Why is diversity important for a company?
I‘ve actually dedicated a lot of my time and energy to this topic and I’ve been very passionate about it for more than 15 years. I have to say that, sometimes I am totally overwhelmed in a positive way to see the evolution. Honestly, I was hoping to see a revolution and faster changes for about 10 to 15 years, but as I got deeper into the topic, I understood that it is far more complex. It takes a lot of change and transformation of individuals, teams, and of society. These are aspects that are not easily changed, this is because it is connected to how people were raised, to their values, their religion, and to their biases. That said, it is increasingly more visible that this is a very critical topic.
Over the past 5 years, I have seen more and more companies publicly stating that diversity and inclusion is important. It is becoming a vital part of social sustainability. It’s also becoming part of being a responsible business. It‘s good to see all the initiatives related to ESG; the Environmental Social and Corporate Governance, and of course by viewing the letter S from this acronym we know, diversity, equity, and inclusion plays a huge part in that.
So why do I believe it is important?
There are many aspects as to why it is important. Let’s start with the company’s perspective. Today it is obvious that if a company is able to create an inclusive environment, where everyone can truly feel like they can be themselves, this has many positive aspects. Many researchers have proven that diverse and inclusive teams have better, long-term sustainable financial results. They are better able to successfully connect with their customers. They can innovate better, and more effectively. They can really build very appealing and interesting customer values and in turn long-term relationships with their customers. If you have more diverse teams which work in an inclusive environment, they offer different ideas, opinions, propositions, and innovations.
If you have inclusive leadership in a company, they know how to get the best out of their diverse team. This results in better service and better propositions for customers and a more sustainable business model from a long-term point of view. In this working environment, people feel happy. Every company is struggling with attrition and with the ability to retain key people. It is a top priority for every company, to not only have in place the best people but also keep and hire the best people. Diversity, equity, and inclusion are the conditions that everyone is asking for now. Millennials are probably dominating most of the workforce, but Generation Z is also now beginning to emerge, and we have generation Alpha due up which will change it even further. For these employees, it is important to be part of a company that focuses on this and if the company does not, they will leave. So that’s another aspect, which is important, not only from the company perspective but also from the employee perspective. Added to this is the individual perspective. You can really be much more yourself in an inclusive environment. You can utilize your talents. You can work well with your energy. You are accepted for who you are and what you can bring to the company.
This has been proven through research that employees are much happier, more balanced, and have a greater sense of well-being. They have a better performance in the overall ecosystem which is working not only for the company but for the group of employees and the individual. Plus, it is more fun working in such a team, which is critical from the team dynamic point of view. Last but not least, I would also mention the impact this has on the community and society as a whole. If the community and society are able to manage and embed the principles of diversity, equity, and inclusion, it will be a better place to live. Research indicates that countries which focus on this, are more stable and prosperous from an economic point of view. Also if you look at the happiness index from these countries, this topic reaches through all aspects of life from the personal to the professional and to the societal.
How could leaders impact the social mobility? What is your strategy to boost the social mobility?
I think it’s a wonderful question because not many people are talking about social mobility when we talk about diversity, equity, and inclusion. It’s an important topic because we can talk about horizontal mobility, vertical mobility, intergenerational mobility, and upward mobility. Companies and corporations and their leaders can have a substantial impact on social mobility. Let me give an example. I think Home Credit is very well positioned on this because our business model is focusing on improving the lives of potential and current customers. We are supplying consumer loans to the areas of society who are actually financially underserved. What I mean by that is, these are the groups which normally would not get any financing or funding by a traditional financial institution or a bank. We provide the loans, for example, to start their business, to buy a scooter, to start a pizza shop, or any other business.
Our business is actually very much focusing on the emerging markets and on the social mobility within it. This is a huge topic which resonates with me, and we spent a lot of time on that under the umbrella of our ESG which is extremely important for us. I believe corporations and companies play a tremendous role in that. As a leader, you can do a lot within the company, but also as an individual considering some charity work, or working with NGOs. I don’t only mean financial donations. That always works well if the money is used for great activities, but people can really do a lot within learning and development, helping people who may not be socially so well positioned to really get, for example, a better education via different training and workshops. This will help them to move socially on a different level. I would also mention here the importance of financial literacy, specifically as it relates with our business and business model, for people who struggle economically and want to move towards better conditions, and a better life. It is critical to increase the knowledge of financial literacy.
