Living Institute consults companies on leadership that promotes diversity and gender equality. Heidi Rottbøll Andersen, Founding Partner and Kasper Jelsbech Knudsen, PhD and Chief Consultant share their thoughts on the trends and developments that impact the direction in which leadership is evolving.

What is the importance of diversity in future leadership?
Heidi: We see the importance of diversity primarily in two areas. First, in the increasing intergovernmental demand for sustainable developments of Corporate Social Responsibility including human rights as formulated in the UN SDGs. Living up to these demands requires a broad representation of different people on the top levels of every organisation and company. The second is what we call ‘the business case for diversity’; meaning that those companies that have cracked the code for making diversity work in their favour consistently outperform companies with less diversity. Diversity is in this sense a strategic business imperative.

What trends in society will change our perception of leadership?

Kasper: It is impossible to overlook the negative and sometimes devastating effects of poor leadership which is based on the outdated idea that “good” leaders are powerful men who are always in control and know what is best. On the extreme end of this scale are the Weinsteins and Trumps of the world. Their behaviour causes public demands for a change in leadership. It is a demand for inclusive leadership. We see this demand expressed in several ways.

For instance, a recent study found that 42% of all Danes are so dissatisfied with their boss that they would not hire him or her if given the chance. Also, more women than ever before are leaving companies because of excluding and sometimes toxic work cultures, and millennials actively challenge the status quo of organizational hierarchies and work ethics.

Heidi: Moreover, in countries such as Denmark the arrival of many skilled people from non-Western countries presents companies with unprecedented insight and access to global customer markets – that is, if leaders are able to tap into the benefits of cultural differences. And this goes for all differences at work. But we see a problem right now. In another recent study published by Deloitte University, researchers found that a very large amount of people feel they have to cover certain aspects of their identity to fit in at their workplace. And this were not only people from minority groups: a whopping 43% of white, hetereosexual males downplay their individual differences at work. When considering the advantages of diversity we have to begin by reflecting on the negative consequences of having a staff of skilled employees many of whom do not feel encouraged by their managers or the existing work cultures to express themselves in an authentic way.

Kasper: Especially when we consider the case of diversity from a product perspective. Perhaps the most important trend right now is the exponential growth of new technologies leading to the disruption of what was previously firmly established industries and mammoth corporations. This creates uncertainty. Nobody knows what will happen next month, let alone next year. One of the most effective ways to reduce this uncertainty is to make sure that companies always have as many different perspectives as possible on the operations and product development processes to counter unforeseen changes and to secure constant innovation. This requires diversity and a culture of inclusion where different perspectives can be expressed freely.

Heidi: So, if we take all of these trends together, they create new and undeniable demands upon leaders, whether people like it or not. If you, as a leader in a company, are not able to engage and motivate a diverse group of employees in an inclusive way, both you and your company are heading for rapid extinction.