural (and other forms) of diversity.
Redefining ‘Cultural Fit’
While it is clear that organisations need to embrace diversity in leadership beyond gender, one of the biggest challenges that companies face is that the internal promotion of their diverse workforce and external executive search and recruitment activity often comes from looking through a “cultural fit” lens. While technical skills are highly sought after at the graduate level, for more senior management roles, hiring managers tend to accentuate EQ, personality and cultural chemistry with recruitment and promotion. The problem is that this can reduce diversity through the hiring process and lead to a homogenous workforce, whereby new recruits and internal promotion goes to ‘like-minded’ individuals, as opposed to people who would bring a diverse lens to the business.
While cultural diversity targets are increasingly at the forefront of senior management, to foster an engaged and collectively-driven workforce “the common denominator should always be talent”, says Yung Ngo. “We need to recognise and promote talent equally. But at the same time, we need to challenge how we look for talent.”