Diversity is crucial to an organization’s growth, strength, and ability to innovate. There are other very good arguments for diversity (social justice, for instance), too, but let’s focus for the moment just on business outcomes.

Diverse teams and organizations outperform teams with less diversity. 

During my time as the CEO of Nielsen, we set out to answer an important question: Do diverse teams and organizations outperform teams with less diversity? We were a company of 45K employees and over $6b in annual revenues. That big company, though, was comprised of many different business units. Some had better financial performance than others. Some were stronger than others (e.g., better operational excellence, strategic clarity, employee engagement). Some were innovating better than others. We listed and ranked them on all of those key metrics. Then we added measures of diversity:  the diversity of the leadership team, the diversity of the overall organization. 

When we analyzed the data, what did we find? The more diverse the leadership team, the better the growth, strength, and innovation of the business unit. As the CEO, I then started to ask the units with less diversity, “Why are you not taking full advantage of this to improve your results?” 

Are there pluses and minuses to having a more diverse leadership team? Yes, sometimes, at least in the short run. Having a group of people with similar backgrounds and worldviews might initially result in easier group cohesion, easier communication, and faster decision making. In short, it might be more efficient. But as desirable as efficiency is, in the long run, it has to be balanced with the crucial activity of innovation, and innovation is inherently inefficient. Diversity is especially important to innovation. And innovation is a key determinant of long-term viability. Beth Comstock, former marketing leader at GE, says it well:  “If you want innovation, then you want diversity…period.”

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Recently, while on vacation with my wife in Hawaii, we visited the Hawaii Aquarium in Maui. One of the exhibits said about one-fifth to one-quarter of the plants and animals on the islands of Hawaii were unique to Hawaii. This is a relatively large proportion in comparison to other places on Earth. Why? Hawaii is one of the most isolated places on Earth in terms of its distance from other land. So it’s harder for plants or animals to move or migrate to Hawaii over time. Nature evidently saw that as a void to be filled, and fill it she did, such is the importance of diversity to the long-term viability of the ecosystem.

Several years ago, I spoke at the Wharton Asia Business Conference, sponsored by the University of Pennsylvania’s Wharton Business School. One of the other speakers was Donald Tang, who was, among many other things, the former Chairman & CEO of Bear Stearns Asia.

After each speaker’s talk, there was a Q&A session. At the end of Donald Tang’s talk, a member of the audience asked, “What are the keys to a successful career?” He replied by saying, “Three things:

1. Be confident. Confidence is rewarded with opportunity.
2. Work hard. The goal is not to work harder than everyone else. You cannot really know just how hard everyone else is working, so that isn’t the best benchmark. Instead, just give your very best every day.
3. Take risks. Don’t take just any kind of risk. Take smart risks, where you have weighed the pros and cons. But take risks.”

It was good advice, but the audience was not impressed. After all, his advice was quite simple and obvious. In fact, the person who had asked the question then said, “That sounds like good advice for an undergrad, just out of university, but what about people like us, who are a little further along in our careers?”

Mr. Tang then said, “Same advice. In fact, those three things are even more important later on in your career, after you’ve had some success, because…

• After you have had some success, sometimes your confidence turns into arrogance. Confidence is positive to success. Arrogance is not.
• After you have had some success, you might be less motivated to work as hard as you can. You’re tempted to think that you’ve already proven yourself so maybe you don’t need to work so hard any more. Beware.
• After you have had some success, then you have something to lose and so maybe you are not as willing to take more risks. That limits your potential and your impact.

So, you see this advice is even more important later on in our careers, once we’ve had some success. It’s then that we are most vulnerable to falling down on these points.”

After initially waving off his advice as “too simple and basic”, now nearly everyone in the audience was nodding in agreement and writing down his three points, especially those of us already well along in our careers. We knew he was right.

Every well-run business or team requires governance.  Governance comes in two main forms:  formal controls and social norms.  If a business is well-governed, then some combination of these two will provide the governance required.  Let’s take a look at each.

Formal controls:  These are the rules, policies, and procedures established to ensure control and order. These are often “top down” in nature, and they comprise some of what people refer to as “bureaucracy”. Formal controls are inherently static. In a dynamic environment, if they are not regularly revisited and updated, they can become a burden to the organization.

Social norms:  These are the consistent ways of operating and behaving that are woven into the culture of the business. They are the principles and “mental guardrails” that people consider—consciously or subconsciously—when they make decisions, determine priorities, and as they filter what they say and do. Social norms are flexible and adaptable, and they evolve naturally, organically over time. They can be extrapolated to new situations for which rules or policies have not yet been written. 

