Apiramy Jeyarajah, head of UK wholesale at Aviva Investors, and Mitesh Sheth, former CEO of Redington, explain what investment organisations can do to maximise the return on their most important assets – their people.

Read this article to understand:

  • Why businesses should take an intersectional approach to diversity, equity and inclusion
  • The three principles companies can follow to go beyond lip-service and deliver fundamental change
  • Why middle management will be key to the success of DE&I initiatives

For Great Britain, the 1996 Summer Olympic Games in Atlanta were a colossal disappointment. The team won a single gold medal and a meagre 15 medals overall, finishing a lowly 36th in the country rankings. Athletes complained of a lack of professional preparation and funding. After the Games ended, a pair of British divers resorted to selling their kit to tourists on the street.

Fast-forward to 2012 and Great Britain, now rebranded Team GB, exceeded all expectations at the London Olympics, winning 65 medals, including 29 golds, in front of jubilant crowds. The reversal in the team’s fortunes was attributed to a comprehensive overhaul of sport in the UK. World-class coaches were brought in from overseas; funding was increased, freeing athletes to focus on training; and a fresh, data-led approach to scouting was put in place at the grassroots to widen opportunity and identify new talent.

Fundamental change

Team GB’s comeback is a useful case study for any industry that needs root-and-branch reform. Take the investment sector, and in particular, its woeful record on diversity, equity and inclusion (DE&I).

Investment organisations have belatedly recognised the need to move with the times, but their DE&I initiatives are too often piecemeal and half-hearted. The industry often pays over the odds for mediocre candidates that fit the traditional profile of a finance professional, while overlooking brilliant people from minority backgrounds. Exclusory practices and insidious biases persist. Fundamental changes in business structures, leadership styles and working cultures are required, akin to the revolution in British sport that followed the debacle of 1996.

If this shift is to be truly transformational, it needs to be intersectional, that is, ready to address existing imbalances of power (see Figure 1). We must be honest, though. Implementing the necessary reforms won’t always be easy. DE&I projects may slow us down. Listening to a wider range of voices means meetings might take longer. The commercial benefits are not always guaranteed, at least in the short term. Businesses will need to remain agile through the process, experimenting with different working methods to discover the best route forward.

But there is no doubt this is the right thing to do. It is about being brave enough to stand up for a more diverse and welcoming industry. It’s about creating workplaces that satisfy the deepest human need: to belong. Businesses that stay the course will discover other benefits, too – they should become more creative, more productive and, ultimately, deliver a better service for clients in the long run.

There is a lot to be done. So where should leaders begin? Here we present three principles for executives who want to level the playing field and make their businesses more hospitable to people from diverse backgrounds.

Figure 1: The intersectionality wheel: To maximise their return on people, companies should empower employees across all the intersections, rather than focusing on the inner segments alone
A diversity wheel
Source: Aviva Investors, 2021. Original diagram sourced from ‘Intersectionality: What is it and why it matters’, The University of British Columbia, March 8, 2021, and Mission Include

1. Review hiring practices to focus on “add” not “fit”

Recruiting from a more diverse talent pool is an obvious first step. To start with, businesses need to rethink practices such as the “like-for-like” hire and seek out people who add something new, rather than those who fit into an existing organisational framework. Minorities should not be “assimilated” but encouraged to contribute on their own terms.

It is important to be specific. Leaders shouldn’t just tell recruiters they want to hire more women; like Team GB’s coaches, they should adopt a data-led approach and obtain granular information on the composition of their teams, identifying the specific talent and skillsets they are lacking. They should ask what they can do to appeal to working-class black women, or gay women, or trans women, or women returning from a career break.

Recognising the overlapping nature of many diversity characteristics, one potential way of reaching such candidates could be to focus on socioeconomic diversity. It is also worth keeping in mind that the post-COVID environment, in which remote working is more common, provides an opportunity to reach groups who might be more comfortable operating outside the office, such as those from strict religious backgrounds.

When it comes to the interview process, panels should be as diverse as possible and focus on skills and strengths rather than past experience in a similar role – people with marginalised characteristics might have been overlooked for progression despite being eminently qualified. Adjustments to the usual format can also make the process fairer: providing questions in advance can be beneficial for neurodiverse applicants, for example.

2. Retain diverse talent

Hiring a more diverse range of people will not be much use if they feel unwelcome once they walk through the door. This is partly a matter of good policy and robust standards. Commitments to improving representation of marginalised groups, both internally and among investee companies and suppliers, send a positive message. But executives must go further if they wish to retain talent over the longer term.

i) Acknowledge your unconscious bias and remain open to other perspectives

Leaders must be ready to adopt a new style of management, conducive to getting the best out of diverse teams – this will be key to the “how” of DE&I implementation. The old-fashioned image of a successful leader as ruthless and single-minded, as opposed to consultative and empathetic, remains stubbornly persistent in the investment industry. A modern leader should be encouraged to challenge this stereotype; they must be willing to listen to others, question their own convictions and take criticism.

