Diversity and inclusion in financial services
Julia Streets, June 05, 2018
Promises to improve their employee mix and salary equality are only to be encouraged, but are the numbers really changing?
I worry that ‘commitment to diversity and inclusion’ (D&I) has fast become the trip-off-the-tongue marketing jargon, right up there with ‘innovation is in our DNA’.
I’m delighted to see growing appreciation of the value of D&I. Yet the numbers fall short and headlines remind us of how far we have yet to go before we achieve gender parity, let alone ethnic equality, full embracement of LGBTQ+ issues, disability rights and consideration of the value of later life employees.
Keen to shine a light on successful progress, call out areas requiring further focus and offer practical ideas to help drive change, last October I launched the ‘DiverCity Podcast', interviewing business leaders and D&I specialists to review progress, identify areas requiring focus and offer ideas to drive change.
D&I drives performance
The McKinsey report noted that in 2017 companies in the top quartile for executive team gender diversity were 21% more likely to return above-average profitability and others suggest these top quartile firms could deliver as much as a 53% greater return on equity. Yet business leaders seem slow on the uptake. Only 40% of businesses believe diversity is important to success, merely 14% taking action to improve the senior team make-up, according to Grant Thornton.
Just ask any senior executive and they’ll list high-performing teams as a key attribute for success. Technologists will tell you that to be brilliant you need a variety of people, brains and skills to try, test, adapt and deliver. And that’s the opportunity. The opportunity to actively encourage the difference. To listen, learn, harness the potential and enjoy the results.
As an industry commentator and entrepreneur, I speak on many platforms about the importance of data management, analysis and enrichment as core to product and service innovation and gaining a competitive advantage. This requires a specific breed of emerging talent: employees that may not naturally be attracted to the world of finance, pulled instead by the appeal of Amazon, Facebook, Google or other ‘fintech’ disruptors. Firms must adapt in the fight for talent – talent I can confidently predict does not like to sport ‘business attire’ or engage with corporate structures.
This reality is challenging institutions to think and behave differently and there are many wonderful initiatives helping firms attract, retain and nurture new and returning talent.
The talent is out there, it’s a matter of knowing where to look
Ethnic representation in financial services – and beyond – is shockingly bad and in the podcast I invite guests to explore ways to find, attract, retain and inspire black, Asian and minority ethnic (BAME) employees. There is an untapped pool of potential talent out there; the question is how to connect with it.
Most leaders and business owners nod along to these arguments, but complain of a lack of supply. “We can’t find the talent. They’re just not coming through the pipeline.”
If we are looking in the same places as before we’ll keep getting the same results. So look beyond. Look to the work of We Are The City, intent on feeding the female pipeline; The Miranda Brawn Diversity Leadership Foundation and the Black British Awards schemes helping BAME talent to rise; The Brokerage, a social mobility initiative connecting young Londoners with financial and professional services employers; and Makers Academy, focused on nurturing coding talent from ages 16 to 66. This is to name simply a few of many impressive initiatives.
Breaking through the ‘sticky middle’
It is no coincidence that I return to this continually in each episode. To unlock performance we have to display some empathy for the middle management layers. Rather than bandy around the ‘pale, male and stale’ mantra, why not recognise that for individuals 20 years into their careers, change can be hard and scary. Taking risks takes courage and I believe the key to change rests with considering middle management motivation and the power of strong role modelling and leadership.
Some firms are focusing on helping these middle managers by offering practical ideas, showcasing great practice from above, delivering coaching support, and rewarding bravery to take new steps. Ultimately this will reap dividends and drive results, not to mention inspire and motivate others. The guests were generous with suggestions that included blind CVs, reverse mentoring across the organisation, creating safe space project task forces, engaging across corporate networks, and offering inter-network support and leadership engagement.
As I write, we are in the final phases of recording the last podcast in the second series. So far, we have covered Millennial and gender intelligence; compared and contrasted the worlds of venture capital and private equity, capital markets and banking; the value of engaging male networks; and how to reach out to inspire school leavers and students. We have only scratched the surface on mental health issues and faith.
We have a way to go, but I am optimistic. I am encouraged that the debate becomes increasingly commercially relevant to improving corporate performance. I welcome investor awareness and policy impetus in scrutinising pay gaps and diversity data, for they all combine to drive momentum.
We only need mention #MeToo, Weinstein, Presidents Club, and the smartest in the City are clear that traditional styles of leadership, culture, recruitment and communication can no longer persist. We’re on a good road, we just need to accelerate the pace to fully reap the rewards.
Julia Streets is the host of DiverCity Podcast and CEO of Streets Consulting