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Inclusive leadership in Asia: The heart of the matter

How organisations in this region can build smarter businesses by embracing diversity.

To be truly inclusive requires a mindset shift from most of us. Studies illustrate that the more diverse and inclusive a company is, the healthier its profits.

IT'S a fact: Fostering diversity and inclusivity (D&I) within an organisation leads to an improved bottom line. Surprisingly, though, it isn't the prospect of boosted financial performance that is driving D&I initiatives within most major companies today. Rather, it's leaders' recognition that correcting imbalances and creating an environment where individuals of diverse backgrounds and outlooks are embraced is simply the right thing to do.

To be truly inclusive requires a mindset shift from most of us.

Studies illustrate that the more diverse and inclusive a company is, the healthier its profits.

According to a 2018 report from McKinsey, "Companies in the top-quartile for ethnic/cultural diversity on executive teams were 33 per cent more likely to have industry-leading profitability while companies in the top-quartile for gender diversity on executive teams were 21 per cent more likely to outperform on profitability and 27 per cent more likely to have superior value creation."

When a company consciously sets out to remedy gender imbalance by including more women on executive teams and in client-facing, revenue-generating roles, income increases. It follows that D&I efforts outside those aimed at gender parity will have similar effects, according to McKinsey's research. Given the strong relationship between diversity and profitability, "inclusion of highly diverse individuals - and the myriad ways in which diversity exists beyond gender (eg, LGBTQ+, age/generation, international experience) ) - can be a key differentiator among companies", the report states.

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It is only to be expected that a business dealing with a global marketplace, as most today are, will excel by building teams that recognise and reflect the diverse makeup of their customer base. When your potential consumers are people of all races, genders, sexualities, perspectives, belief systems and so forth, a team that echoes this wonderfully fragmented composition will be best equipped to create market-fit products and communicate their qualities.

The business case for D&I is very easy to argue. Simply show a business leader the McKinsey stats quoted above, or the results of PwC's 18th Annual Global CEO Survey, which found that an overwhelming 85 per cent of the polled chief executives running organisations with a D&I strategy believe this has enhanced business performance, while 56 per cent said it had made the company more competitive in new industries or geographies.

As the numbers indicate, D&I simply makes sense. But humans are not driven by logic. We often attempt to use logic to sway the opinions of others, but as politicians, marketers and sales people know, it is in fact one of the weakest forms of influence. Decisions - whether to vote, buy or to buy in - are almost always made on the basis of emotion.

Business leaders who take action and initiate D&I programmes are predominately prompted by the fact that these issues are relevant to or in line with their personal values. The profit motive? That's all well and good, but when it comes to these issues, a CEO is more likely to be persuaded by matters closer to home.

Perhaps he (and yes, it is usually a male) is raising daughters and wants to play a part in ensuring they grow up in a more equitable world. Maybe he is a white European man living in Asia (another common big-business CEO scenario) and has developed close relationships with local people, who've told him moving stories detailing their experiences of discrimination. The impetus to improve D&I invariably comes more from the heart than the head.

Lacking in other aspects of diversity

Decision-making that hinders D&I is often unconscious, too. As human beings we naturally tend to 'self-clone', to surround ourselves with people who are like us, whether that means they're the same gender, race, religion, nationality or sexuality. Even companies that have taken great strides in readjusting gender balance may still be found lacking in terms of the other aspects of diversity.

Leaders frequently fail to recognise there's a problem, which is where cognitive bias training can be productive, helping cast light on the fact that there is an issue in need of resolution. When that becomes clear, it affects leaders on an emotional level and they generally become far more willing to take the steps necessary to shape an authentically diverse, inclusive organisation.

To do so requires long-term dedication; ideally, empowering a Chief Diversity Officer who is both passionate and adept at creating culture changes in an organisation - and giving them the resources and authority to make a real difference. Crucially, the C-suite and HR need to stand by them throughout what can be a drawn-out process.

To succeed, these initiatives need sponsors at the highest level in the company and support all the way down the line. It isn't simply a matter of hosting a seminar, box ticked, and thinking the matter is closed. You can't change a person's mindset or a company's culture with a mere two-hour talk. Shaping an inclusive culture is a long-term project - but setting and stewarding that sort of far-reaching goal is exactly where the forward-thinking leader thrives.

In one example of a great achievement in this area, Unilever recently announced they'd reached 50/50 gender balance among their 14,000 managers worldwide. Top leadership's commitment, consistently-set KPIs, regularly checked leadership accountability, diversity champions, HR, diversity and line managers, were all essential in creating an inclusive culture. I particularly liked their holistic approach of "improving the (diversity) numbers and culture at the same time". Nevertheless, it still has to be said that even Unilever has some way to go to reach 50/50 at the most senior leadership levels.

In building a team that is inclusive, irrespective of demographic, gender, age, race, religious or other beliefs, nationality, sexuality, socioeconomic or educational background, different physical or mental abilities, the ultimate aim is to create a company culture characterised by diversity of thought. To profit from the spectrum of perspectives offered by a truly diverse group of individuals, each needs to feel empowered to express their own unique truth. A spirit of open and honest collaboration, antithetical to the traditional hierarchical model, must be fostered.

In Asia, D&I efforts are still at an early stage. To many, D&I is a 'Western concept', and I think there is some truth to this. Asian countries are traditionally hierarchical, members of the society and organisations have more defined roles - for example, in terms of when and who should be involved in decision-making or even when and who should speak up at meetings.

Equal treatment for all

Inclusion assumes equal treatment for all. This can create ambiguity as to how to be inclusive while also respecting each other's status, and makes institutional change where leadership and all employees accept and practice inclusion more challenging in this region than perhaps on the North-American and European continents or in Australia and New Zealand.

In Asia, most D&I efforts are focused as well as limited to gender. In recent years we have seen governmental, industry body efforts: for example, to raise the percentage of female board members to 30 per cent in Malaysia and at least to have one in India.

In organisations that have embraced inclusivity, leaders display, through word and deed, their acceptance and appreciation for the people of their organisation, celebrating their differences and quirks. They show that they care and that they're a good person. That's the kind of boss an employee will go the extra mile for. It's basic human nature - if someone is nice to you, cares for you, does their best for you, you'll be nice to them, care about them, and do your best for them. There is plenty of research to back up that thesis, but we all know it to be true. While the numbers supporting D&I may be impressive, an all-too-human quid pro quo is truly the bottom line.

  • Dr Zsuzsanna Tungli is managing partner of Developing Global Leaders Asia

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