What We Found: The Ideas

 

 

This action list represents the ideas that came up repeatedly in the workshops. This is a dynamic list and we expect it to change as we move the industry forward. This list will continue to evolve as firms put these ideas into practice.

“I think a homogeneous investment management industry increases the fragility of financial markets. Diverse people, opinions, and approaches within investment management are fundamental to building truly diversified portfolios.”

Wylie Tollett, CFA

Executive Vice President, Franklin Templeton; Ex-Chief Operating Investment Officer, CalPERS

CONCEPT 1: DEFINE DIVERSITY

Diversity priorities vary by geography and industry. They need to be considered and defined by each organization. These priorities can change over time, but without specificity you will  be unable to set clear goals or focus.

 

Recommended Action

Commit to a specific, useful definition of diversity that leads to common understanding and shared language.

 

Common Pitfalls

“Diversity includes everyone.”
“Everyone knows what diversity means.”

CONCEPT 2: INTERSECTIONALITY

This term recognizes that individuals are a combination of characteristics (which intersect), and categorizing them in only one dimension reduces the opportunity to leverage their perspective.

 

Recommended Action

Do not oversimplify the demographic profile of individuals.

 

Common Pitfalls

Asking a meeting participant to speak on behalf of an entire demographic: “Let’s ask Susan to know what women think on this."

CONCEPT 3: CULTURE VS. POLICY

Middle managers are key to embedding culture. If only the C-suite says it, it is a policy, but if others say it, it is the culture.

 

Recommended Action

Pay attention to who is talking about D&I – that is your window to understanding how infused it is in the culture.

 

Common Pitfalls

“If the leader says to do it, everyone will fall in line.”

CONCEPT 4: BIASES

Being aware of biases doesn’t protect you from acting on them.

 

Recommended Action

Use creative training techniques to help uncover biases, and provide tools so employees can identify them in the future.

 

Common Pitfalls

“We are all the same.”

“I do not see color.”

“The training will fix it.”

CONCEPT 5: STORYTELLING

Stories have a powerful effect on the human mind. They influence our attitudes, fears, hopes, and values, and they build connections.

 

Recommended Action

Encourage the use of personal stories to help people understand how experiences have shaped their colleagues and as qualitative evidence of D&I progress.

 

Common Pitfalls

“Most D&I learning comes in formal training classes.”

“Without hard data, it is impossible to measure D&I progress.”

 

“It’s simple: the data show that more diverse teams in portfolio management perform better. Given much of the industry serves as stewards of capital on behalf of others, the stakes are high and our incentive to improve in this area couldn’t be any clearer.”

Janet Cowell, CEO

Girls Who Invest, Inc.

CONCEPT 6: DATA

Measure things that matter, not what is convenient. Benchmarks can be an effective tool in the diversity space, especially as data are shared more broadly and tracked over time.

 

Recommended Action

Do a pay gap analysis and use tools such as the Global Diversity and Inclusion Benchmarks and employee engagement surveys to identify other gaps and strategic action items.

 

Common Pitfalls

“Diversity and inclusion are impossible to measure.”

CONCEPT 7: COMMUNICATION

One of the biggest D&I challenges is making sure employees know what is being done. Such knowledge can improve employee morale and engagement and create informed organizational ambassadors.

 

Recommended Action

Have regular communications from senior leaders about diversity efforts, and provide talking points for managers, while emphasizing the importance of authentic conversations.

 

Common Pitfalls

“Everyone knows we are doing this."

CONCEPT 8: CANDIDATE SLATES

Interview lists are an important area for analysis, and having a process that checks for diversity at this stage can be useful.

 

Recommended Action

Select search firms that have a track record of providing diverse candidate slates.

 

Common Pitfalls

Diverse candidates are eliminated because they “don’t fit into our culture.”

CONCEPT 9: KNOW YOUR CANDIDATE

In an attempt to create equal footing, some firms institute “blind” hiring practices in which résumé data associated with certain demographic information are excluded, but the effectiveness of this approach can be limited.

 

Recommended Action

Seek to learn broadly about the background and perspective of candidates to consider how differences can be leveraged to improve your firm’s effectiveness.

 

Common Pitfalls

“We can’t be biased because we use blind hiring practices.”