We as a company pay a lot of attention to it. There are many activities, which each company can do to contribute to social mobility. I am extremely proud of what Home Credit is doing in that space and how active we are. I do believe, we are the front-runner in all of our markets.
Another good example can be working with young adults to help them to understand their potential and talents by giving them a good chance to join our company and work on their professional career and development. We have many cases like that in our emerging markets. These young adults who become successful professionally are then supporting their families and broader families, which in turn has a positive impact on social mobility.
How do you measure the success of the diverse teams?
It’s important to work on building up the awareness of diversity within the company. So what really works well, is if each company starts to collect data on how diverse the teams are and what types of diversity is represented in the organization. Showing the data can have quite a substantial impact, because then people understand what level of diversity they have in the company. This is quite motivational for the leadership, to move forward on this topic. So, let’s measure the data about diversity and equity and then ask how do we measure the success of the diverse team?.
I would encourage all companies, if they don’t do it already, to frequently measure the engagement and satisfaction of the employees with all kinds of different views. Companies can get a lot of good input on the success of the diversity team, because it’s about cooperation and collaboration, about giving each other feedback, and also learning from mistakes made. That’s the internal view of how diversity actually works. In addition, you need to always look at the type of the team, the targets, and the objectives that each team has. Based on that, you will see how successful the teams are. It’s a combination of KPIs and objectives, and how the teams are delivering on that. Then, each organization can establish certain benchmarks and standards to make comparisons. They may also compare the fulfillment of different KPIs between different teams and compare the level between the less diverse teams and more diverse teams. There is no doubt, that diverse teams and those teams which are working in an inclusive environment, are faster to deliver better, and stronger financial results. They are more innovative. They adapt faster to change. They build on each other. They utilize each other’s strengths and talents. That is something that each company should think about independently and design how the success of each diverse team should be measured.
How could leadership encourage conversations around socio-economic inclusion and social mobility?
It needs to be the part of the culture. Each company has its own purpose. The focus on inclusion, socio-economic inclusion, and social mobility is very deeply connected to its purpose. While you explain the company’s purpose and the impact of each employee which he/she can have on the purpose, I think it’s very inspirational to connect it with social mobility and socio-economic inclusion.
Leadership needs to articulate clearly: This is our vision, this is where we want to be active, this is something where we want to contribute, and fully we engage with. Then, there needs to be a concrete and clear action point; what does it mean specifically, what the company will do and how to implement frequent communication to provide updates for its employees.
It‘s about creating and increasing the awareness of the topic. I think it always works best if the CEO and the top leadership act as role models.
You can do a lot through communication. You can organize, for example, Town Halls, which will focus on it. You can organize different webinars, which may have panel discussions where different leaders both internal and external whom you invite, may share their views and opinions and then provide concrete examples on the topic. It’s about being able to articulate it and then making it clear and visible within the company.
How diverse thinking supports the growth?
If we talk about growth, we can view it from an individuals’ intellectual growth or from the prosperity and financial growth of the company’s point of view. Diversity, being curious, being open to different views, being open to learn, and being able to accept that my view may not be the best one. Having the strength to say, “I made mistake and I have learned from that”, is the growth mindset that each company should really focus on cultivating, and not to be stuck on a fixed mindset. Without a growth mindset, companies will not have long-term success and development, and will probably die.
As a snr. leader what is your responsibility in creating diverse thinking in the company culture?
I see this from two aspects. I see it from my individual level and then I see it from the company level and my role as a leader. Each person, no matter which role you play, can influence and does influence the company culture. You do this by how you act, how you speak and communicate, how you deliver results, the business language which you use, and how you make decisions within the company etc.
Each person co-creates the company culture. If the focus is on diverse, inclusive thinking each person can contribute into that. Each person should take the responsibility to create self-awareness and assessment, as to where they are and ask themselves:
Is this where I am strong?
Do I really understand what it means?
Do I understand my weaknesses, my mind bugs, my biases?
Do I understand my behaviour, and my emotions?
Because if I’m strong on that, I can shift this awareness onto others. Then it is about being respectful. That’s how you can contribute to diverse thinking. If people are respectful with regards to diversity, to the differing opinions of others, if they are truly listening and trying to build on it, or if they are able to say I’m wrong and this is an interesting view which I would never think of, you then contribute to the diverse thinking on a daily level.
