HR Grapevine
HR Grapevine | Executive Grapevine International Ltd

IHG's CHRO: 'Diversity is a business imperative'

How to build a truly inclusive organisation and the business benefit this brings…
IHG's CHRO: 'Diversity is a business imperative'

 

 

Hotel, motel, diversity’s in

How to build a truly inclusive organisation and the business benefit this brings…

Words by Daniel Cave| Design by Matt Bonnar

“It’s quite commonplace to think that Diversity and Inclusion (D&I) is important from a social perspective, and that as a global citizen you should be diverse and inclusive,” Ranjay Radhakrishnan, Chief Human Resources Officer (CHRO) at InterContinental Hotels Group (IHG) tells HR Grapevine in the lounge area of a North London franchise of Holiday Inn. “However for IHG, D&I is actually a business necessity.”

For IHG, D&I is actually a business necessity

It’s clear to see why D&I plays a central role in business success for the UK-headquartered parent group behind hotel chains such as Crown Plaza, Kimpton and, perhaps their most well-known brand, Holiday Inn. (The latter made unforgettable thanks not only to a seemingly ubiquitous presence – it has over 1,000 hotel outlets – but as a result of being referenced by US musician Pitbull in his too-memorable 2009 hit Hotel Room Service.) With so many different brands (16), and over 400,000 colleagues working inside a franchise model – 13,000 are considered core staff, employed directly by IHG – across 100 countries, both staff and customers inevitably form a diverse unit.

As Radhakrishnan explains, diversity is, for a global hospitality business, basically inevitable. “Our business is about hospitality for everyone in the world. The [franchise] owner profile is diverse; the guest profile is diverse; [therefore] inclusivity as part of our culture is a natural phenomenon,” he explains. Yet, this doesn’t mean the hospitality conglomerate’s CHRO thinks his work is done. With a changing customer base – IHG has noted the rise of outbound Chinese, Middle Eastern and Indian travelers – there is particular need, especially in a constantly evolving marketplace, for the group to have access to the right talent and cultural know-how to meet their needs. Business, as Radhakrishnan says, depends on it; both now and going forward.

 

Perhaps unsurprisingly then, Radhakrishnan believes that organisations should take a formative, and public, at least in an internal sense, role in D&I initiatives. “We have to be conscious and lead from the front,” he adds. The subtext being: IHG’s CHRO believes that diversity, when tied to business strategy, correlates with a strong employer and customer appeal, which in turn helps to drive the high-performance culture that he is conscious of safeguarding.

Radhakrishnan tells HR Grapevine that at IHG, D&I is built into the business via a plethora of different initiatives. They have set-up a global D&I board. This advertises to IHG colleagues that the group thinks the diversity and individuality of the workforce is important, but it also makes D&I a discussion that those involved in top-level business strategy must take part in. There is public liability for leadership too; on IHG’s corporate site, it is explicitly stated that that D&I is part of Radhakrishnan’s remit. The flipside being that if it doesn’t go well, it is obvious which part of the leadership team is culpable.

It’s not just about making leadership aware of, and responsible for, the issue. Diversity initiatives are filtered through the company and across the regions they work in. This differentiation dependent on the particular inclusion issues that are difficult in that country. For example, in Saudi Arabia IHG is increasing its focus on the representation of women – earning it a Best Place to Work in Saudi Arabia award – whilst in the US it is focusing on better representation of workers from ethnic minority backgrounds. “We try to customise for each region, Ranjay adds. “However, we don’t differentiate [in a way that would compromise IHG D&I ethos]. We look at the global principles and frameworks that we must follow.”

 

 

Additionally, IHG has implemented programmes which aim to progress minority groups to the upper levels of management. Already, 38% of its global senior leaders are women. The inclusivity ethos has also filtered into recruitment and employer branding exercises – with emphasis on the fact that IHG colleagues can bring their ‘whole selves’ to work i.e. they don’t have to suppress their culture, sexuality or belief systems. Running an ‘Out and Open’ network means that IHG has been awarded, for five years in a row, with the Best Place to Work for LGBTQ Equality. It has also earned a 100% score on the Human Rights Campaign Foundation’s Corporate Equality Index. The firm has also set itself concrete targets for representation levels, as well as tracking how its workforce understands and values inclusion.

It would be easy to think that D&I doesn’t need this close attention in 2019. Countless organisations are happy to wax lyrical about how well their inclusivity initiatives are working on their corporate sites. Governments and public bodies across the world lead initiatives regards improving workforce participation – especially senior workforce participation – for marginalised groups. Consider Norway’s 40% quota for women on boards or the building of support networks for BAME candidates and awards for BAME-inclusive employers. It all appears to be heading in the right direction.

