INDUSTRY INSIGHT

Fostering inclusion and diversity in the Arabian Gulf chemical industry

Navigating through organizational boundaries with ease and creating dynamic teams is becoming especially important for future leaders. In the wake of the global COVID-19 outbreak, companies need to remain competitive by becoming more diverse and innovative, specifically when it comes to exploring new ways of working and utilizing technologies and existing capabilities.

The chemical industry today increasingly recognizes that the quality of leadership available within organizations will make a competitive difference in the way industries adapt to the “new normal”. Therefore, having top management leadership on Diversity and Inclusion (D&I) is indispensable for companies’ future success.

Leaders need to understand that inclusion of diverse talent brings better performance and greater innovation. As businesses across the world, including those in the chemical industry, contend with the challenges emanating from the COVID crisis, diversity and inclusion remains critical for the chemical industry’s recovery and resilience.

Current global and market challenges unintentionally drive companies away from D&I to focus more on strategic priorities that will help navigate the COVID-19 crisis. Many chemical companies have put their D&I strategies on hold and are now focused more on adapting to new ways of working and maintaining productivity, which could place the chemical industry at a disadvantage.

Some of the qualities that characterize diverse and inclusive companies – notably innovation and resilience – will be much needed as companies recover from the crisis. The chemical industry is known to be innovation driven, and diverse teams can in fact play a key role in driving innovation performance. With this in mind, companies should address the importance of including D&I in their strategies to ensure a smoother road to recovery.

“Leaders need to understand that inclusion of diverse talent brings better performance and greater innovation.”

Figure 1: A Snapshot of D&I in the Chemical Industry
Source: Accelerating Organizational Performance in the Arabian Gulf Petrochemical Industry, GPCA and Heidrick & Struggles, June 2020

“Companies that make inclusion a way of life tap into a deep wellspring of competitive advantage.”

Reversing the formula

Reversing the order of D&I is the key to achieving organizational success. Many companies in the chemical industry are starting to view it as Inclusion and Diversity (I&D) instead of Diversity and Inclusion (D&I).

Companies that make inclusion a way of life tap into a deep wellspring of competitive advantage. They drive the business forward and become an employer of choice not just among diverse talent, but also among everyone who understands the energizing effect inclusive cultures can have on their careers. Ultimately, chemical companies need to put a stronger emphasis on inclusion to be able to accelerate business performance in the long term.

To create dynamic teams, seeking inclusion is seen as a necessary precondition. It also helps build sustainable diversity within the organization. According to research conducted by Heidrick & Struggles, many companies are seeking more innovative ways to pursue diversity, but only few companies in the chemical industry have developed an approach to maintain a diverse workforce through seeking an inclusion-first vision. These companies have become pioneering chemical market leaders that prioritize inclusion and accelerate business performance.

D&I data findings

In a study conducted by GPCA and Heidrick & Struggles on Accelerating Organizational Performance in the GCC chemical industry, results focused on D&I show that the chemical industry leaves room for improvement. Chemical companies need the innovation and superior performance that a diverse workforce yields. In the chemical industry, however, the executive ranks have traditionally been homogenous, with companies taking a fairly conservative approach to risk-management. This in turn makes attracting and retaining diverse talent more challenging.

In the Accelerating Organizational Performance in the Arabian Gulf Petrochemical Industry- 2020 Study, data was collected and analyzed for ten questions targeting diversity and inclusion. Questions are administered through the Organization Accelerator Questionnaire (OAQ), which is a diagnostic tool that provides an accurate acceleration profile of a company’s ability to Mobilize, Execute and Transform with Agility. Results are broken down into different OAQ categories: Accelerating (≥70%), Advancing (60-69%), Steady (50-59%), Lagging (40-49%) and Derailing (≤39%).

With an overall result of 53%, regional participating companies are in the ‘steady’ category for diversity and inclusion (see figure 2: D&I Results). Of all ten questions asked, the highest category recorded for the regional chemical industry fell under the advancing category. The results show that companies value their employees for their unique contributions (69%, ‘advancing’), employees are encouraged to speak up (60%, ‘advancing’), and the leaders speak authentically about their commitment to D&I (60%, ‘advancing’).

Still, a special focus should be placed on the lowest D&I scoring questions as they fall under the “lagging” category and should be a strategic imperative for companies. The following results fell under the lowest scoring questions: the participating companies do not really seem to challenge people who do not demonstrate inclusive behaviors (40%, ‘lagging’), the progress on D&I does not support in attracting the best talent (41%, ‘lagging’) and the companies have not really made visible progress in building representation of diverse talent at all levels across the business (44%, ‘lagging’). (See table below)

Figure 2: D&I Results
Source: Accelerating Organizational Performance in the Arabian Gulf Petrochemical Industry, GPCA and Heidrick & Struggles, June 2020

“Chemical companies need the innovation and superior performance that a diverse workforce yields.”

“Regional companies should leverage the presence of a diverse workforce to gain advantage on a regional and global scale.”

Reversing the formula and achieving inclusion and diversity (I&D) in the chemical industry will help to create greater competitive advantage for regional players. The study results indicate that overall, the GCC chemical companies researched are in the ‘steady’ category with regards to D&I.

They have not made visible progress in building representation of diverse talent at all levels across the business yet, leaving room for improvement, especially in demonstrating inclusive behavior. Inclusivity is important because it drives diversity. It would allow a different (more inclusive) culture in which diversity could prosper.

However, GCC chemical companies fall under the “lagging” category for demonstrating inclusive behavior, with results recorded around 40%. This clearly means that simply increasing the number of a diverse workforce in a company is not enough to achieve I&D.

Companies need to focus on driving inclusion first, and diversity will take care of itself. The GCC region is diverse with a workforce ranging from various countries. Regional companies should leverage the presence of a diverse workforce to gain advantage on a regional and global scale. It is important that companies follow an inclusive, business-driven strategy that consists of putting inclusion first, leading from the top, aiming for a deepening and lasting cultural change, and fine-tuning talent strategy.

Moving forward

The benefits of I&D are clear, and they should not change during a crisis. Fostering I&D in the chemical industry has never appeared more pressing – and challenging at the same time. Chemical companies need to continue driving I&D to accelerate business performance and drive their firms forward. Pulling back on I&D may place chemical players at a disadvantage, and result in a failure to better position themselves for growth and renewed success.

Here in the Arabian Gulf, overall regional results indicate that there certainly is room for improvement, with the industry falling within the “steady” category on the D&I front. If they are to lead by example, regional chemical companies would need to work on fostering diversity and putting it to work through inclusion. Areas for improvement include the representation and attraction of diverse talent at chemical firms today. Acting on these key drivers to maintain and accelerate I&D will be key moving forward for regional chemical companies, especially as the COVID-19 pandemic continues to pose challenges for businesses and their employees.

“If they are to lead by example, regional chemical companies would need to work on fostering diversity and putting it to work through inclusion.”

To learn more about diversity and inclusion in the regional chemical industry, read the GPCA report released in June 2020 titled Accelerating Organizational Performance in the Arabian Gulf Petrochemical Industry. The full report is available exclusively for GPCA members.

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