By Monica C. MeinertEvery day, two million individuals head off to their jobs working for the nation’s banks. That’s two million different perspectives, backgrounds, skill sets and approaches to solving problems.
Celebrating these differences and cultivating a culture where each voice is heard and valued can make the difference between a good company and a great company—between a place where clocks are simply punched and a place where employees love to work.
There have been numerous studies on how a diverse workforce can boost a company’s bottom line. The oft-cited 2015 McKinsey study Why Diversity Matters and follow-up report Delivering Through Diversity published in 2018 show a clear and consistent pattern: firms in the top quartile for gender and ethnic diversity in their leadership ranks are likely to be more profitable than those that are not.
Accordingly, many banks are already making strides toward developing cultures that are more diverse, equitable and inclusive than ever before.
But this shift doesn’t happen overnight: it’s not a “check the box” exercise and there are no fast-track solutions. Rather, it requires intentionality and awareness on the part of bank leaders to drive this transformational shift within the organization.
Driving cultural change
As leader of the bank’s Diversity and Inclusion Center for Expertise, Green decided early on to create a purposeful link between the bank’s diversity and inclusion efforts and its existing strategic priorities. By taking this approach, “it helped me to speak a language people were already familiar with.”
She found that the bank’s stated goals of “building the best team” and “elevating our performance as a team” intersected particularly well with the themes of diversity and inclusion. Using these ideas as a foundation, Green and her team have been working to increase understanding and awareness about diversity and inclusion through e-learning and facilitated learning opportunities and—perhaps most critically—through dialogue.
“In my experience, one of the best forms of training is through conversations and bringing people together that would not normally have the chance to come together,” she explains. It was that idea that led her to start the “Conversations with Clara” program—a series of facilitated conversations between Green and members of the bank’s team or members of the local communities the bank serves.
The series kicked off with a conversation between several of the bank’s female leaders, which Green says helped explore the challenges that women leaders face, while also highlighting areas of commonality with other team members. Other conversations have featured Birmingham’s first black mayor, as well as the bank’s CEO, John Turner, whom Green acknowledges as a strong partner in the effort to grow Regions’ diversity. At the time Green joined the bank, Turner—then the bank’s president—was making his transition into the role of CEO. “He and I were able to lock arms from the very beginning to say this is a priority,” Green says.
Leading with the ‘I’
No cultural change can really take root without strong leadership at the highest levels. That’s why “it’s important to lead with the ‘I,’ or ‘inclusion,’” adds Monica Sylvain, chief diversity officer at IberiaBank. Sylvain defines inclusive leadership as “having a sense of fairness, and [having]your employees feeling like they have a sense of belonging.”
For her, that all starts with community building.
At IberiaBank, she quickly formed a diversity and inclusion council comprising a broad cross-section of employees at all levels of the organization, she says. “That group is really helping us to think through the things that are top of mind for our associates when they think about inclusion, when they think about equity, when they think about diversity.”
Sylvain is also working to educate the bank’s leadership team—and its employees—on recognizing and understanding unconscious bias. “All of us as human beings have unconscious or implicit bias. [We] make snap judgement decisions,” she explains. “If you look at the neuroscience, we do it in nanoseconds.”
In the workplace, unconscious biases can determine which employees receive promotions, the types of work they are assigned and the extent to which their feedback is actively solicited by management. And there’s a significant link between the perception of bias and employee satisfaction and retention. According to the Center for Talent Innovation, employees who perceive bias at work are nearly three times as likely to be disengaged during the workday and three times as likely to leave their jobs in the current year.
For banks that may be just starting out on their diversity and inclusion journey, understanding unconscious bias “is an excellent place to start if you’re trying to change culture,” notes Carla Harris, vice chairman of wealth management at Morgan Stanley, who spoke at the American Bankers Association’s Annual Convention last year. “Ask yourself where it’s coming from. Are you looking at the facts and coming up with a judgement, or are you adding something in there that is now driving your conclusion? You have to be trained to think that way.”
At IberiaBank, Sylvain says her executive team recently took part in a half-day retreat on inclusive leadership where they had the opportunity to examine their own unconscious biases. “The idea is that you have to have the commitment, you have to have the courage, you have to be cognizant of your bias.”
Creating an inclusive culture is one piece of the DE&I puzzle. Hiring is another.