If organisations only do it for branding, they will lose credibility with their own colleagues

 

 

Yet, for all this apparent good work, inclusion levels, worldwide, are still struggling. In the US, black Americans, according to the Diversity Journal, still face the same hiring discrimination as they did 25 years ago. Across FTSE 100 companies, less than 10% of executive positions are held by women. In 2016, representation of women on UK Boards was even falling and despite BAME individuals representing a tenth of the workforce they only currently hold six per cent of the top management conditions.

To compound the issue, despite many corporations pride-washing their brand logos, 32% of LGBT employees still choose to hide their sexual orientation in the workplace. Outside the world of business, hate crimes against the UK-based LGBT community have doubled in the past five years and ethnic minorities in the UK are reporting an increase in racial discrimination. In recent months, leading public figures, including UK candidates for European parliament, as well as incumbent MPs, have faced investigations, or scrutiny, into their records of overt, or alleged, racism.

 

 

Changes in social mood, such as these, are closely monitored by the IHG leadership team. “We do genuinely want to do the right for society,” Radhakrishnan explains, “so, it is something that we’re constantly watching for how it develops and grows.” However, he doesn’t just believe corporate diversity and inclusion – as well as a wider awareness of the tensions in the markets they operate in – is merely an altruistic act. Neither does he think that corporate diversity and inclusion initiatives only benefit firms which operate in such a viscerally diverse business, such as global hospitality. “Any company that operates across markets – and where you have to leverage scale, and synergy, as well as working in an interdependent manner, inclusion is going to be important – it’s sector agnostic,” he explains.

There is a vast amount of literature on the benefits that diversity can bring for any business. Whilst it is hard to pinpoint exact causation between a firm’s diversity and their business success, there is certainly a strong correlation. Research from Bersin by Deloitte found that the factor that had the highest impact on business performance was diversity and inclusion. A separate study from the University of Chicago found that diverse teams drove higher revenue and better market share. As Bersin added at the end of his report: “[These businesses] are not just better at HR – they are higher performing companies.” This is not all. Harvard Business Review found that diverse firms are able to solve problems faster and in 2013 Deloitte statistics found that diverse firms have higher employee engagement; something which, in many HR circles, is seen as the silver bullet to better productivity and thus better performance.

 

 

There’s an apparent financial penalty for poor inclusivity, too. McKinsey & Co’s 2018 Delivering through Diversity report found that companies that were not diverse appeared to be underperforming compared to their industry peers. But companies find it difficult – McKinsey reported that many organisations find materially improving diversity and inclusion is challenging. Yet, there were certain behaviors companies not struggling with diversity and inclusion did well. These included: having a diversity and inclusion strategy that reflected the business ethos; having a portfolio of different D&I initiatives which aim to boost the organisation; as well as localising D&I projects. Without being too cute, IHG seems to have hit all of these.

In fact, Radhakrishnan has incorporated all of these elements into IHG's D&I strategy; focusing on authenticity, differentiation and communication. He is adamant that if D&I is to successfully drive business success and transform organisational makeup, it has to be a core part of its values and purpose. “If organisations only do it for branding, they will lose credibility with their own colleagues and that is where it is exceptionally important,” he says. “One of the ways we ensure we don’t do this is to make it a part of the core values; to celebrate that difference.

 

Its about communication and leading from the front and then you’ll infuse the belief in the organisation and the rest will follow

Additionally, Mckinsey’s 2018 research found that whilst UK and US are good on ethnic diversity amongst Executives, they are less good on gender diversity at the top levels of leadership. Ergo: solely focusing diversity efforts on better ethnic minority representation in this region will likely not improve levels of inclusion as much. The takeaway being: know where you are falling down on and where might need most attention. IHG does this too – changing how its D&I projects look based on global locale.

Lastly, there’s communication. “It’s fairly simple,” he explains, “communicate, communicate, communicate. For me its about communication and leading from the front and then you’ll infuse the belief in the organisation and the rest will follow.” Then, at least in his mind, and IHG’s example – the firm made an operating profit of £465million in 2018 – business success is more likely.

“If the organisation is to succeed it had to be diverse. If we are to deliver our purpose, it has to be an inclusive organisation.” It’s worth remembering that it can’t be a branding project that is the sole preserve of the people function – forgotten about during the day-to-day mechanics of business. “[D&I] is not just an HR-led affair. We talk about conscious inclusion at some of the most senior levels all the way down. Even If I don’t focus on it the organisation will focus on it, which is what I love.”

