What DEI data tells us about Enterprise Alignment

You may think that the title is stretching a survey too far. If so, I would suggest reading the Financial Conduct Authority ’s (FCA) ‘Understanding approaches to D&I in financial services’ (2022) with attention to what many firms do, some don’t, others hope to and the rest pledge.

Plotting the findings tells us the following-

• [Purpose]

Many firms failed to clearly articulate the purpose of their diversity and inclusion provisions.

And since the ‘what’ is not adequately explored, the diagnosis fails to acknowledge specific circumstances and challenges.

-> the ‘how’ contributes actions that are likely to be target-agnostic.

• [Strategy]

The FCA notes generic strategies lacking a holistic view of diagnosis-action-measurement across a number of firms. Some strategies are steered by a compliance objective -instead of genuine commitment- towards diversity and inclusion.

An area of particular concern is that strategies failed to demonstrate full utilisation of their #DataInsights. Are remedies offered to the most important issues?

• [Resource architecture]

Data collection is unambiguously essential and quality of data critical: Better diversity data enables better understanding and results in a tailored treatment approach.

The regulator observes:

- collected data is not fully utilised -> part-employed data results in ineffective remedies

- remedies are not tracked for effectiveness

- organisations rely -often heavily- on voluntary online training courses for managers and information hubs; remedies usually limited in scope and likely effectiveness

- most have established #ERGs (Employee Resource Groups) to offer allyship.

Alas, ERGs are not yet used as source of culture feedback. They are not empowered to challenge the corporate mindset or utilised strategically to represent the interests of their members to executive management.

• [Organisational capability]

Poor quality of data compromises the organisation’s ability to synthesise patterns, see the bigger picture and investigate the ways in which challenges of individuals belonging to more than one minority groups may compound (#intersectionality).

Quality of data is largely down to employees’ declaration rates, remarks the regulator.

High declaration rates do not reflect luck. They demonstrate hard work: commitment to earn and maintain #StaffEngagement through targeted initiatives and the cultivation of mutual touch-points.

Building trust and engaging (y)our workforce is the most #sustainable route to disclosure. Allocating an executive sponsor to the ERGs (mentioned in the previous section) is a starting point. An executive sponsor - active ally, who enables psychological safety and empowers the ERG members to incubate change.

The #FCA also advises not to underestimate the potency of practical support, such as showing to employees how to update their diversity data at team meetings.

• [Management systems]

Is DEI directly linked to business performance? The FCA shares that many organisations appeared vague about their business rationale for better diversity and inclusion.

Lack of genuine commitment -or, even, inability of assertively communicating preparedness to improve diversity and inclusion across the workplace- is likely to lead to fatigued and disengaged employees, argues the Financial Services Authority.

Is it possible to control fatigue and disengagement within the DEI framework with otherwise invigorated and engaged employees across the organisation? Unlikely.

Most firms that engaged with the regulator address:

- #GenderRepresentation, albeit in binary mode (female / male)

- #Ethnicity starting to receive more attention, although few organisations go beyond the minimal split of White - Ethnic Minority.

Other characteristics receive much less attention. In particular:

- #SocialMobility

When captured, it is based on entry points; less so on the cultural experience of those employees from less privileged socio-economic backgrounds.

- #SexualOrientation

Limited to supporting employee network groups, if at all available. Similar to social mobility, it is essential to capture experience of LGBTQ+ employees related to self-expression, resource accessibility and protective mechanisms [see McKinsey (2022) ‘Active allyship: Do your LGBTQ+ employees feel supported and included?’ report].

- #Disability

The FCA reports that few financial services organisations have given serious consideration to disabiilty.

- #Neurodiversity

With very few employers paying attention to neurodiversity and the sector’s need for a steady talent flow, creating neuro-inclusive channels is more relevant than ever.

In addition, look for #behavioural #biases and #systemic #discrimination across the workplace and sector as a whole. Is it a matter of time and processes (or lack thereof) until management systems purposefully take the above parameters into account? And walk the talk.

, where #connectedness across

#Purpose - #Strategy - #OrganisationalCapability - #ResourceArchitecture - #ManagementSystems makes up #BusinessAlignment

In my view,

#DEI practices embedded in the workplace, rather than a gap-filling, one-directional #compliance process, are a fundamental culture component and a fierce #alignment pundit. They can enhance (y)our competitive edge, add additional stimuli for #innovation, open new avenues to utilise our workforce’s skillsets and attitudes, and augment the #relatability to our customers.

DEI values are business success seeds.