Overarching Goals

Action 1: Without question firms can help their own pipelines by working hand in hand with schools to ensure that job opportunities are known to children. Firms can communicate the tasks that underlie their highest paying jobs to children through mediums that they use frequently, in language that they understand. There is a clear role for the firm to showcase relatable role models. Addressing information problems and providing role models makes salient to children the options that are available to them, as well as the benefits of shooting for a particular career.

Action 2: Firms can disrupt what ‘good looks like’. Ideally firms should be hiring based on skills, ability and talent only. However, they often rely on signals that are correlated with these attributes to the exclusion of top talent. Firms can move away from choosing talent from a small subset of undergraduate degree types or specific universities, and move towards task-based assessments that relate more directly to the tasks that the applicant will actually do day to day on the job. This opens doors for candidates who may have chosen an undergraduate degree that does not match well with their aspirations. It also opens doors to those who may have not had the opportunity to attend a top tier university. Overall, task-based assessment can circumvent a variety of cognitive biases. These include affinity bias, familiarity bias and halo effect.

Action 3: Firms can embrace learning and earning models. The decision to go to university is one that is liquidity constrained. For individuals of lower socio-economic status, this constraint can be enough to sway the decision to go. Learning and earning models open the door for children of lower socioeconomic status to pursue careers that previously required a college degree. In this setting individuals are hired as apprentices of firms, and given a salary as well as free access to an undergraduate degree. By removing the need to choose between going to university and earning a salary, firms open their doors to new talent pools.

Action 1: When selecting new colleagues and deciding who to promote devote adequate time to make sure that confirmation bias is not driving these key business decisions. Confirmation bias is the tendency to seek out evidence that confirms our gut instinct on who is right for the role. This is problematic because gut instincts are often driven by what ‘type’ of person has historically held a particular role. In the financial and professional services senior leaders in the UK have traditionally been white and male, and the retrospective image of what a leader looks like feeds our gut instincts. To overcome this, when turning away candidates that do not fit the typical image of what a senior leader looks like seek disconfirming evidence that challenges the prevailing opinion. For example, allowing someone who does back the candidate to present the case without interruption.

Action 2: When deciding who gets what and why, we often rely on signals. This is fine if the signals that we are using are correlated with skills, talent and ability. Valid signals include the quality of work done. However, in a world with time pressures invalid signals often cloud judgements. For example, an ability to put oneself forward most often or speak the loudest may garner rewards but it does not necessarily reflect competence. It is therefore important to decouple such unsubstantiated signals from true signals throughout the hiring process and career life cycle. This can be done by having clear criteria ex ante on what ‘good’ looks like.

Action 3: For firms that are worried about a lack of diversity across a particular individual characteristic, when hiring for new roles segregating CVs into piles that represent over and under-represented groups in your organisation. For example, if the concern is gender diversity the CVs would have one pile for males and another for females. Each pile of CVs is then ranked separately, allowing the top ranked candidates to be then cross compared across the two piles. Encouragingly the evidence from behavioural science tells us that cross-comparing the top candidate from each group side by side in this way makes it more likely the strengths of the under-represented group are acknowledged.

Action 1: Day to day opportunities include stretch project assignments, exposure to networking opportunities and having a seat at the table to input into important conversations. Ensuring there is inclusivity in these opportunities is key to keeping talent moving along the pipeline. Auditing who gets these opportunities makes salient who in the organisation is missing out. This is most easily done for project assignments, and can be reviewed at annual appraisal to ensure that managers are giving their entire team an opportunity to grow. Drawing attention to this monitoring can also encourage managers themselves to do monthly post mortems, allowing them to self-correct any favouritism in allocations.

Action 2: 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. These resources may be monetary (for example, bonus, training allowances or a salary increase) or time (for example exposure to senior management or favoured clients). However, the ability to ask for things is not known to be correlated with performance. This is problematic as the behavioural science literature emphasises that asking gives a good chance of getting a positive response, and being declined previously also brings a positive probability of success the second time around. To ensure that those who are less inclined to ask are not left behind, audit as many requests for monetary and time resources as is practical. This makes salient any gaps in allocation that may be driven by a tendency to ask.

