Hot Topic: Becoming intentional about diversity and inclusion

In a Q&A with Jenni Hibbert, global managing partner for financial services practice at Heidrick & Struggles, we discuss diversity and inclusion in the financial sector.

In November 2018, executive search firm Heidrick & Struggles made a public pledge to clients, candidates and employees that a minimum of half of the initial board candidates presented to clients globally on an annual basis would be diverse.

“Our firm is committed to fostering a talent landscape as diverse as the world we live in to better serve our clients and represent our employees,” said president and CEO Krishnan Rajagopalan.

We spoke to Jenni Hibbert, Heidrick & Struggles’ first global managing partner for its financial services practice, for insights into the progress of the diversity and inclusion (D&I) agenda in the financial sector.

Q: What is the most important thing firms can do to promote D&I?

There’s an absolute need to be intentional around driving the D&I agenda. This means building role models right at the top of the house and making sure that you don’t just hire in diverse talent but combine strategically orientated hires with growing your own bench of talent that reflects the D&I culture.

In growing your own, you need to ensure that diverse people intentionally go out and get the right experience that equips them for the big jobs. Otherwise, we see financial services organisations being caught in what I would describe as “the beautiful catch 22”: they are very real in their ambition to have more diverse leaders, but the diverse talent is falling short at the assessment stage, because they haven’t been connected to the right experiences.

Q: Does the financial services sector live up to its reputation as an ‘old boys’ club’?

I think the picture has changed due to the pace and complexity of change; organisations need to be much more agile and open to disruption. Former ‘old-school’ ecosystems have either been broken down or are being broken down. The need to respond in a more complex manner has driven that. But there are still pockets of financial services with elements of what you describe.

“Former ‘old-school’ ecosystems have either been broken down or are being broken down”

Q: What still needs to be done?

There’s an absolute piece around role-modelling, and role-modelling difference. And celebrating those who celebrate success in a different way than those before them.

I think that a lot of it is focused on culture. Of course, the regulator is focused on culture now as well: auditing cultures in a way that rewards inclusivity and tying that inclusivity to the bottom line; being able to demonstrate that inclusivity doesn’t just make sense from a social mobility perspective, it clearly drives greater commercial success.

Q: Who is leading the field in aspects of D&I?

In the UK, AXA has created a culture where it’s as acceptable for male leaders to take parental leave as it is for female leaders. It’s about being intentional, and this being role-modelled by relatively senior people within the organisation.

At Hiscox, success is very much judged around commercial outcomes and behaviours rather than ‘face time’; flexible working is embraced there, as long as the results come through. And Zurich is also being intentional around D&I: all three of Zurich’s big regional markets are led by women.

There are examples all over the place of firms being intentional in some ways; the trick is to bring it all together. We need more practical changes to break down common assumptions around what is considered ‘normal’ – things that actually stifle the ability of diverse talent.

Q: How do you help your clients embrace D&I?

On the search side of our business, whether or not clients put diversity in the room as a priority, we put it in the room. We have a stated target around our board slate that 50% of the initial ideas we show a client will be diverse. We’re not just intentional at board level, but at all levels.

“We’re really trying to hold our clients true to this intentionality throughout the course of the search process”

We’ll challenge, at the briefing stage, if we think the brief will discount most talent that’s diverse and encourage them to shift in that definition. If the client’s interview panel is completely non-diverse, we’ll suggest they change it. If a diverse candidate needs a bit more time to think about whether or not it’s a fit for them, we encourage the client, within the realms of what is possible, to give them that time.

We’re really trying to hold our clients true to this intentionality throughout the course of the search process.

Our consulting arm does a lot of work around supporting clients as they are looking to grow their internal bench of diverse talent, whether that’s through coaching, assessment or performance management.

Q: What do you say to firms that are resistant?

You’ve got to start with some commercial hard truths; if you’re dealing with an organisation that’s resistant, it’s because they don’t understand the commercial reality.

There’s a wealth of data about this: appropriately diverse organisations are more commercially successful.

Some of that is around what we’ve described in terms of the complexity and uncertainty of today’s environment.

“If you do not focus on building up your own pipeline of
diverse talent, you’re not capturing a significant portion of
the workforce”

On the one hand, leaders have to have their hands firmly on the tiller, but they also need to be far more delegated in their decision-making. They have to have their teams thinking too; they can’t presume to have all the answers. And that delegated style of decision-making does speak to leaders who are diverse and who have grown up equipping themselves in a different way.

If you do not build a diverse team, you will not outperform in the way that you would if you did; and your competitors will if they do. That’s truth number one. Truth number two is if you do not focus on building up your own pipeline of diverse talent, you’re not capturing a significant portion of the workforce.

Q: Would you now put the emphasis on inclusion?

Yes, we’ve seen organisations fall into the trap of focusing on the ‘D’ and ignoring the ‘I’. It’s counterproductive.

To give a live example, if you place a female around a board table in the scenario where they’re the only woman (and they’ve been hired because their approach to problem solving and influencing is different), but don’t then build a culture of inclusivity around that appointment, you run a high risk of ‘tissue rejection’ and of that woman being deemed to have failed.

Aside from social mobility, the real driver for increasing diversity is the commercial realisation that a difference of opinion and approach drives better business outcomes. Building a culture of inclusivity allows a business to celebrate difference, rather than stamping it out as an irritant. It’s really important.

“Aside from social mobility, the real driver for increasing diversity is the commercial realisation that a difference of opinion and approach drives better business outcomes”

Q: How can firms make their culture more inclusive?

 Your culture is as inclusive as the people who form it. You have to have people who promote difference. You have to work hard to drive out innate assumptions and biases and that sense that ‘one approach is better than another’. Celebrate your role models who do things differently. Celebrate your wins that are unusual, as well as mainstream.

In many ways, these things are only as good as what is being measured, so you have to combine ‘soft metrics’ (such as increased customer satisfaction) with robust measurement: tie management’s KPIs to culture – and behaviour, promotion and sponsorship. Tie them to financial rewards.

Be prepared to call out the leaders who don’t live those values and take some tough decisions. If you’re really going to live and breathe D&I, the intentions and ambitions need to go well beyond the headlines.

Q: How are you practising what you preach in-house?

We’ve understood the need to hold the mirror up to ourselves. Our president and CEO, Krishnan Rajagopalan, is from a BAME background and has been appropriately intentional.

For example, two of his biggest practices are currently led by women. I’m our first female global practice lead for financial services. He encouraged us to go out and make sure that we had the right experience to get there.

“We’ve opened up the dialogue around diversity of all kinds and the need to be inclusive and open-minded”

Our Accelerating Women’s Excellence (AWE) programme helps in developing and supporting our own and we’re now on phase two; phase one saw 20-30 of our most senior females going on a year-long intensive programme; I was one of the first recipients and it was incredibly powerful.

Internally, we have a raft of very successful employee resource groups. One is for women, one for those from BAME backgrounds; another is for LGBT people. We’ve opened up the dialogue around diversity of all kinds and the need to be inclusive and open-minded.