12/03/2014 07:56 GMT | Updated 11/05/2014 06:59 BST

Why Businesses Keep Misdiagnosing Gender Diversity

Last Saturday saw the 114th International Women's Day. Recognised globally, the initiative aims to celebrate the social, political and economic achievements of women, while focusing on areas requiring further action. One such area, thrown to the top of the news agenda over past weeks, is women's position in both the senior ranks of business and civil administration, and more broadly in the workplace.

We've recently seen Honda appoint a female board member for the first time - a move in line with plans to revive the Japanese economy by being open and inclusive, including putting more women in leadership positions. While Dame Alison Carnwath, Chair at Land Securities also made headlines with her call for employers to allow six year career breaks for mothers. These examples point to the growing recognition that a diverse leadership team can bring business and economic benefits; and that companies will have to adapt to cater for this top female talent.

Gender is making the headlines, and rightly so, but it's also a crucial lens through which broader issues of workplace diversity and organisational effectiveness/performance can be considered

Modern medicine

The reality is that many of today's managers, and the cultures of the organisations they run, remain out of date or at least in need of some modernisation. Many are struggling to recruit, keep or promote women, while also failing to motivate their people across the company. Both Generation Y and the aging workforce present unique challenges, requiring companies to create more flexible leadership offerings to take advantage of their (very) different experience, skillsets and lifestyle requirements.

A significant factor behind this is that organisations of the 20th century were essentially designed to produce efficiency. The way that they managed people, and approached management, served that purpose well but organisations are now struggling to cope with a different world: new business challenges require less siloed and more adaptable, innovative organisations to fulfill customer demand. What's more, we're seeing the future success of many organisations becoming dependent on their ability to forge relationships and work collaboratively to enter new markets. And with research suggesting that women are more empathetic and better at conflict management than men, surely it makes sense for them to lead this collaborative charge?

Healthy organisations

Data shows us that diverse organisations are more likely to have the wider set of skills needed in modern matrix organisations. McKinsey's Women Matter report, meanwhile, highlights that companies with three or more women in top management functions deliver ten per cent better return on equity. Likewise, Grant Thornton's Women in Business research further confirms gender diversity's prowess, showing that companies with more women holding top positions achieve 16 per cent higher return on sales and 26 per cent higher return on invested capital.

To achieve greater diversity, the best organisations innovate and understand what motivates their people to perform, allowing for greater flexibility. Not to be 'nice' but instead to enable them to make the very most of business opportunities. Those organisations powering ahead in the present climate are those that have re-examined the work and role of the employee to benefit both the person and the organisation. In these companies, corporate culture and management styles are measured and actively managed. The result is both better delivery and a more diverse and sustainable organisation.

Finding a cure

It is often difficult for 20th century managers to realise the need for an innovative approach. After all, successful managers feel that they know 'what works here' and their own progression stands testament to the success of that way of work. It is the 'outsiders' - those not traditionally in those ranks, such as women, Gen Y, non-westerners and indeed employees on the front-line - who will often see this more clearly than management. Organisations must listen to their employees as it is their dissatisfaction which tells them what and where the problems are.

The time and effort put into existing approaches to gender diversity is essentially wasted if those approaches are designed to help 'different people' fit in. A more effective approach is to reconsider how well you understand your people and what makes them effective, so as to properly focus on changing the organisation and the way it manages them - both to maximise their productivity and improve your ability to get business done.

All that's required now is for management to 'man up' and get on with it.