Diversity: Where transforming your organisation starts

Wherever you look in business – and the world of private equity is no exception – there is an increased focus on diversity, equality, and inclusion. This can be a sensitive topic for many of us and raises a host of questions, from how does our company look to those looking in, how do we attract and retain talent, to how do we actually put language around the discussion? And crucially, why bother?

At a recent PepTalks conference – that many of you reading this may have attended – we asked three top female private equity leaders to share their thoughts, insights and advice. Here we learn more from PepTalks Honorary Members Dr Gabrielle Silver (CEO of Bioscript Group) and Keryn James (Non-exec Director of ERM) and Joanna Swash (Group CEO of Moneypenny).

‘Pale, male and stale’ or a representation of the world we are in?

If – to coin a phrase – your company is ‘pale, male and stale’ you may be constraining growth on multiple levels. Not only will you likely lose potential customers and clients, who will struggle to grasp whether you understand their needs, but you will put off new talent too, without even trying. The same rings true for teams already in the business.  PE backed CEOs are often appealing to colleagues to be bold, and innovative whilst focused on execution.  Diversity is the key to driving the creativity that underpins productivity.

“We need youngsters to look at business leaders and businesses in their communities and say ‘I want to belong there. I can see my career path and I know that there will be a place in that kind of organisation for me’,” explains Joanna Swash.

“I want my teams to build the most authentic relationships with their clients, in this case the Pharma industry. If I go into a meeting and I’m not representing the world that they’re in, which is pretty diverse, then I look out of place and I have to work harder to deliver and to convince them. I know that my organisation and its ongoing success will be constrained.”

Keryn James agrees: “You need to show that you’ve got the ability to understand where [the clients] are coming from,” she says. “The more diverse views you have around the table as you are building your strategy, executing it, and particularly, understanding risk and opportunity, the broader perspective you have on what might be a risk and what might also be an opportunity. And increasingly, we are being asked [by other institutions] ‘what’s your plan around diversity and inclusion?’ And so, capital comes into play.”

Be a diversity disruptor

Of course, it’s easy to say things must change, but how do you go about challenging the status quo? A good place to start is building a greater variation of gender and ethnicity, but there’s plenty more at play, as Joanna Swash explains.

“It’s not just about whether you have a man or a woman in the seat but is also about having a broad range of experience, and a broad range of backgrounds? Yes, if we have men and women and people of different ethnicity, that’s important. But there’s no point ticking those boxes if you don’t have diversity of thought. For me, that is what makes a truly great team. We all need to think in different ways, interview different kinds of people and make sure that a variety of people are actually invited to the table.”

Speed: the biggest barrier

For both Gabrielle Silver and Keryn James, greater diversity comes from bucking PE’s typical need for speed and acknowledging that change doesn’t happen overnight but will build increasing momentum over time.

“Everything in our world functions around speed,” says Gabrielle. “Everything has to be done quickly to reflect the typical investment cycle. As leaders we have a role to manage expectations that investment of time and energy up front will yield significant dividends.  Building diverse teams takes patience and a willingness not to compromise.

“We need to invest time and effort in fixing the more systemic problems,” agrees Keryn, “and address the short-term challenges, which stem from the fact that we are not really thinking about pipelining, right down to entrant level. When we’re hiring at junior level, who are we hiring? Are we building diversity from the ground up? In our training cohort do we have a diverse set of people? And if not, what are we doing to put people in that mix because when it comes to promotion, if you have a 50/50 mix on gender, as well as racial diversity, background diversity, technical diversity etc then you’re highly likely to promote a diverse set of candidates… because you’ve got your pipelining right.”

Showing weakness can be your strength

Unconscious bias has dogged the headlines in recent months and we’re all guilty of – and nervous of it. However, bringing it out into the open and showing our vulnerability can make all the difference.

“After the death of George Floyd, I knew I had to say something, but I didn’t know what and I didn’t want to screw it up,” explains Keryn. “I got together with six or seven of our staff who come from a Black American background, in all different levels of the organisation. I said, ‘OK, help me understand all of this’. And just by admitting that I was terrified of saying the wrong thing I found people were incredibly forgiving. It’s the not saying something, the silence that is insidious. We must be able to acknowledge unconscious bias; just because you’re a woman doesn’t mean you don’t have gender bias, for example. There’s a vulnerability as a leader that goes with this, and you have to be prepared to step into it and be a role model.”

“We’ve got to allow ourselves to be vulnerable and say what we think,” agrees Joanna.

“But we’ve also got to allow other people to be vulnerable and listen to them and accept the fact that somebody might say something and get it wrong. Let’s be accepting of that and help them on their journey. Because only by us all working together collectively do we get a better narrative for the future.”

What women want

So, what is the answer? For Keryn, there is a simple fix and that is to strip out biases right from the start of your recruitment process.

“It’s actually a really easy thing to do and the quality of the candidates that start to come through is significantly better. All of a sudden you will find your pipeline filling quite easily with people from quite diverse backgrounds. Not having role models is a hidden sort of iceberg for a lot of organisations. And I know that many women leave organisations where they can’t look up and see somebody who looks like them and they think they’re never going to make it. So, succession, getting diversity into your leadership team is very important and you will demonstrate that you’re serious.”

“It’s about commitment and authenticity,” concludes Gabrielle. “We need to be open if we aren’t quite near where we need  to be or that we haven’t got the right processes in place. It’s our job to have those direct and trusted conversations, not because we want to point the finger, but because we are part of helping make the change. You have to invest in your people from wherever they come from – and you’ll be rewarded if you do…”

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