For leaders in Finance the crisis of 2020 makes everyone think back to the 2008 Financial Crisis. That was bad but this is worse. Fortunately, the lessons learned in 2008 are still fresh in most leader’s minds. The banks and insurers are much better capitalized now than they were a decade ago. Regulatory oversight is stronger. The products are simpler. It is however a time of significant uncertainty. Working from home has tested disaster recovery plans and the strength of technology platforms. Generally, these are working as well as could be expected. However the loss of contact with fellow employees, customers and managers makes this a challenging time for all. Combine this with the human needs that everyone has to protect their families in a pandemic and the stress levels are immense.
At times like this there will be a natural human tendency to fall back on prior experience and the beliefs you hold regarding known truths. It is also natural to rely on those closest to you whom you have learned to trust. Both familiarity bias and affinity bias will influence who we turn to in these times if left unchecked. This is true for all of us, including leaders in finance. But is this the correct course of action? Is now the time to put aside the inclusion of diverse perspectives? Should we wait until the crisis is averted and we return to normal to focus on being inclusive of all talent? Of course not! Now more than ever is the time to engage colleagues of diverse background and experience. It is the time to pause and consider outlier solutions. It is also the time for leaders to put aside what they perceive as a ‘safe’ decision making approach, which is over-reliant on gut feelings, biases and heuristics. Instead they should embrace decision making that safeguards against these natural human tendencies, allows for higher levels of creativity, innovation and risk assessment and is more inclusive.
In my 35 years in financial services I have found that going beyond what my experience taught me and seeking out other’s perspectives increased the quality of decisions being made. By consulting a group of others who had differing types of backgrounds and experiences I often found new ways to approach a problem. My openness to the viewpoints of others meant that I delivered better business outcomes. The COVID-19 response has caused a crisis like no other we have experienced in modern history. Leaders in finance are expected to chart a course first to safety, then to coping and finally to return to a new normal operating environment. Given we have not faced this problem before, old approaches should not be assumed as the optimal way to deal with these issues. More ideas from more people and new ways of dealing with adversity will require inclusion of a more diverse group of people that ever considered before. It requires thinking outside the box and a search for new incoming generating activities.
In November 2020 The Inclusion Initiative (TII) will launch at LSE. TII aims to bring behavioural science insights to firms to allow them to enhance the inclusion of all talent. But the work of The Inclusion Initiative at LSE has already begun by assisting leaders in finance in better decision making. From the recent TII report (Lordan and Robinson, 2020, I have chosen three( of ten in the paper) important concepts that speak directly to how leaders should deal with this crisis. I then approached senior leaders in London, New York and Toronto to asked how they viewed inclusion at this time of crisis. The leaders chosen are at the help of large companies with hundreds to thousands of employees with both local and international operations. Below are some of their responses.
1. ”Ensure there is Inclusivity in opportunities by auditing…who gets these opportunities makes salient who in the organisation is missing out… Differences in personality across employees can lend them to be more or less likely to ask for resources that can help them advance in the workplace.”
A CEO of a major pension plan has these comments:
“One of the challenges for many organizations is that there is insufficient formal planning on inclusion so that during a crisis it is forced off the edge of the desk. In a crisis you naturally go back to the firm’s basic activities and make certain you are getting those right.
The COVID-19 crisis has exacerbated the problem for those not in the mainstream and leaders need to understand those individual’s unique challenges. We are thinking about what can we do that is positive and use technology to be more inclusive. In the current crisis in particular, video conferencing technology used to its fullest extent has allowed us to reach out to all of our staff around the world. This is an improvement from the original format of a “townhall” where you had to assemble everyone in one room. We are also using that technology for non-work related virtual gatherings, from baby showers to afternoon tea as a way to help people feel connected. This also allows us to communicate the stories of our employees who have risen to the challenge of this crisis. This process is uplifting to all and inclusive in the broadest sense as it brings everyone together.
In the future we want to think about inclusion and the future of work. How will inclusion be fostered in new approach to our physical facilities? What is the future of work from home? Is physical distancing here to stay and if so how will this change the workplace? “
2. “Take steps to avoid groupthink in team meetings so new perspectives get discussed”
“Homophily” is the tendency for people to interact more with others that are similar to them. While this is a natural human trait it is not one that leads to the best decision making and can be counterproductive in times of crisis.
An experienced leader in prime brokerage within a bank puts it this way:
“ Dealing with the Covid-19 virus, along with other Strategic threats or Key Business decision making issues, is a complex, non-linear problem with wide ranging outcomes to a variety of an organizations’ stakeholders. No one person, or subset of society, can fully comprehend the implications of these sorts of strategic threats to those wide ranging stakeholders.
Put simply, to believe a narrow group has all the answers is hubris and leads to potentially disastrous consequences. Embracing Diversity is the antidote to Groupthink.
It is critical to gather intelligent and pragmatic perspectives from all walks of life to reflect the organization’s stakeholders. “
3. Recognise the role of the environment. In times of uncertainty communication becomes key. Understanding how these communications should be framed, and who the messenger should be at any one occasion are key behavioural science skills that can maximise any communications probability of cushioning fears.
The CEO of a large metropolitan not for profit community support organization had these thoughts:
“Inclusion is a big driver for our response. Our desire is to make people feel connected. Connection with others help them to ease their tension at this time of crisis.
People need a sense of belonging, purpose and community. This is our mission and it is even more important now. Getting the entire family involved will create a household community. This is vital at a time when contact is not possible with others outside the household. Even though we are using the internet most still feel included using online tools as they feel there is something/someone out there that cares about them.
For people not from mainstream going online creates a challenge and an opportunity. Free and accessible digital access is vital now but is not available to everyone. How should we bridge this gap? One way is direct contact by telephone. There is often a greater sense of isolation for those over 65. Our staff is directly reaching out to our 20,000 clients over 65. Most have digital access but their skills are not sufficient for all of the tools that are being used in the crisis. This direct telephone contact gives our staff(who are working from home) a sense of purpose, and gives both staff and client a sense of belonging and community.
When the crisis abates this challenge of access to internet for every member of society will be an important public policy issue. “
The message from these industry leaders is clear. The time to embrace more inclusion in your decision making is NOW. The way forward for our organisations will need to include all points of view and experiences in order to develop a plan for the new environment we all will operate within as we get back to work. A new TII report titled “Virtual Inclusion in the City” by Lordan (2020) provides leaders with insights on how to increase virtual inclusion.
References
Lordan Grace and Robinson K (2020). “Inclusion in the City – Setting the Agenda for the First Years of the Inclusion Initiative at LSE”. A TII Report. Read here.
Lordan Grace (2020). “ Virtual Inclusion in the City”. A TII Report. Read here.
About the author
Richard Nesbitt is the incoming Chair of The Inclusion Initiative at the LSE. He is also an Adjunct Professor of the Rotman School of Management, University of Toronto. In June 2017, Richard published a book (with Barbara Annis) titled “Results at the Top” on the issue of men’s responsibility for gender diversity to improve their organizations (Wiley 2017). Richard recently retired as CEO of Global Risk Institute. Previously he was Chief Operating Officer of Canadian Imperial Bank of Commerce until he retired from that position in September 2014. He joined CIBC in 2008 following his more than 20 years of experience in the securities industry which included CIBC Wood Gundy from 1987 to 1997. From 2004 to 2008 Richard was Chief Executive Officer of the Toronto Stock Exchange group. Richard is a graduate of the London School of Economics.
Posted May 7th, 2020