CONCEPT 10: INTERVIEWERS

The interview process is an opportunity to show a firm’s diversity to a prospective employee and to get diverse viewpoints on the candidate’s ability to succeed at the firm.

 

Recommended Action

Use diverse interview panels when possible, and structure the feedback process so that all voices are heard.

 

Common Pitfalls

The loudest voices dictate who gets offers.

“The hardest part of my job is building a diverse workforce.”

Chief Investment Officer of a public pension plan

CONCEPT 11: RETURNSHIP

Some firms offer programs that recruit those who have taken a career break.

 

Recommended Action

Create a returnship program and encourage recruiters and interviewers to consider nontraditional career paths.

 

Common Pitfalls

“Investment jobs have changed so much over the years that a career break makes you quickly irrelevant.”

CONCEPT 12: MENTORS AND SPONSORS

Mentors help prepare people for career success, and sponsors advocate on their behalf. Mentors typically give wide-ranging advice, whereas sponsors are focused on advancing the career of their protégé.

 

Recommended Action

Encourage mentoring and urge influential leaders to become sponsors.

 

Common Pitfalls

“A mentor will advance your career for you.”

CONCEPT 13: “CULTURAL TAXATION”

This is a phenomenon in which people from historically underrepresented populations are doing extra work to advance firm diversity (i.e., they are overtaxed), and there is a negative correlation between doing this work and getting promoted. In other words, doing “diversity work” is penalized because it takes them away from other work.

 

Recommended Action

Develop processes to ensure that employees are adequately compensated and recognized for their D&I work.

 

Common Pitfalls

“High-visibility assignments will lead to promotions.”

CONCEPT 14: INTERNAL NETWORKS

Firms and individuals benefit from building relationships across an organization, and exposure to people unlike yourself creates a familiarity that fosters inclusion.

 

Recommended Action

Create cross-functional programs that facilitate exposure to people across the organization.

 

Common Pitfalls

“Diversity programs are the only way to build an inclusive culture.”

CONCEPT 15: RETENTION

Keeping diverse employees is a challenge for many firms, yet many do not know how to make improvements.

 

Recommended Action

Conduct “stay interviews” with employees to understand why they choose to stay and what might make them leave.

 

Common Pitfalls

“Our high turnover among diverse employees is because of competitors, not internal practices.”

“Diversity and inclusion are not only correlated to performance but also are a powerful differentiator for top talent recruitment – an essential ingredient for the investment industry’s long-term success.”

Maarika Paul, FCA

Chief Financial and Operations Officer Caisse de dépôt et placement du Québec

CONCEPT 16: “ALWAYS ON” RECRUITING

Continue to build a network of diverse candidates even when there aren’t openings.

 

Recommended Action

Adapt your recruiting mindset to an “always on” approach, recognizing that opportunities may arise outside of typical recruiting schedules.

 

Common Pitfalls

“We are all competing for the same few women and minority candidates.”

CONCEPT 17: COMPENSATION

Some firms are beginning to have D&I key performance indicators, or KPIs, as part of executive compensation.

 

Recommended Action

Tie leadership-level compensation to progress on culture and diversity metrics.

 

Common Pitfalls

There is a temptation to optimize short-term metrics at the expense of long-term employee success and culture (a “check-the-box” approach).

CONCEPT 18: OUTREACH

Actively engage in building the pipeline of investment professionals.

 

Recommended Action

Align corporate citizenship with efforts that generate awareness of and interest in investing.

 

Common Pitfalls

“There are few organizations we can partner with that reflect our corporate values.”

CONCEPT 19: OPEN DIALOGUE

An inclusive culture is one in which societal issues and their impact in the workplace are acknowledged.

 

Recommended Action

Encourage candid conversations about diversity topics and informal discussions about current events.

 

Common Pitfalls

“Controversial topics don’t belong at work.”

CONCEPT 20: BUSINESS DIVERSITY

Achieve top performance by being inclusive. The goal is to focus on improving performance by tapping firms with the best talent and to proactively consider women- and minority-owned firms.

 

Recommended Action

When selecting asset managers, ask consultants to propose a diverse slate of firms.

 

Common Pitfalls

“We cannot control a firm’s or partner’s diversity.”

Throughout the workshop series, we gathered additional context to help those in the investment management industry understand the types of conversations peers are having.