Action 3: Understanding how employees interact with one another as they go about their day, can help identify homophily. This is the tendency for people to interact more with others that are similar to them. This similarity could be gender, age, socioeconomic status or another observable characteristic. Homophily can be identified via social network analysis, which is a data driven exercise that maps how people interact visually. Data that is used in social network mapping includes emails, messaging and phone-call data, in addition to, where employees spend their time in the building and even the content of their conversations. Identifying homophily, allows other interventions to be rolled out to address the problem.

Action 1: To move a team away from groupthink it is important to hear from everyone at the table. However, even then the natural tendency is for teams to tend to over focus on shared information. After all, we feel good about ourselves when we are discussing something that is familiar to us. This is not a good thing when employees need to be innovative and what is needed is a discussion of hidden information. To avoid groupthink, it is a good idea to separate out the brainstorming session from when a decision is actually made. Brainstorming sessions may relate to product design, pitching approaches or the assessment of risk. During this phase encourage people to bring their hidden information to the table. Putting some time between the brainstorming phase, and when the option ‘to go with’ is chosen takes the emotion out of the decision-making process. When picking between options the decision phase will also benefit from being based on hard evidence, ideally generated by people outside the group so the choice between options feels less personal.

Action 2: Take care to make sure that everyone in the meeting has a chance to be heard by taking steps to avoid cascading. Cascading occurs when a person who speaks in the meeting re-iterates the information given by the lead who came before them rather than revealing new information. This stops unique perspectives being brought to the fore. To move this habit, the person leading the meeting could set the tone by asking people to ‘tell me something I do not know’, and cutting people off politely when they try and re-iterate information already known to the group. They could also designate the first 30 minutes of the meeting to get written responses from everyone prior to the discussion starting, and reserve decisions being made until the content is reviewed and digested. This serves to allow introverts and others who are not usually heard in a meeting to become a real part of the discussion. The leader could also call on persons randomly, rather than allowing cascades to happen in their natural order.

Action 3: When innovating it should not be an unusual event to have unique solutions posed by only one individual adopted by the group. Make salient whether or not this happens by auditing decision making at group level. Are you always going with the ideas of a core mass rather than looking further into the less traditional suggestion posed by a colleague? This process can be helped by regularly providing forums that bring people together to discuss the benefits of people not always initially agreeing, and putting in place structures that re-assure people that dissent does not necessarily mean a bad culture.

Action 1: Across the world firms have created affinity groups that are based around gender, ethnicity, LQBTQ+ and more. These groups provide a great forum to share common experiences and highlight concerns, and when run well do provide a space with high levels of psychological safety. But it is important that firms encourage these groups to hold some events for others who do not identify with the group. Equally, it is important that the firms most senior management actually show up for these events, and encourage others to do the same. Why? If we only show up for the group that we identify with there will always be winners and losers, and unequal systems that reward characteristics that are unrelated to ability, skills and talent will continue to be rewarded. Firms must encourage their employees to champion change in areas that they do not personally gain from. If more people take the time to learn about how others are struggling real change happens. Change happens when a critical mass of people are all doing the same thing and a tipping point is reached. unconsciously. Today, many firms in the financial and professional services operate in environments with high levels of uncertainty. This manifests in terms of increased time pressure, and worries around redundancy and smaller compensation packages, along with a fear of plateauing in one’s career. People do not perform at their peak when they are operating in uncertain environments. It also a time when in-groups are more likely to form7, usually along some dimension of similarity which has a potential detrimental impact for inclusion. Uncertain environments also negatively impact decision making, at a time when choosing the right course of action is more important than ever. 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.

Action 2: A firm that embraces inclusivity to improve business outcomes should use data to hire, promote and reward. When hiring or promoting new senior leaders, examine their history on what they managed to achieve with respect to inclusion retrospectively, going beyond words and towards evidence. Tie rewards, such as bonus pay, to evidence that the person has created an inclusive work environment. Go further and link the inclusivity measure to core business outcomes, to make salient why this focus is important to the firm.