But I would also encourage everyone, in addition to strengthening the self, to have an awareness of others. If you are experiencing situations where you see that other people are pushing their views, are not listening well or they don’t understand the team dynamics of the current situation, please take the initiative, and help to create awareness of that. I notice many of these situations on a daily basis and people just accept it. Of course, it can be uncomfortable to say, “Listen, maybe you are being too pushy with your view. Let’s try and listen to the other people’s thoughts.”, it is vital to express this. Maybe you see that the person is quiet and not able to speak out because they do not feel comfortable, then try to encourage the person to share their view. Try to create an environment or atmosphere where people can really feel psychologically safe to share their different views, debate, brainstorm, and build on each other’s differing views, in a healthy way. Because, if that dynamic is happening, then diverse thinking will take place and in turn will create an optimal space for different ideas and different opinions to be put on the table. This is the magic for innovation, where the best solutions happen. That is the case for the individual side. On the other hand, with the leadership side, you can of course do the same, but as a leader, you have even more responsibility. You must take authority for yourself and for your own behaviour because you have a liability to the team and to the company. You should be a strong promoter of diverse thinking and a diverse environment. You should advocate for managing the dynamics in these discussions and the themes, promote active listening and promote respectful leadership, debate and brainstorming. You need to be the person who will be creating the trust and psychological safety at work.
Diversity and inclusion isn’t just the responsibility of the HR, it is a leadership responsibility? What is your advice to leaders in creating strong foundation of Diversity and Inclusion practices?
Diversity, equity, and inclusion should not only be the responsibility of the HR department. HR is there to support, facilitate and coordinate because it influences the culture, the working environment, the engagement, and satisfaction of the employees. This strongly relates to the employer brand, and to the employee value proposition, which every company is actually trying to create. This has a positive impact on the health of the company. It needs to be the focus and responsibility of the top leadership who need to be the key role models in advocating for that.
I have seen in my professional life, that if you do not have dedicated leadership who passionately believe in these issues and who will not push for it, will not then see it happen. It is all about the culture and it is about both talking the talk and walking the walk. You can achieve anything from all levels, for example, from HR, but if it isn’t supported fully by the leadership, then it will not be successful in the end. Leadership will do anything if they know why they should do it, feel connected to it, and if they can create a passion for it.
The long-term sustainability of each company is truly connected to these issues. Each leader should understand why this is important and what benefits the company can have from that if they implement actions that strengthen and improve diversity, equity, and inclusion within the company.
I have noticed that if there is a passionate advocate for these issues within the company this person must find a strong bonding point or story to really bring leadership on board. Then the leadership will understand why it is important, what benefits it will bring and what will happen if the focus will not be dedicated to that.
To conclude; it is important that if this is a top priority for corporations and companies that are performance-driven then they need to communicate it and translate it clearly in order to make their KPIs and then have it as part of the management’s performance. I’m a strong believer in that what gets measured, happens.
Renata Mrazova
Chief People Officer at Home Credit
About Renata:
Studied at the University of Economics, Prague, specialization Finance and Business, graduated in 1995.
She began her professional career in the finance division of Swedish pharmaceutical firm Astra (now AstraZeneca), later as Finance Director, coordinating a merger with the British firm Zeneca.
At the end of 2005, she accepted an offer from Israeli investors to become CEO and Chairman of the Board of Directors of Direct Insurance.
In the next period she devoted to her family and family business, which is the largest company in fabrics industry in Czech and Slovak markets (retail, wholesale and e-commerce) and also worked as the external consultant on several projects for the banking and insurance sector. In September of 2009 she returned to the ING Group and worked as Chief Financial Officer again (currently NN Group) As of August 2015, she moved to The Netherlands at the position of Global Head of HR of NN Group in The Hague, responsible for strategical HR over 18 markets. In May 2019 she moved with her family back to Czech Republic, and joined Home Credit International, a.s. (part of PPF Group), global leading consumer finance, as Group Chief People Officer She is a proud mother of 2 daughters, Anna (19) and Eliska (14), and is married.I‘ve actually dedicated a lot of my time and energy to this topic and I’ve been very passionate about it for more than 15 years.
