Written by
Mary Appleton
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Published
12 Jan 2018

The time for talking about diversity is over

12 Jan 2018 • by Mary Appleton

Baroness Ruby McGregor-Smith knows all too well the challenges of being ‘other’ in the workplace. The former Mitie chief executive is calling for employers to take action to ensure that people from ethnic minority backgrounds are no longer held back in the workplace. 

Ruby McGregor-Smith's appointment as chief executive of Mitie in 2007 made her something of a media spectacle – as the first Asian female CEO of a FTSE250 company, she trumped two ‘diversity’ barriers.

“I didn’t realise it was such a big deal until I got the job,” she recalls. “I assumed there would be more people like me.”

At the time, McGregor-Smith was frustrated by the focus on the way she looked, rather than on her business capability. However, during her tenure at Mitie, the firm increased its turnover by £1.5bn and passed the £2bn mark for the first time in 2012 – surely confounding the cynics.

“I was positioned as a ‘risky’ hire because society makes us question anything viewed as different. Was it really that risky?” she asks.

Despite her initial reluctance to engage in diversity discussions, McGregor-Smith has since become an active campaigner on both gender and race issues, receiving a CBE for services to diversity in business in 2012, and earlier this year, penning the government-commissioned Race in the Workplace review.

“I’ve come to realise that if you’re from a minority background and have done well, you have to stand up and admit there’s inequality. I go to senior business dinners and the only people who look anything like me are the waiters. I can say ‘there are barriers’. “I’ve been lucky enough to get through those but many don't, and it has to change."

Imbalance of opportunity

The McGregor-Smith Review: Race in the Workplace, published in February 2017, highlights stark disparities between those from BAME backgrounds and their white counterparts.

For example, the employment rate for ethnic minority workers is just 62.8% compared with 75.6% for white workers. While 14% of the workingage population is from a BAME background, ethnic minority workers comprise just 10% of the workforce, and are more likely to work in lowerpaid, lower-skilled jobs, despite being more likely to have a degree. BAME individuals hold just 6% of top management positions.

“The story’s the same across every industry,” says McGregor-Smith. “If you’re from a BAME background, and you’re lucky enough to get a job, you might go up one pay level but then progression stops.

A lot of [BAME] people join a company on a graduate scheme but leave after three years because they don’t get promoted. There’s a very small number of people from a minority background from mid-management up to senior leaders, and it’s just not good enough.”

The importance of data

For McGregor-Smith, a key turning point on the BAME diversity agenda will occur when organisations can identify trends and gaps through data. Just 49% of FTSE100 companies were able to provide meaningful data on BAME representation and pay when requested as part of the review.

But there are clear economic benefits: the report estimates that GDP would be 1.3% higher – equivalent to some £24bn a year – if BAME individuals were immediately fully represented across the workforce in the same proportions as white counterparts.

“Get the data, set aspirational targets and then each year, if you don’t hit them, talk about what you have done for that employee group,” advises McGregor-Smith.

“Include information in your annual report around D&I: explain what your data’s telling you and how you’re acting on it; why you’re a diverse organisation that promotes talent and doesn’t promote on background, race, sexuality or anything else considered ‘different’.”

Within her review, McGregor-Smith outlines 26 recommendations, her “roadmap to success”, for businesses on taking positive action within attraction, selection and training processes.

“When you shortlist, you’re already unconsciously biased because you look at the names on CVs,” she comments. “Looking at talent only on skills and the companies people have worked for might result in different shortlists.”

With the anticipated dramatic shift in workplace demographics, McGregor-Smith points out that this is a necessity. “To be motivated at work, people need to feel accepted. Many people I know from a minority background don’t apply for jobs; they don’t think they will make the shortlist and if they do, people won’t relate to them. Part of our challenge as leaders is to encourage people to relate to each other.”

Journey to CEO

McGregor-Smith knows all too well the discomfort caused by feeling ‘other’. Born Ruby Ahmad in Lucknow, India, she emigrated to London, aged two, with her accountant parents and two sisters.

She struggled to integrate into British society and has mixed memories of school. Throughout her life, she admits, she has “tried to ignore all of that and move forward.” And indeed she has.

After studying economics at Kingston University, McGregor-Smith worked for six years as an accountant at BDO Stoy Hayward (“I knew accountancy would open doors”), launching her career at outsourcing company Serco, where she stayed for nine years before joining Mitie as group finance director in 2002. 

Having role models and sponsors has been a key contributing factor to her success. “I worked hard but couldn’t have done it without support from the two amazing CEOs I worked for,” she says. “You have to have people who believe in and push you.”

She became Mitie’s chief executive in 2007, yet admits she found diversity a tough issue to tackle. “It was a very traditional organisation. I had predominantly male senior managers from one background only. It didn’t matter that I was the chief exec, it was still hard to change, which is why I think data, targets and talking about it all help.”

Calling out truths

In 2015, when McGregor-Smith was approached by the then business secretary, Sajid Javid, to conduct a review of race in the workplace, her mother warned her against it. “She thought it would put a spotlight on me that I wouldn’t want,” she says. “But I said ‘if I don’t, no one will talk about it, and I can be honest as I have lived it’.”

Despite her first-hand experiences, McGregor-Smith was surprised by the levels of conscious and unconscious bias uncovered in her report. “It comes down to how comfortable someone feels. It’s no different to being the only woman in the boardroom and everyone else talking about football. The main thing is stopping people feeling excluded.”

Creating environments where people feel able to have open conversations about race will help. “I don’t necessarily know how to talk about race myself,” she admits.

“I didn’t know whether I should say the word ‘black’ – to be blunt I’ve avoided it – but if people can discuss the challenges they’re having, they’ll be more motivated, which is essential in this business climate. You have to convey the message that ‘if you do a brilliant job we’ll adore you, whoever you are’.”

Future-proofing inclusion

Regarding diversity in general, McGregor-Smith is irritated by the ‘one step forward, two steps back’ rate of progress.

Moving on from her role at Mitie in 2016 only increased the diversity deficit on UK boards. “If anything, the FTSE stats are getting worse,” she quips.

But while women’s representation at senior levels remains stubbornly low, McGregor-Smith has observed a shift in perceptions of gender equality, arguing it is an element of diversity we “don’t mind talking about”.

“Gender isn’t ‘sorted’ and we shouldn’t kid ourselves, but race is a different dynamic,” she affirms. “When you reflect on it, you really notice it. I have only met a few black bar managers, black teachers, or black headhunters. We don’t have any BAME newspaper editors – so how can the media be inclusive? Whether it’s public or private sector, where are these people?”

However, she does believe organisations have taken on board the evidence that attracting and developing individuals from the widest pool of talent leads to better performance.

So where do we go from here? “For me, its inclusiveness as opposed to diversity,” she says. “Let’s ignore how we look, speak, our backgrounds. Every organisation wants great people who can do great things. We are thrilled when people thrive. There’s just a whole part of our population that we don’t let that happen to, and that’s what needs to change.”

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