Today we would not think and speak so dismissively about mental illness, but this quote – whoever it is attributed to – does touch on a fundamental truth that it is not smart to expect a different result from repeating the same flawed process. This is a truth we see continually playing out to different degrees in business, politics and in society today.
Yet, it is not a collective insanity that is at play here. Rather, it is the effect of biases – both conscious and unconscious. The belief that the same input will deliver a different output is clearly illogical but is in truth something we are all guilty of to some degree.
One real-world example of this is in the investment profession where many firms continue to hire, retain, and incentivise talent based on an immutable set of behaviours and characteristics.
This bias in the hiring process leads to a bias in behaviour; a legion of workers who think, look, and act the same is likely to also share similar ideas, perspectives and conclusions.
In the investment profession, in particular, this can be dangerous. A blind spot in thinking, or a decision based on conventional wisdom without appropriate challenge, can lead to missed opportunities or unintended risks. So, while diversity of thinking is good for businesses of all kinds, for investment management it is critical.
Three steps to unlock diversity
For firms looking to challenge this status quo and embed more diversity into their teams, there are three areas that require focus.
The first step is to really understand what you are trying to achieve and why. Here, the why is the simple bit: put simply, you are not serving the best interests of your company or your clients if you do not have the best possible mix of diverse thinking and perspectives in your team.
This is backed up by extensive research; all available data shows that a diverse and mixed workforce performs better than all-male or all-female teams.
But, understanding the what can be more challenging. Diversity can come in many forms, whether it is based on different perspectives, mindsets, gender, backgrounds, knowledge or working styles. Understanding the right mix for your team to maximise performance will be a key first step for organisations seeking to unlock the true value of diversity.
The second step is to assess your current processes. If you have a rigid approach to hiring, you will only recruit from a very small pool of people and you will get the same type of people over and over again. Ensuring that bias is not embedded into your process means recognising the value and potential of experience and perspectives that fall outside of your usual cohort of recruits.
Whether it is different educational backgrounds or hiring from non-traditional roles, or even outside of the investment industry, there is a wealth of potential to be discovered and unlocked. Firms must ensure their processes do not get in the way.
The third step is retention. Once you have found this diverse talent, you need to make sure you hold onto it. This will require a change in thinking about working styles and patterns to optimise for inclusion. One clear area of focus is work-life balance.
The pandemic demonstrated that the industry is able to effectively operate with flexible working patterns in place, particularly for women who were disproportionately impacted by additional care responsibilities.
Employers should double-down on this opportunity to make flexible working the norm at all levels, encouraging senior stakeholders to lead by example and to normalise the conversation between employees and HR.
From theory to practice
The increased focus that firms have placed on tackling biases and building diverse teams in recent years is to be welcomed, but clearly, more work needs to be done. The words of suffragette Emily Davison hold as true today as they did over a century ago: “deeds, not words.”
Fortunately, firms are not treading this path alone. Organisations like CFA Society UK have an important role to play in helping to shine a light on common areas of challenge and best practice, as well as providing guidance on the best route to take.
Initiatives such as the Young Women in Investment programme are helping to build and nurture the next generation of talent to ensure a diverse pipeline of potential hires, working with firms that want to change the status quo.
For success to be reached, firms must also do their bit to identify, attract and retain talent that may look, sound and think differently from what they are used to. If they get it right, there are significant benefits up for grabs. It does not take an Einstein to work that out.
Sarah Maynard is global senior head, diversity, equity, and inclusion at the CFA Institute
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