These days there is never-ending talk in financial institutions about diversity and inclusion, particularly as it relates to women. Executives and boards know that to be innovative and relevant in the years to come they need to address this issue. They are paying attention to research like the study done at Deloitte Insights which found that organizations with an inclusive culture are eight times more likely to achieve better business outcomes.
However, when we take a close look at the fundamentals of diversity and inclusion, we see that the diversity part of the equation gets more attention because it is easier to measure. The inclusion part is trickier and more complex. Deloitte Insights identifies a basic formula: “Diversity +inclusion = better business outcomes. Yet diversity without inclusion in worthless.” A firm can work towards meeting its diversity goals, but if it doesn’t have an inclusive culture where people feel they belong, those people don’t stay or thrive. The organization ultimately misses out on the benefits of its D & I initiatives.
In a study on inclusive leadership, Catalyst, a global nonprofit focused on women in the workplace, discovered that when employees feel included, they are:
• more innovative;
• more willing to go above and beyond to help other team members; and,
• better at perceiving similarities with coworkers and engendering a feeling of belonging while perceiving differences that lead to feelings that it’s OK to be unique
As leadership consultants, we work with financial institutions of all sizes that are struggling with how to build inclusive cultures and attract, retain and advance women. We’ve taken a deep dive into the research and our own decades of experience to share key considerations as you evaluate how inclusive your culture is.
UNDERSTAND THE PROBLEM
To feel “included” in an organization means to feel accepted as an insider in the workplace while maintaining your own unique identity.Research recognizes three fundamental requirements of an inclusive workplace:
a. Employees are treated with respect
b. Employees are valued for their strengths
c. Leaders do what’s right
These elements make employees happier, more confident and ultimately more productive.
LOOK BEYOND THE OBVIOUS
Putting in place new HR offerings like launching a women’s networking group or offering unconscious bias training, while helpful, only addresses a small piece of what’s needed. Like most important things, it’s a complex systemic issue requiring a broad look at the internal factors related to shifting an organizational system to better promote a feeling of inclusion.
The executive team needs to ensure their practices support their aggressive diversity goals. “Add women and stir” doesn’t work. Many organizational structures were originally designed by men to fit men’s lifestyles. It’s folly to simply place women into a traditional structure and expect them to thrive. Often women falter because they don’t have the networks,sponsors and processes in place to back their success which exacerbates the view that women struggle in certain leadership roles.
One significant obstacle is that a substantial pay gap still exists between men and women doing the same work. This is demotivating to women who are working just as hard and getting results that are equal to or better than those of their male counterparts.
For instance, in a large regional commercial bank servicing New England and New York, a woman we’ll call Mary was promoted to the head of mortgages. She was excited and eager to surpass her group’s objectives. Yet soon after her move, Mary discovered that a new male hire below her was making$40,000 more than she was. She became angry and resentful, talking to other senior woman about the inequities in the bank.
When underlying organizational systems, such as pay rates,show a lack of gender parity, women don’t feel equally valued or respected. The bank eventually responded and adjusted the pay discrepancy; however, it didn’t make broad changes across the bank.
The good news is that some banks are leading the way in this area as part of their commitment to providing an inclusive and rewarding experience for all. In January 2018, Bank of America announced that for employees in the US and UK, on average, compensation received by women is equal to 99 percent of what is received by men. These larger businesses can be role models for smaller firms by introducing more progressive organizational systems.
DIAGNOSE YOUR CULTURE AND IDENTIFY PATTERNS
Often executives make assumptions about their culture. The stories are plentiful. Rachna Mukerjee, chief human resources officer from Schneider Electric, while offering remarks relating to including women in its culture, said “I already understand the need and we are doing it.” Soon after Managing Director Anil Chaudhry convinced him to conduct a round table with company women. The executive team was stunned to learn how unhappy their female employees were. That was a tipping point and significant changes ensued.
The best way to confirm or challenge your assumptions is to examine where people thrive within the organization. Robin Ely, faculty chair of Harvard Business School’s Gender Initiative, suggests you ask deeper level questions on how you’re doing. At first, examine your culture, not with gender in mind, and then tease out where gender issues show up most.
Ask questions such as:
• What does thriving or not thriving look like?
• What does it really take to get work done effectively here?
• What are the critical junctures in career paths?
With these answers you can begin to see the norms,structures and patterns that direct your people. You can see where the pain points lie. Then you can check your assumptions and begin a strategy on how to address any issues that surfaced.
For example, one financial services firm we worked with found that many key decisions were made in informal settings where mostly men were present, such as the golf course or over drinks after work. Once this pattern was discovered, the firm made a conscious effort to include women in a wider variety of outings that gave them more access to senior management.
In January 2019, Bank of America won the Catalyst Award for building workplaces that work for women. Since 2015, one of the bank’s key practices to understand patterns is the use of “Courageous Conversations.”These are hosted dialogues ranging from small conversations with teams to enterprise conversations with community partners. The topics include race,gender dynamics, social justice, national current events and more. During the wake of violence in Dallas, Baton Rouge, Minneapolis and Charlotte, the bank hosted a conversation that brought out into the open issues that were on the minds of their people instead of them privately brewing. Through these conversations,employees see the bank’s commitment to including all voices. In addition, it’s an opportunity to identify areas where the bank’s practices don’t align with their employees’ ability to thrive.
Given these thoughts, do you think the women in your organization feel fully included?
If you’re not sure, start asking questions to diagnose what’s really going on. A diverse and inclusive workplace is worth the effort so that you get the full benefit of your employees’ talents and contributions.