How diverse businesses have outperformed their peers – and can again14 April 2021
Helen Simpson, new York & North Yorkshire LEP Chair, talks in the Yorkshire Post about how diverse businesses have outperformed their peers – and can again.
In York and North Yorkshire, we are blessed to live and work in a distinctive region, with a varied, diverse economy and with a reputation for being entrepreneurial and passionate about our Yorkshire identity. Our region is both urban, with the great city of York and rural, with over 70% of residents in North Yorkshire living in rural communities. Our economy benefits from some large national and global businesses, although 98% of businesses are small or micro sized which operate across a wide range of sectors from agriculture to hospitality.
Back in the pre-pandemic world, businesses who invested in diversity, in all senses of the word, proved there were significant benefits to be gained. A McKinsey study discovered that gender diverse executive teams in the highest quartile outperformed male-dominated companies by 21% in terms of EBIT and 27% in terms of creating long-term value. And yet, Sir Philip Hampton, Chair of the Hampton-Alexander Review, flags that many individual boards have had ‘compliance challenges’ with meeting the review’s 33% target of women in FTSE 350 leadership teams, so there is still more to do.
In my executive career, I’ve worked in teams where I was the only woman as well as in those where greater diversity has created a more effective and innovative environment. Boston Consulting Group study in 2017 identified diversity as a key driver of innovation, finding that diverse teams produce 19 percent more revenue, which reflects my own experience. As the first female Chair of the Y & NY Local Enterprise Partnership, I am glad to celebrate the balance of gender, variety of perspective and the public and private partnership skills on our boards. The ‘Strengthened Local Enterprise Partnerships’ report acknowledged that to be a successful LEP, we should reflect the regional economy we serve, so we have been developing our ability to best represent the rich variety of York & North Yorkshire. We are pleased to have already achieved the March 2023 target of having 50% women on our board.
Recent recruitment has brought new members of different ages, backgrounds and sectors to our Board and Sub-Boards. This will help us deliver the Greener, Fairer, Stronger Development Plan for the region. Supporting our carbon-negative and circular ambitions, we are pleased to welcome a new board member who is responsible for Drax Power Station – the largest single site renewable electricity generator in the UK with ambitious plans to become carbon negative through developing carbon capture technology. We are also glad to extend our business diversity in our Board and Sub-Boards, bringing strengths in food manufacturing, tourism, digital and retail, all vitally important in developing our local economy.
So, what has the impact of the pandemic been?. McKinsey research highlighted “women in particular are worried about the health and safety of on-site workplaces and mental-health issues. They are also more concerned than men about increased household responsibilities—suggesting that the stress of the “double shift” continues to be a gendered issue”. Working parents have struggled to manage home schooling and those with caring responsibilities or those facing redundancy have found it challenging. Those from ethnic minority backgrounds may have experienced disproportionate rates of redundancy and bereavement. In such hard times we have seen a surge of mutual support in and between businesses, between sectors and in our communities. Our working and home lives are less separate than they once were.
We have seen fantastic resilience from many local businesses. Brilliant people- centred management of teams under stress, and support for colleagues in difficulty. A great acceleration of digital as small businesses who had never sold online, have started to use online platforms like ShopAppy to sell their products. Hospitality businesses forced to close their physical doors have pivoted to create new takeaway revenue streams. Some food businesses joined forces to provide meals to keep the local NHS staff going and collaboration between neighbouring businesses in market towns has grown.
As businesses navigate their road to recovery, we will need to pull together using our uniquely different journeys to help each other. The LEP looks forward to continuing to partner with businesses, so do join with us: join our calls, courses and conferences or do email. This is a unique opportunity for businesses to harness the power of diversity to boost and sustain an environment in which everyone, whatever their background, feels welcomed, valued and able to contribute.
Let’s do this together – that way we can help our region thrive.
This article was originally published in the Yorkshire Post: https://www.yorkshirepost.co.uk/business/how-diversity-can-be-a-driver-of-innovation-in-north-yorkshire-helen-simpson-3199121