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The Power of Diversity in Finance

  • By Madeline Cannon
  • Published: 5/12/2020

diversity

With the advent of globalization and technological advancements, the workforce has expanded beyond a nation’s borders, leveraging the global network of diverse candidates from countries around the world. As such, diversity and inclusion have become key buzzwords over the years as organizations dedicate resources to establishing and maintaining a diverse and inclusive organization.

As organizations work to implement this ethos, the social discussion surrounding diversity measures has been muddled with misconceptions on what diversity is, its importance to modern organizations, and how to foster diverse and inclusive spaces. In the FinNext 2020 Virtual Series webinar, The Power of a Diverse FP&A Team, panelists discussed these misconceptions, shared their own career experiences, and provided actionable insights towards establishing a culture and policies that support a diverse workplace.

TRUE DIVERSITY

According to a survey by AchieveNEXT, 58% of middle-market companies said that they were effectively leveraging diversity and inclusion for enterprise growth and success, and 81% consider diversity and inclusion either somewhat critical or very critical. Yet, when looking at reality, the beginning of one’s career may seem diverse but as you progress towards the C-suite, that dynamic shifts. This gap highlights the difference between claiming to value diversity and supporting the diversification of your employees at all levels of the organization.

There is an old notion that diversity is simply about the recognition of difference, but Geetanjali Tandon, senior director of financial planning and analysis at Centralsquare, pushed back on this rhetoric, noting that simply celebrating women or a particular culture for a day doesn’t make an organization truly diverse.  

Instead, Tandon offered an alternative view. “Becoming diverse is actually making sure that you have the right people, the diversity in your talent pool, in your promotion pool,” she said. “When you are looking at projects, when you're looking at the things that are bringing people forward and giving them exposure, who are the people that we are giving those projects? It’s having a conscious thought process of how we are doing that and why we are doing that.”

Tandon’s point reflects a key component to diversity, that there is a difference between representation and equity. Diversity inherently means that there are differences among individuals and these alternative perspectives are what help combat groupthink within organizations. If this benefit of diversity is to be utilized, then there must be a cultural shift within the organization to not only acknowledge the fact that there are differences, but to accept, encourage and promote constructive dissent.

The Importance of Dissent

Dissent is often thought of in a negative light, as something we should work to root out or overcome. In reality, dissent simply means the expression of opinion in variance with what is previously held. The negative connotation is our social bias working against us; humans are social creatures that desire an ordered community to a certain degree, and so we naturally view dissent as a threat to that order instead of perceiving it as an opportunity to develop and grow the community.

Michael High, director of finance for U.S. Gulf of Mexico Deep Water/Royal Dutch Shell, touched on the discomfort of adopting this perspective. “I think one of the most important skills you can have as a leader is actually a growth mindset and recognizing that you don't know everything,” he said. “You can't have a fixed mindset around your understanding of diversity and inclusion; you have to recognize that actually you know a lot less than you think you do.”

Conformity cannot come above all else in today’s world. Meredith Jones, principal cloud economist at Amazon Web Services, detailed her company’s approach. “One of the things that we have at Amazon is the leadership principle that guides our behavior; it's called ‘Have Backbone, Disagree and Commit.’ Essentially, that principle illustrates how we value diversity of thought. We expect any Amazonian at any level to speak their mind, to challenge conventional wisdom. In doing so, that diversity of thought has really been foundational to innovation,” she said.

The current COVID-19 pandemic presents a stark reminder as to why organizations need constructive dissent, noted Robyn Pollack, Managing Director at AchieveNEXT: “Diversity is going to be critical to the rebound of enterprises. Diversity of thought is what drives innovation and better problem solving and better decision-making. Having those diverse opinions and thoughts and experiences in the room is what's going to drive those better decisions.”  

FOSTERING DISSENT AND INCLUSION

So how does an organization foster constructive dissent and inclusion? Mentorship was a common solution amongst the panelists. Jones stressed that organization need to make sure that they are  cultivating people throughout their careers. “That means making sure that you're assigning mentors that have enough leadership or influence within your organization to actively sponsor that person and help shepherd their career, making sure they have resources, and making sure they have a seat at the table,” she explained. “It's not just a matter of cultivating this culture where they can speak up; they have to actually be there in order to speak up.”

While the panelists acknowledged the power dynamic at play for lower-level employees, they still encouraged practitioners to be the change they want to see in their organization. “One of the things that I've learned in my career is, if you don't ask, you usually don't get. You have to ask and put yourself out there,” said Tandon, “It is a risk, as someone who's rising up in their organization. But unless you ask, you are not putting yourself forward to tell your manager and to tell your leader, ‘This is what I'm looking for.’"

THINKING ABOUT THE FUTURE

At one point in the webinar, Jones shared an experience where she went through 10 rounds of interviews for a senior position where none of the interviewers were women or people of color and they were all around a similar age. “This really gave me pause when I was considering joining, and I think to any candidate that has been through something like this, the thoughts are, ‘Will I be valued at this company? Will I be marginalized? Are people like me going to be part of the decision-making process? Do we have a seat at the table? Do we influence hiring in any way?’” she said.

Jones’s anecdote highlights the power-dynamic shift that is on the horizon for many organizations. Looking ahead to the future, the demographic breakdown of the U.S. is going to shift dramatically. According to the Pew Research Center, Generation Z (1997-2012) is the “most racially and ethnically diverse generation” in U.S. history. The World Economic Forum’s Davos Manifesto also highlighted this shift in generational attitudes: “Millennials and Generation Z no longer want to work for, invest in, or buy from companies that lack values beyond maximizing shareholder value.” Ultimately, organizations that fail to recognize the changing landscape will lose out on their ability to attract, hire, and retain qualified employees.

The Power of a Diverse FP&A Team was part of Personal & Team Effectiveness Learning Week in the FinNext Virtual Series. Listen to all of FinNext’s great FP&A content here.

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