 

 

“It’s quite commonplace to think that Diversity and Inclusion (D&I) is important from a social perspective, and that as a global citizen you should be diverse and inclusive,” Ranjay Radhakrishnan, Chief Human Resources Officer (CHRO)at InterContinental Hotels Group (IHG) tells HR Grapevine in the lounge area of a North London franchise of Holiday Inn. “However for IHG, D&I is actually a business necessity.”

 

For IHG, D&I is actually a business necessity

 

It’s clear to see why D&I plays a central role in business success for the UK-headquartered parent group behind hotel chains such as Crown Plaza, Kimpton and, perhaps their most well-known brand, Holiday Inn. (The latter made unforgettable thanks not only to a seemingly ubiquitous presence – it has over 1,000 hotel outlets – but as a result of being referenced by US musician Pitbull in his too-memorable 2009 hit Hotel Room Service.) With so many different brands (16), and over 400,000 colleagues working inside a franchise model – 13,000 are considered core staff, employed directly by IHG – across 100 countries, both staff and customers inevitably form a diverse unit.

 

 

As Radhakrishnan explains, diversity is, for a global hospitality business, basically inevitable. “Our business is about hospitality for everyone in the world. The [franchise] owner profile is diverse; the guest profile is diverse; [therefore] inclusivity as part of our culture is a natural phenomenon,” he explains. Yet, this doesn’t mean the hospitality conglomerate’s CHRO thinks his work is done. With a changing customer base – IHG has noted the rise of outbound Chinese, Middle Eastern and Indian travelers – there is particular need, especially in a constantly evolving marketplace, for the group to have access to the right talent and cultural know-how to meet their needs. Business, as Radhakrishnan says, depends on it; both now and going forward.

 

 

Perhaps unsurprisingly then, Radhakrishnan believes that organisations should take a formative, and public, at least in an internal sense, role in D&I initiatives. “We have to be conscious and lead from the front,” he adds. The subtext being: IHG’s CHRO believes that diversity, when tied to business strategy, correlates with a strong employer and customer appeal, which in turn helps to drive the high-performance culture that he is conscious of safeguarding.

Radhakrishnan tells HR Grapevine that at IHG, D&I is built into the business via a plethora of different initiatives. They have set-up a global D&I board. This advertises to IHG colleagues that the group thinks the diversity and individuality of the workforce is important, but it also makes D&I a discussion that those involved in top-level business strategy must take part in. There is public liability for leadership too; on IHG’s corporate site, it is explicitly stated that that D&I is part of Radhakrishnan’s remit. The flipside being that if it doesn’t go well, it is obvious which part of the leadership team is culpable.

It’s not just about making leadership aware of, and responsible for, the issue. Diversity initiatives are filtered through the company and across the regions they work in. This differentiation dependent on the particular inclusion issues that are difficult in that country. For example, in Saudi Arabia IHG is increasing its focus on the representation of women – earning it a Best Place to Work in Saudi Arabia award – whilst in the US it is focusing on better representation of workers from ethnic minority backgrounds. “We try to customise for each region, Ranjay adds. “However, we don’t differentiate [in a way that would compromise IHG D&I ethos]. We look at the global principles and frameworks that we must follow.”

 

If organisations only do it for branding, they will lose credibility with their own colleagues

 

Additionally, IHG has implemented programmes which aim to progress minority groups to the upper levels of management. Already, 38% of its global senior leaders are women. The inclusivity ethos has also filtered into recruitment and employer branding exercises – with emphasis on the fact that IHG colleagues can bring their ‘whole selves’ to work i.e. they don’t have to suppress their culture, sexuality or belief systems. Running an ‘Out and Open’ network means that IHG has been awarded, for five years in a row, with the Best Place to Work for LGBTQ Equality. It has also earned a 100% score on the Human Rights Campaign Foundation’s Corporate Equality Index. The firm has also set itself concrete targets for representation levels, as well as tracking how its workforce understands and values inclusion.

It would be easy to think that D&I doesn’t need this close attention in 2019. Countless organisations are happy to wax lyrical about how well their inclusivity initiatives are working on their corporate sites. Governments and public bodies across the world lead initiatives regards improving workforce participation – especially senior workforce participation – for marginalised groups. Consider Norway’s 40% quota for women on boards or the building of support networks for BAME candidates and awards for BAME-inclusive employers. It all appears to be heading in the right direction.