Action 3: Create leaders that bring along all talent in the organisation. This can be achieved by re-focusing on the middle manager and disrupting the type of leadership training available to them. Specifically, moving towards training that equips them with the skillset to i) avoid groupthink, ii) create psychologically safe team environments where dissent is embraced iii) understand how to make changes in their teams and evaluate objectively the effect of these changes iv) communicate in different ways to the inclusion of all talent. This approach has the added benefit of making mid-level managers the change makers of the organisation, which if embraced by a few can result in tipping the culture of the organisation as other mid-level managers see the benefits.

Action 1: In behavioural science there is a well-worn adage ‘context matters.’ This highlights that how we behave is affected by the cues we experience from our daily environment. These cues we process unconsciously. Today, many firms in the financial and professional services operate in environments with high levels of uncertainty. This manifests in terms of increased time pressure, and worries around redundancy and smaller compensation packages, along with a fear of plateauing in one’s career. People do not perform at their peak when they are operating in uncertain environments. It also a time when in-groups are more likely to form, usually along some dimension of similarity which has a potential detrimental impact for inclusion. Uncertain environments also negatively impact decision making, at a time when choosing the right course of action is more important than ever. 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.

Action 2: In industries like financial and professional services, interventions that promote inclusion can end up being ‘nice to have’ rather than viewed as core to the business. In addition, there can be a perception that progression is a zero-sum game, causing resistance to endeavours undertaken to enhance inclusion. This creates an environment that is not supportive of inclusion, with low levels of buy-in. However, inclusion of diverse perspectives can give a competitive edge. It is therefore imperative that companies disrupt how inclusion is viewed, by re-framing inclusivity as an objective for the entire business, rather than an objective for human resources. This re-framing can be done by linking measures of inclusion to traditional core business outcomes, highlighting clearly any benefits gained.

Action 3: It is important to monitor the environment of the firm, and link employee feelings of inclusion to core business outcomes. Measurement error plagues reporting of key subjective data measures when they are only asked at a few points in any one year. Moving to surveying the pulse of the firm on a more frequent basis allows organisations to understand better their employees sense of belongingness, and make easier difficult moments, and put more emphasis on shared positive times. Regular pulse surveying only needs to be done on a random selection of employees to be effective, ensuring there is no increase in the time burden of these survey types.

Action 1: Today there are very few occupations that benefit from having employees compete with one another. From the assessment of risk to product creation to how we communicate with our customers, better outcomes transpire if people work effectively together. Yet, extrinsic incentives typically are at the individual level. Employees mostly compete for promotions when there are limited positions, implying they compete against each other. Pay increments are normally linked to an individual performance review. Total bonus pay is generally allocated at the team level, implying what one team member gets another cannot. Disrupting how we reward employees may then be the key to getting teams working effectively together. This does not have to be all or nothing. It can start by having some element of bonuses linked to overall team performance, with the bonus pot being at the unit or firm level and allocated to the best performing teams. This encourages teams to work together for a common extrinsic goal, which aligns more directly with how we expect them to behave on a day to day basis. It serves to move away from individualism towards an environment where teamwork is heralded.

Action 2: Inclusion also implies that teams communicate effectively across an organisation and silos are avoided. Ensuring that information diffuses effectively within organisations is key to their success, as are strategic collaborations across teams. Monitoring how teams interact with one another in medium to large organisations can make salient if one team is siloed or excluded. This can be easily achieved with social network mapping utilising data on individual communications. This exercise also allows weak ties in the organisation to be identified, and for this information to feed into promotions and salary decisions. Rewarding people that encourage collaboration across the organisation outside their own team is a simple way to demonstrate that inclusion at this level is valued in the organisation.

Action 3: Collaboration can be embedded in a firm’s value statement as a mechanism to enhance inclusion. It is then necessary for senior leaders to lead by example, to ensure that this message filters down to the entire organisation. Focussing on collaboration as a tool to enhance inclusion has the added value of bringing the message into the entire business, moving it from ‘nice to have’ to ‘need to have’.

