Harnessing the Diversity Dynamic: Leading by Example

Speech delivered at the Global Women Breakthrough Leaders Programme 2016 by the Secretary to the Treasury, Gabriel Makhlouf, 14 September 2016.

Welcome to the Treasury.  We are in our wharenui and I want to start by saying a few words about this special place.

The Treasury was established in the same year as the Treaty of Waitangi was signed and we place great respect on New Zealand’s bicultural foundations.

Our wharenui - Nga Mokopuna a Tane - is the heart of the Treasury.  It is taonga for all Treasury staff.  In terms of our Kawa and our Tikanga anyone can speak in here; there are no gender restrictions.

And being a heart, it needs to ‘beat’ rather than lie dormant.  So in here, it’s ok to sing, dance, shout, argue, agree, laugh or cry.  The wharenui is a very good place to talk to you about one of the leadership issues of the age, how to harness diversity and its Siamese twin, inclusion.

I want to talk about this today because I’ve decided that, as a Champion for Change, I’m going to take as many opportunities as I can to talk to leaders about issues that matter for New Zealand.  And this one matters.

The Treasury’s role#

Let me start by explaining why I think it matters and why leaders - whether in business, in the public service, in all walks of New Zealand life - need to address it.  I’ll focus on the Treasury as it’s the organisation I know best, but I believe what I’m about to say is relevant to any organisation in New Zealand.

We are the Government’s lead economic and financial adviser.  We see our mission as improving New Zealanders’ living standards.  We want to be a world-leading Treasury partly because we’re ambitious for ourselves but mainly because we’re ambitious for New Zealand.

Living standards are about more than economic growth and GDP.  As Robert Kennedy famously said nearly 50 years ago, GDP “measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.”

Of course living standards do depend on economic performance but it’s not the whole story.  They also depend on things like the quality of our environment, the trust people have in our institutions, and people having the opportunities and skills to live the life they want to lead.

At the heart of the Treasury’s role, at the core of what the New Zealand people expect of us, is the skill of analysis and the exploration of options, the understanding of trade-offs and the presentation of advice to enable choices to be made.

Doing our job well requires knowledge, analytical skills, an understanding of context, and the ability to explain clearly.   It depends on the minds (and the hearts) of the people that make up our organisation.

We already have these skills in the Treasury but we can strengthen them by recognising that the tasks we have to undertake are different to what they were, driven by the pace, complexity and cross-cutting nature of change.

That is why I put a premium on diversity of thought.  And why inclusive diversity in all its forms - ethnic, gender, whatever - is at the core of our continued success as an organisation.

Being a diverse and inclusive organisation makes us stronger, more resilient and insightful.  It helps us to understand the present and better anticipate the challenges and opportunities that may arise in the future.  To put it simply: if we want to do a good job, if we want to be a world-leading economics and finance Ministry, we can’t afford to think the way we’ve always thought.

Diversity dividend - leading by example#

So it makes sense to have a Treasury made up of people that not only have the intellectual horse-power to dig deep into complex issues but have the ability to see, understand and solve them from a range of perspectives.   

The Treasury’s people are 48 percent female and 52 percent male, and the gender balance of management roles is fairly even with 42.4 percent female and 57.6 percent male.

Our gender pay gap is a bit above the public sector average of 14 percent but we are tracking in the right direction.  It’s currently 18 percent, down from 21 percent in 2014 and 32 percent in 2008.

We’re aiming to maintain at least a 40-60 percent gender balance in our leadership cohort, and to keep within a 45-55 percent range across the organisation as a whole. 
Unlike gender, our ethnic diversity is less representative of the population as a whole. 6.4 percent of our staff identify as Māori which compares to the 14 percent of people in the country who do so. 1.5 percent of our staff identify as Pasifika and 7.6 percent as Asian.

As the Pacific population in New Zealand grows - it was 8 percent at the last census - so too does the potential for the Pacific community to make a greater material contribution to New Zealand’s living standards.  And people of Asian ethnicity now make up around 12 percent of our population, and by 2038 this figure is projected to rise to around 20 percent.