Leaders must be ready to identify and confront unconscious bias – their own, and that of other people

They must also be ready to identify and confront unconscious bias – their own, and that of other people – as well as overt discrimination. When polled, women, people of colour and LGBTQ+ workers consistently say that ensuring a “bias-free” day-to-day experience is the most effective way to improve diversity and inclusion.1

As the author Dan Pink has observed, the more power people accrue, the less likely they are to empathise with others; forward-thinking leaders will be aware of this tendency and take steps to guard against it.2 Unconscious bias and anti-racism training can help leaders identify their blind spots and become more open to new perspectives. Given empathy is rooted in being able to walk in someone else’s shoes, reverse mentoring schemes can introduce senior executives to employees from marginalised backgrounds, helping them see the world from a different point of view. By embracing these kinds of initiatives, senior staff can lead by example.

ii) Support line managers

Change at the top will not be sufficient: research shows that it is, in fact, middle management who will be key to the success or failure of most DE&I initiatives. A recent study from Boston Consulting Group (BCG) found that in organisations where top executives were committed to diversity and line managers were not, only 65 per cent of employees felt able to be their “authentic selves” at work. This translated into a retention issue: when their direct managers were not committed to DE&I, employees were twice as likely to feel excluded and almost three times more likely to seek a job elsewhere.3

It is critically important to ensure front-line managers take diversity initiatives seriously

These findings make intuitive sense. Front-line managers have power over hiring and promotion, and therefore wield an outsized influence over the lives of employees in an organisation. It is therefore critically important to ensure this cohort takes diversity initiatives seriously. One way to do this is to build DE&I metrics into the performance and remuneration criteria for line managers.

But it is also important to recognise these managers are often under pressure to deliver on other fronts. They must be properly supported and given the time and space to implement the DE&I agenda, even if it comes with a negative commercial impact in the short term.

Leadership workshops will be important in this regard. Many people are promoted into leadership roles without any relevant training, and this can be a problem when it comes to diversity and inclusion. Greater diversity of thought will naturally lead to differences of opinion and even conflict. Leaders need training to be able to facilitate difficult conversations and ensure this conflict is productive. The objective is for teams to embrace diversity of thought so that it leads to openness and curiosity, rather than insular, defensive cliques. Note that change is often achieved most impactfully when training is delivered by peers and when there’s a safe space to speak, rather than just attending external training sessions.

iii) Ensure career progression opportunities are open to everyone

A more empathetic management style can make all the difference to the experience of employees with intersectional characteristics, who are more likely to face discrimination at work and wider society. They will therefore benefit from a personalised approach: in performance reviews, managers should provide honest, constructive feedback and tailor their approach to the needs of each individual, taking the time to identify the kinds of support they need to thrive.

Mentoring can be helpful, but often doesn’t go far enough

Mentoring can be helpful, but often doesn’t go far enough. Sponsorship of minority talent is a more powerful tool. Sponsors can help employees gain the soft skills they need to progress and navigate organisational hierarchies. Good sponsors will also be allies, advocating for the rights of minorities even when they are not present in the room.

In this way, sponsors can help ensure talented people get the rewards they deserve. Too often, the work of high-performing individuals from minority backgrounds goes unnoticed, their talent squandered while others are promoted ahead of them. We need to ensure everyone is given an opportunity, rather than prioritising the needs of the pushiest team members or those most adept at networking with the higher-ups.

If we can support them and encourage their progression, intersectional employees who rise through the ranks can act as role models to others. There will be other benefits, too: opening a path for internal talent helps with succession planning, facilitating a smoother transition than might be the case with an external hire.

3. Change the mindset

Taken together, these steps should help change the organisational culture, making it more welcoming and inclusive. But executives should never rest on their laurels.

Consultancy Gartner recommends companies regularly poll employees on how they perceive the working environment, based on metrics including fair treatment, respect, freedom to make decisions, trust and a sense of belonging. As with diversity, firms can use this information to set benchmarks and targets for improvement, bringing together data points from across the employee lifecycle, from recruitment to retention to exit.4

You can’t measure everything on a spreadsheet, and numbers will only take you so far

But you can’t measure everything on a spreadsheet, and numbers will only take you so far. After all, the problem is not just the predominance of privileged heterosexual white men in positions of power. It’s the shared cultural reference points enjoyed by people from privileged families. It’s the persistence of laddish banter and heavy drinking at after-work socials and industry events. It’s the adherence to old-fashioned ways of thinking. As former PepsiCo CEO Indra Nooyi perceptively put it: “Diversity is a numbers game; inclusion is a mindset. You can’t deal with the numbers without changing the mindset to make diverse people, women, people of colour, feel included.”5

One way to change the mindset over the longer term is to empower staff to express themselves and speak up. The literature on intersectionality teaches us that while it is important to provide more opportunities to women, or those with disabilities, or gender non-binary people, such efforts will inevitably leave some individuals out. No-one fits neatly into one category and marginalised characteristics can have a compounding effect. We need to ensure people feel psychologically safe enough to talk about the specific, overlapping challenges they face, as well as their distinctive talents and motivations.

Storytelling initiatives can provide a platform for this kind of self-expression: The Diversity Project’s #FishOutofWater campaign is a good example.6 The idea here is not to elicit sympathy through X-Factor-style sob stories, but to promote understanding. If people understand each other, they will communicate more effectively and work more harmoniously as a team. Managers who know members of their teams as individuals can help them fulfil their potential and provide support when they are at risk of becoming isolated.

We can remake our industry so that it is more tolerant, welcoming, and kinder each day

Changing the mindset will not happen overnight, just as Team GB took time to rise from the embarrassment of Atlanta. Progress will be slow and occasionally painful, and we will all make mistakes along the way. A certain amount of conflict is inevitable. But by rethinking the old rules and listening to those who have traditionally been excluded, we can begin to make a difference, and remake our industry so that it is more tolerant, welcoming, and kinder each day. The rewards may not be as immediately tangible as a gold medal, but they will be just as satisfying and ultimately more beneficial.

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