Is Diversity, Equity and Inclusion on your strategic priority list?
Recently, I attended the UK Government's Treasury Select Committee hearing on their review into "Sexism in the City". My friend and Men for Inclusion business partner, Mark Freed was providing evidence to the committee on where he was continuing to see challenges.
The review was triggered by a series of high profile company failures or near failures related to gender-based abuse, harassment and worse. There was discussion of how the UK financial services regulators could provide stronger guidance and potential sanctions to ensure firms are taking the right steps to prevent or at least, reduce the likelihood of these failures occurring elsewhere. There is clearly the realisation that these issues are now seen as major non-financial risks and need to be treated as such.
However, as Mark so eloquently pointed out at the hearing, do we really need to the regulators telling us how to behave? When terrible things are happening to our wives, girlfriends, mothers, daughters, nieces, why are the men in those companies not stepping forward and saying "Enough! Let's root out these behaviours and the people that think they are acceptable".
But it got me thinking. In 2008/2009, when the global financial sector came to the brink of collapse, companies, governments and regulators got together and took action. Some of it was not popular, at lot of it was not easy, but it largely succeeded. The major financial services firms spent the next 5 - 10 years spending trillions of dollars building better capital adequacy, liquidity and stress testing platforms to enhance their ability to manage their financial risk and prevent further large scale failures.
Are we beginning to approach a similar pivotal moment? Writing software, creating teams and building procedures to calculate a variety of new risk calculations was not easy, but clearly, once the measures were defined, it was only a matter of time before the maths was correct. It was hard, but everyone knew the answers were there to be found. And it still cost trillions of dollars.
Creating inclusive, gender equal workplace environments is a big challenge too. There are no mathematical formulae for it - it needs wholesale changes to culture, values and behaviours. It needs open, honest and brave leaders at all levels of an organisation to change the way they do things, they way they behave and how they prioritise activities that deliver that inclusive workplace. So that it can remove (or at least dramatically reduce) the possibility of an organisation failing due to issues related to gender, ethnicity or any other form of diversity.
To put it simply, it needs to be seen as a strategic investment priority. For all firms, not just financial services - who just happen to have some of the toughest regulators around.
However, there is a lot rowing back of initiatives in DEI at the moment - there is less money available, less time being spent, smaller DEI teams, feelings of "gender fatigue" and a backlash against "woke-ism". Given the level of risk there is when companies get culture wrong, this seems somewhat surprising. The reduced spend leads to DEI being just a set of transactions that allow companies to "tick the box".
Enough of the bad news, though, let's look at a more positive message. I have always been a big believer in the carrot rather than the stick. And the evidence continues to stack up that shows more gender-balanced and more inclusive organisations are delivering better outcomes - for all their stakeholders, not just their shareholders.
For example, work by Benja Stig Fagerland at SHEconomy is creating & curating a huge body of evidence that tell a much more positive story on the benefits of DEI and its relationship to Corporate Social Responsibility, the latest management frameworks and clear business measurements of success. Forward-thinking organisations are beginning to understand that this subject is beyond what is right or fair but actually the only sensible way to do business going forward. That DEI is the underlying strategic investment for a company that leads and manages it's employees and partners in a way that works for everyone.
To get this right, DEI programmes need to look like a strategic investment. It starts with a clear intent, a clear set of objectives and definitions on how success is measured. It needs an executive sponsor, a properly resourced team to deliver it, led by a transformational leader. It needs investment of time, money and resources. It needs governance to ensure it continues to move in the direction that makes sense - that enables it to be agile and change direction when it makes mistakes (as it inevitably will).
Its aims, goals and progress need to communicated to all of its stakeholders and the data surrounding it needs to be transparent and available to those that need it. It needs the right support, advice and organisational resiliency when they going gets tough and it hits the setbacks along the way. But most of all, it needs a shift in mindset. That DEI is not someone else's job or a side of the desk activity that we do in the evenings and at weekends, but a clear business priority; a multi-year, fully funded, transformational change programme.
So which is it to be - transaction or transformation?