In fact there are over two hundred ethnic groups now living in New Zealand and leaders across the country need to be thinking about the implications of this increasing diversity.  For my part I see opportunity to strengthen the Treasury.

Not maximising Māori, Pasifika and Asian contributions to the Treasury is an opportunity lost.  Not maximising Māori, Pasifika and Asian contributions to our economy is an opportunity lost to the country.  It also creates a risk that some New Zealanders may miss out on higher living standards.

So at the Treasury we want to do something about that.

Our commitment to Māori and the Treaty sits at the heart of everything we do.  We’re working hard to attract more Māori staff and to engage with Māori to inform our work.
We’ve embarked on a series of regional conversations with Pacific economic stakeholders and influential leaders in order to listen and learn how we might improve Pacific economic performance.

And we’re at a very early stage of developing a strategy that focuses on our Asian communities.

Looking at our own organisation, we’re aiming for ethnicity representation within plus or minus 5 percent of the working age population.

Taking action#

It’s not a matter of choice whether the Treasury will address the big opportunities and challenges that New Zealand faces - we must - but we do have a choice about how we address them.  

One example of ‘the how’ is in the use of new recruitment practices which include ‘blind applications’ to reduce unconscious bias.

This may seem like a small step but a key reason some organisations don’t become more diverse is because, without knowing it, they look for other people who mirror their current make up.

They aren’t consciously rejecting people that are different; they’re unconsciously excluding them.  Unconscious bias is a glass wall that can stop an organisation from becoming more diverse by excluding ‘outsiders’ who don’t fit the mould.

It’s an organisational blind spot. 

Importantly, it can also mean organisations don’t get the best from the diversity that they do have, because people suppress differences in order to fit in and succeed.

That is why I emphasise that diversity has a Siamese twin called inclusion.

We want people to feel like they can be themselves at work.  This is something we’re looking at carefully.  We’re asking the question: can everyone be themselves in our culture, or do you have to leave yourself at the door when you come to work?

Leadership has a critical role to play here. The job of leaders is to create a work environment where different perspectives are encouraged and can actually be heard.

Our values of being bold, innovative, passionate, ambitious, collaborative, challenging, adaptable and focused reflect our commitment to this.

Organisations are more successful when they understand the communities they serve.  For the Treasury, accessing talent from across our community and enabling the voice of that talent to be heard in the building strengthens us.

And I should add that our talent isn’t based simply around gender and ethnic diversity.  We employ people from a range of disciplines, experiences and backgrounds.  So along with economists and accountants, we’ve got qualified biologists, psychologists, lawyers, anthropologists, sociologists, historians, musicologists, engineers and even an architect.


Diversity helps us to understand new challenges, to work at pace, to see (and seize) new opportunities and to cope with change.

It helps us to understand and respond faster. It helps us to anticipate, stops us from ossifying, keeps us fresh, make us more relevant, more influential and more successful.

It’s been said that the Treasury knows the price of everything but the value of nothing. 

Well, we aren’t actually able to put a definitive price on diversity but let me assure you, we absolutely value it.

The greater the diversity within an organisation, the greater the likelihood that people will think in different ways, that they’ll challenge each other’s views, that they’ll develop independent thinking and that they’ll spot opportunities or risks.

We want to be full of people who are proud of their whakapapa, that appreciate what they’ve learned but also recognise that there is more to learn from each other and from the wider world.

We don’t have a choice of whether we want to have greater diversity of thought, or whether our approach to new ideas should be one of inclusiveness. If we don’t, the world will change around us and we’ll become less effective rather than more so.  That’s not a world-leading economics and finance Ministry.  And mediocrity isn’t what I aspire to.
I’m determined to continue to lead a culture here at the Treasury where diversity of thought is encouraged, where it can flourish, where it is inclusive and where it is harnessed to make a real difference for the lives of New Zealanders.  I hope that’s an aspiration which you as leaders also share.

Thank you.