Behavioral Insights Can Drive Diversity, Equity and Inclusion for Financial Orgs
Increasingly we’re hearing the phrase “authentic diversity, equity and inclusion” bandied about. By what does it mean in practice?
Let’s start with the two facets most people know best: Diversity means that we recognize and respect variety – everyone’s unique qualities, behaviors and attributes. Inclusion means that all individuals are not just included, but feel respected, accepted and valued. Like they have a place there.
“Equity” is a more recent addition to the “D&I” equation, and it is a vital one. At its core equity is being fair and impartial. It is the piece of the puzzle that asks us to realize the playing field is not always level and challenges us to ensure everyone has an equal shot, no matter their starting point, experience, perspective or resources.
Authentic is definitely an overused term, but here we take it at its literal meaning, by understanding, fostering, managing and celebrating DEI, rather than just paying it lip service or meeting some minimum standards.
The time is now
There has never been a time when discovering the collective truth about your firm’s culture is so critical. DEI is not a subject to be ignored. It isn’t the latest “trend.” Failing to understand its true meaning and whether or not your company, your advisors and your clients stand up to DEI scrutiny could be the difference between a business that succeeds and one that doesn’t.
There are tough conversations to be had. They should begin internally; only then can decisions be made to genuinely change culture so that it genuinely reflects a real understanding of the meaning of Diversity, Equity and Inclusion…authentically.
Get started by looking inward
So where to start? A good place is understanding inherent bias. We all have them. Knowing and revealing what they are is a first step to managing them. One way to successfully discover and manage these biases is through the application of a scientifically based behavioral discovery system. Once bias is revealed, healthy conversations can begin.
Everyone has unconscious bias. Just take a moment to consider your various social groups. They may take different forms, and that’s okay – unless they exclude. Bias exists because of people’s tendency to categorize and segment their world.
Parse bias based on those definitions we looked at. Diversity is a balance of individuals from varied demographics, backgrounds and cultures. Inclusivity is reflective of how that diversity is embraced throughout the organization. Are we really including everyone and making them welcome – and heard and seen? A truly inclusive culture must be established from the top, filtered down, and embraced by everyone within the business. No exceptions. Equity means everyone has a fair shot.
Bias, behavior and readiness
DEI is – or should be – part of the very fabric of the business. Ensure everyone understands its meaning. Ensure everyone genuinely embraces both the concept and the reality. It may help to make sure everyone knows parts of the journey may be inherently uncomfortable.
If you want your market share to grow, then paying genuine attention to DEI using behavioral tools to inform the process is vital. Remember, DEI is all about action (behavior). If you have no genuine understanding of your own behavioral biases, you can’t manage them or advise or work with others.
Don’t assume that simply adding a DEI sentence to a vision or strategy statement will work. That’s overconfidence bias and assumes success will easily follow – not so. In fact, that is the trickiest bias to overcome: Not doing anything and hoping the subject goes away. “We’re already doing okay here – this is for other organizations, not ours.”
Focusing on the impact of making deep cultural changes is what is needed. Yet loss aversion from senior executives in terms of the “price” they may have to pay to genuinely deliver a strong DEI culture could well outweigh the positive impact of making these cultural changes.
Add to this the fact that the financial industry has a tendency adapt and change at a slower pace. By nature, we are conservative in that regard. Still, true DEI success depends on getting this stuff right – and without delay.
Take the first step
Step One toward your winning DEI strategy is, thankfully, an action that will benefit your organization in many other ways. (Don’t silo these efforts or tools.) Add behavior tech to your existing tech stack. Without replacing current systems, you’ll be adding the capacity to reveal inherent behaviors and biases – of team members, potential hires and even clients. This behavioral insight will inform how you talk – again, from the top down – about how to smartly navigate DEI to change the culture.
Then and only then can you look outward to your clients to talk about your approach to DEI and why this matters to you, your organization, the work you do for them and, critically, the outcomes you create for and with them.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.