“If you’re a smart banker, the first thing you’re going to do is hire people who are of the same culture, color and whatever else you feel coincides with the customer base in your particular [market],” notes Ignacio Urrabazo, president and CEO of Commerce Bank, headquartered in Laredo, Texas, a subsidiary of IBC.
Having a talent base that reflects the demographic composition of the local community isn’t just good for the bank’s bottom line—it can have a significant impact on customers’ financial lives, too, Urrabazo says. For banks located in communities with Hispanic populations, for example, having tellers that speak Spanish can help ensure that when customers walk in, they feel comfortable and welcome. That in turn increases the likelihood that they’ll receive the products and services they need, and stay within the mainstream financial services industry in the long run.
At Southwest Capital Bank, a $385 million institutions headquartered in Albuquerque, N.M., understanding the need for diverse talent has also informed the institution’s approach to succession planning, says Chief Operating Officer Lonnie Talbert.
“We’re really focused on a couple different areas: how can we get more younger people in the game, but also diversity as it relates to ethnicity and diversity of thought,” Talbert says. As a result of these efforts, he adds, the bank’s five-member executive team now includes three Hispanic females, two of which are under the age of 40.
Southwest Capital also hasn’t hesitated to look outside of the financial services industry for new talent—searching for individuals with the right leadership skills that can then be taught the business of banking. Hiring from outside the industry has helped the bank gain fresh perspectives and approaches to problem solving that have given the bank a strategic advantage, Talbert notes. But this approach to talent acquisition doesn’t come without its pain points.
“Many times, if you hire someone who has no experience in the field, you’ll have pain for three to five years of growth as they come up the chain, as they start to learn the industry,” he acknowledges. “But I’m telling you—if you invest in that now, after year five, you will blow by the competition.”
As banks look for talent sources, one option they have is to partner with historically black colleges and universities or other majority-minority institutions. Morgan Stanley’s Carla Harris recommends looking to smaller liberal arts institutions in addition to large universities and emphasizes that “there is an investment that needs to be made in those institutions to build trust.”
And once employees are in the door, that’s where the concept of equity becomes essential, she adds. “You need to make sure that you are being very fair with respect to the types of assignments you give people early on. Because within six months, I have learned—especially at the entry level—if you don’t make sure people are exposed to certain types of assignments, by the time they get to month seven or month eight, they’re at a deficit.”
When most people think of “diversity,” there’s a tendency to focus narrowly on race and gender. But Green challenges her leaders to think more broadly. “We’re talking more about differently abled and how we can get those with disabilities into our organization, [as well as]our veterans.”
JPMorgan Chase, one of the nation’s largest banks, takes a broad approach to its diversity commitment, with 10 dedicated resource groups devoted to providing support and engaging employees from different communities across the organization—including women, members of various ethnic communities, LGBTQ individuals and allies, military veterans and individuals with disabilities.
Through its Office of Disability and Inclusion, for example, the bank focuses specifically on hiring individuals with disabilities and ensuring they receive the reasonable accommodations necessary to succeed. One program—Autism at Work—focuses specifically on individuals with autism spectrum disorders, a group that has an estimated unemployment rate of between 80 to 90 percent.
“Through partnerships with organizations that have more experience in working with individuals with ASD, we are learning to look beyond the traditional interview process to find highly qualified employees,” James Mahoney, the program’s executive director says in a post on JPMorgan’s website. “We work closely with senior leaders across the firm to identify roles that would benefit from the talents of ASD adults and ensure we provide an inclusive work environment for these employees to thrive.”
And these individuals are performing exceptionally well, particularly in areas like quality assurance. “The embrace of this untapped workforce allows our company to benefit from the unique blend of talents provided by these detail-oriented, rule-bound, logical and independent-thinking individuals,” Mahoney notes.
Continuing the conversation
Building a diverse, inclusive culture “is a marathon, it’s not a sprint,” says Monica Sylvain. But as an industry, she adds, “we can get there.”
No matter where banks are on their journey, there is always more work that can be done and new ground that can be broken. For banks just starting out, Carla Harris recommends developing a few achievable goals that can be executed over the next few quarters. “Think about who you are today, and who you want to be in five years,” she says. “If you think about how fast the environment and the competitive landscape is going to change, what do you need to do today to make sure you are best in class, the employer of choice, getting the best talent in your market?”
Adds Clara Green: “Diversity and inclusion cannot trail strategy. It has to be intertwined [with]what people are working toward on a daily basis.”