 

 

Yet, for all this apparent good work, inclusion levels, worldwide, are still struggling. In the US, black Americans, according to the Diversity Journal, still face the same hiring discrimination as they did 25 years ago. Across FTSE 100 companies, less than 10% of executive positions are held by women. In 2016, representation of women on UK Boards was even falling and despite BAME individuals representing a tenth of the workforce they only currently hold six per cent of the top management conditions.

To compound the issue, despite many corporations pride-washing their brand logos, 32% of LGBT employees still choose to hide their sexual orientation in the workplace. Outside the world of business, hate crimes against the UK-based LGBT community have doubled in the past five years and ethnic minorities in the UK are reporting an increase in racial discrimination. In recent months, leading public figures, including UK candidates for European parliament, as well as incumbent MPs, have faced investigations, or scrutiny, into their records of overt, or alleged, racism.

 

 

Changes in social mood, such as these, are closely monitored by the IHG leadership team. “We do genuinely want to do the right for society,” Radhakrishnan explains, “so, it is something that we’re constantly watching for how it develops and grows.” However, he doesn’t just believe corporate diversity and inclusion – as well as a wider awareness of the tensions in the markets they operate in – is merely an altruistic act. Neither does he think that corporate diversity and inclusion initiatives only benefit firms which operate in such a viscerally diverse business, such as global hospitality. “Any company that operates across markets – and where you have to leverage scale, and synergy, as well as working in an interdependent manner, inclusion is going to be important – it’s sector agnostic,” he explains.

There is a vast amount of literature on the benefits that diversity can bring for any business. Whilst it is hard to pinpoint exact causation between a firm’s diversity and their business success, there is certainly a strong correlation. Research from Bersin by Deloitte found that the factor that had the highest impact on business performance was diversity and inclusion. A separate study from the University of Chicago found that diverse teams drove higher revenue and better market share. As Bersin added at the end of his report: “[These businesses] are not just better at HR – they are higher performing companies.” This is not all. Harvard Business Review found that diverse firms are able to solve problems faster and in 2013 Deloitte statistics found that diverse firms have higher employee engagement; something which, in many HR circles, is seen as the silver bullet to better productivity and thus better performance.

 

 

There’s an apparent financial penalty for poor inclusivity, too. McKinsey & Co’s 2018 Delivering through Diversity report found that companies that were not diverse appeared to be underperforming compared to their industry peers. But companies find it difficult – McKinsey reported that many organisations find materially improving diversity and inclusion is challenging. Yet, there were certain behaviors companies not struggling with diversity and inclusion did well. These included: having a diversity and inclusion strategy that reflected the business ethos; having a portfolio of different D&I initiatives which aim to boost the organisation; as well as localising D&I projects. Without being too cute, IHG seems to have hit all of these.

In fact, Radhakrishnan has incorporated all of these elements into IHG's D&I strategy; focusing on authenticity, differentiation and communication. He is adamant that if D&I is to successfully drive business success and transform organisational makeup, it has to be a core part of its values and purpose. “If organisations only do it for branding, they will lose credibility with their own colleagues and that is where it is exceptionally important,” he says. “One of the ways we ensure we don’t do this is to make it a part of the core values; to celebrate that difference.

 

Its about communication and leading from the front and then you’ll infuse the belief in the organisation and the rest will follow

 

Additionally, Mckinsey’s 2018 research found that whilst UK and US are good on ethnic diversity amongst Executives, they are less good on gender diversity at the top levels of leadership. Ergo: solely focusing diversity efforts on better ethnic minority representation in this region will likely not improve levels of inclusion as much. The takeaway being: know where you are falling down on and where might need most attention. IHG does this too – changing how its D&I projects look based on global locale.

Lastly, there’s communication. “It’s fairly simple,” he explains, “communicate, communicate, communicate. For me its about communication and leading from the front and then you’ll infuse the belief in the organisation and the rest will follow.” Then, at least in his mind, and IHG’s example – the firm made an operating profit of £465million in 2018 – business success is more likely.

“If the organisation is to succeed it had to be diverse. If we are to deliver our purpose, it has to be an inclusive organisation.” It’s worth remembering that it can’t be a branding project that is the sole preserve of the people function – forgotten about during the day-to-day mechanics of business. “[D&I] is not just an HR-led affair. We talk about conscious inclusion at some of the most senior levels all the way down. Even If I don’t focus on it the organisation will focus on it, which is what I love.”

 


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