If the “required amount of governance = the sum of formal controls + social norms”, then having more of one means less is needed of the other. What is the right balance?  Most people—especially high performers—prefer a lighter reliance on formal controls, in part because they prefer more autonomy to less. We’ll likely always need at least some level of formal controls, but for most people, generally less is better. But the key to reducing reliance on formal controls is to strengthen social norms. If our social norms are weak, our reliance on formal controls will necessarily be heavy to ensure that the business is sufficiently governed. As our social norms grow stronger and clearer, we can lighten our reliance on formal controls.  
 
Where do our social norms come from? The key sources are the mission, values, and role models (i.e., what, how, and who) of the business; these are the key sources of the culture of an organization. The clearer and the stronger our culture, the more we can rely on social norms, and the better a place it is to work.  
 
Culture, if developed it to its fullest, is a very powerful source of strength and guidance for a business. Every honest effort you put into building your culture will be paid back many times over. It’s worth it to work every day to build and strengthen your culture. Do it on a strong foundation, with rock-solid construction, from an inspired design, and with optimism for the future. 

And culture can be a very positive and powerful source of governance.  One way I have heard this described is as follows:  “Culture is what helps people know what to do even when no one is telling them what to do.” 

[The following is the eulogy I delivered at my father’s memorial service after he passed away in the summer of 1997.]

My father was born in a small town, Wilmington, Ohio, in 1940. He was the third son of Irene and Howard Barns. His oldest brother, Geoffrey, died at age 4, one year before my father was born, after being struck by a truck while playing on the sidewalk. My father’s other brother, Keith, is 3 years his senior, and they were close friends.  

My father’s mother, Anne Irene Barns, stood four feet, eleven and a half inches tall, yet always seemed 6 inches taller than everyone else in the room. She taught my dad about right and wrong, honesty and hard work, and, as good parents do, she helped my dad feel special when he was growing up. She was a great cook, but all the good food she cooked couldn’t put enough meat on my dad’s bones. He weighed only 135 pounds when he was a senior in high school. She herself died of cancer in 1974. About 3 weeks ago, I asked my dad if he had been thinking about his mom a lot and what she went through. He said he had, and although she had always held the highest place in his heart, she somehow had moved even higher as he had come to better understand through his battle with cancer what she must have gone through.

My dad’s father was Judge Howard Barns. He was a prominent attorney in a small town. More than that, he was a staunch Democrat in a county that was 90% Republican, yet he never lost an election. He was a big man for his day. He worked in a stone quarry to help pay for his education at Bethany College where he also played lineman on the football team. Like my dad, he had strong hands, blue eyes, and could at times be disarmingly charming. He was a great storyteller, he loved football, and he was immensely proud of his sons.

My dad’s nickname growing up was Peaches. He attended Wilmington High School and played football, basketball, baseball, and track. He sang in the choir and was involved with the school newspaper. He had a 1935 Plymouth that I’m sure seemed liked the best thing going. It was the 1950s and it was a great time to be alive. (continued after pictures below)

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He later attended Wilmington College and was a biology major. A professor there named Doc Hazard inspired him to pursue a career in education. He married his high school sweetheart, moved to the “big city” of Cincinnati, and joined Sycamore Schools as a junior high science teacher in 1962, also coaching football. Eight years later, at the age of 30, he became an assistant principal of the high school as the dean of students, a new position he recommended they establish. A few years later, he became Principal of the Junior High School, where among other things he was soon a source of lunch money to me and my older sister Jacquie. When I moved on to high school, he did too as the principal of Sycamore High, and I continued to tap him for lunch money. People often have asked me, “What was it like to have your dad as your principal? That must have been hard.” But it wasn’t. He was well respected and liked by both students and teachers. All it meant for me was that I went to a great school with a great principal and was also to be able to see my dad at his place of work everyday. It was a pretty good deal, especially when you throw in the lunch money.

He later became Assistant Superintendent of the district, and in 1993, after 30 years with Sycamore, he retired. He then began a second career, as a financial planner. He enjoyed it and did well. This year in particular his business was strong, as by the end of June he had already exceeded his totals from the entire previous year. That says a lot about my dad. Even during the 6 months when he was struggling with cancer, he continued to work hard, striving to do better than he had before. He was always trying to do better.

The past several weeks have been difficult. But they have also in many ways been wonderful. We’ve had the opportunity to reflect back a lot on the type of person my dad is, and in doing so we have laughed a lot and thought a lot. Here are a few highlights:

He had a great sense of humor. He told me the funniest joke I ever heard, at a funeral, ironically (so feel free to follow his lead after the service here today). He could tell me a joke I’d already heard and still make me look forward to the punch line, even though it took him 8 minutes to tell a 2 minute joke. I loved every minute. 

He was an athlete. In high school he was the starting point guard on the basketball team and the starting quarterback on the football team, despite the fact that he was too short and too skinny to be either. In his senior year against his school’s arch rival, he ran 73 yards for a touchdown to win the game, a play that people in Wilmington who are old enough to, still remember. Later he was a pretty good racquetball player; he taught me how to play, and when I was good enough to beat everyone else, I still couldn’t beat him.

He was a prolific reader. When he was a kid, he read 292 books in one year. I have an article from the Wilmington News-Journal to prove it! Unfortunately, the article showed a picture of him reading a book about Abraham Lincoln and his father, the Democrat, was upset that his son was seen reading about a Republican.

He was smart. He broke big problems into many small ones and solved them. He had good instincts for things. He thought a few steps ahead. And he was confident, which just made him seem smarter.

He was a teacher. Even during his cancer, he was interested in the technical aspects of everything…the medicines, the machines, the processes. A few weeks ago, he asked the nurses in radiation to show me the equipment and monitors and explain how it all worked. He wanted me to take advantage of the chance to learn.

He was a hard working man. So many of his work days began early and finished late. He was involved with many things and accomplished so much. People I work with tell me that I shouldn’t work so hard, but what they don’t know is that my benchmark is my dad, and compared to him, I’ve got plenty more to give.

He was a good listener. I’ve heard this over and over from his Sycamore colleagues. He knew that when you deal with people on important issues, it was important that they knew they had been heard and understood before he shared his point of view or decision.

He was a private person. A nurse at the Hospice center last week asked us if my dad was a private person. I said, “How would we know?”

He was a quiet cheerleader. When I played sports when I was younger, after the game I’d ask him, “How’d I do?” His comments were usually focused on two things: effort and sportsmanship. Of course, I wanted to know if he thought I’d played well. But he always commented on things like whether I hustled and whether I’d argued with the ref—not what I wanted to hear. I do the same thing to my kids today, because I now know how wise he was to do that for me.

He was a fisherman. And he taught me how to fish, both literally and figuratively. So often in my life I wanted him to tell me what to do, to tell me “the answer”. And he almost never did. His approach was to make me figure it out and decide for myself. He helped me outline my options, frame the issues, ask the right questions, but he nearly always left the final call, and the accountability for the resulting success or failure associated with it, to me. I almost never liked this when he did it, but when I look back, I see the wisdom in his way.

He was always there. I have an example. As a kid, I visited emergency rooms a fair amount due to various sports injuries and accidents. I was there more than all the other kids in the neighborhood combined. My dad spent a lot of hours and a lot of dollars with me there. I bled, he read a magazine. Later, when I was an adult, I accidentally walked through a plate glass window that I thought was an open door (I was in a hurry). My wife drove me to the hospital, and when we went in, there was my dad. We hadn’t called him and to this day I still don’t know how he found out, but somehow he did and he left what he was doing and came to sit with me, just like old times. I really loved that.

He was a sweet man. While he was sometimes private and aloof, it was never out of coldness or apathy. And in his last weeks, when he had so many reasons to be anything but sweet, he was nothing but. When his vulnerability had reached its peak and his heart was open, there was nothing but goodness and kindness. Less than 3 weeks ago, and only a few days before he went to the Hospice center, despite the fact that he could barely walk, he insisted carrying a chain saw to my sister’s car in the driveway. He thought it better for him to do than her because she was 3 months pregnant.

He was my father. When I was young, I thought he was perfect, until he told me he wasn’t, and I believed him because I knew he was honest. Because he loved me, he taught me to be like him in some ways and different from him in others. He was and always will be my dad. I love him. I miss him. I’m proud of him. And I thank him for all he taught me and all he gave me. And I know that his many friends and family members do also. 

I’ll end with this. I can remember a time when I was young, sitting in my father’s lap in a rocking chair. I couldn’t sleep and he was calming me. He rocked slowly, holding me firmly and gently at the same time, rubbing the side of my head, saying nothing but still telling me everything I needed to know: I was safe. I was important. I was loved. Everything is OK. Tomorrow is another day and it will be good. That’s the picture I see in my mind now, of my dad with God.