Action 1: Agile working is a way to get the best out of your talent if used effectively. Not everyone does their best work during core business hours. Devoting some resources to figuring out when individual employees are operating at their peak can allow firms to deconstruct what the traditional working day looks like, in favour of a system that allows for individual differences in concentration style, while still maintaining some core hours for team gatherings. This approach gives employees autonomy which has been linked to higher levels of productivity and worker wellbeing. It also allows for the inclusion of a variety of different workstyles, beyond the traditional working model, allowing more people to perform at their best and advance in the organisation. If operationalised effectively it can be directly cost effective, allowing firms to downsize on their space requirements.

Action 2: Re-labelling flexible working as agile working can reduce the stigma associated with an employee constructing their work week to accommodate childcare and other caring duties. This has the obvious benefits of including more women in the organisation, given that on average they still take on a greater share of childcare responsibilities. To be effective this type of working relationship needs to be embraced by its most senior leaders, with a significant number of male and female role models who visibly adapt their schedule to accommodate duties at home.

Action 3: Agile working can also be extended to effectively tackle statistical discrimination, which undoubtedly holds women back in their careers. It is a fact that women take more time out of the labour force than men because they rely on maternity leave when they have children, and also take on more responsibilities in the home environment. Rather than trying to get every employee of the firm to accept that women will have lower periods of labour attachments around the birth of their children, firms can encourage all employees to take career breaks that equal the sum of a usual maternity leave term a few times over their tenure. Embracing on and off ramps in this way recognises that careers are getting longer, and males and females may like to take time outs at various points for quality family time, buffer a period of illness, deal with burn out or further study. Framed in this way both males and females are likely to avail of the facility, mechanically reducing the stigma women face when taking months off after a child is born.

Action 1: Status quo bias can lead us to believe that the clients we serve want to be served by someone who is on call all the time. Even for the most demanding customers there is no clear evidence that this is the case. Moving to having teams, that are rewarded as a collective, rather than having individuals serve clients and stakeholders within the business is worth rolling out in a staggered methodology so effectiveness can be established. This approach also bodes well with choosing inclusion over presenteeism, aligning with a push for agile working.

Action 2: When hiring talent bring to mind the customers that they will serve, and pay attention to customers whose preferences may be under represented with the current teams available. Representation shouldn’t be chosen in lieu of core skills, however being able to see the viewpoint of potential customers should be seen as a skill in and of itself. For example, arguably having a better representation of women in trade finance can help with getting more clients who are female entrepreneurs. Similarly, having teams in retail banks that represent its customer base makes it more likely that products are created that customers will use. Approaching the recruitment of talent with different voices in this way makes it more likely they will be included in the teams that they join, as their added value is made clear.

Action 3: As a client that knows full well that inclusion drives better business outcomes, demand that the teams that pitch their services or products to you are diverse. Here, visible diversity is a pulse point that is telling of whether the pitching firm values inclusion, and is usually correlated with less visible aspects of diversity. This type of supply chain management can advance the inclusion agenda and is imperative if your firm has a mission statement that explicitly states inclusion. Having a client turn firms away for business makes salient that they need to change, essentially bringing the cost of a lack of inclusion into the present day.

Action 1: Firms benefit from taking seriously the measurement, tracking and linkage of inclusion to traditional business outcomes as well as innovation at the firm level. By undertaking this type of analysis in a rigorous causal framework they can demonstrate to shareholders the likely benefit of investing in them. These messages can be relayed in public forums and conferences. When presenting findings in the public domain firms can also use their influence by avoiding panels and other settings where there is a clear lack of representation of different voices on the panel.

Action 2: Firms can also benefit from taking seriously the measurement, tracking and linkage of inclusion to employee wellbeing, showcasing the findings in the same manner as Action 1.

Action 3: Firms who are investing in inclusion should consider undertaking research that links macro measures of inclusion to macro level business outcomes in cross firm analysis. In theory inclusion should lower behavioural risk and enhance the bottom line of the firm over the long run. Credible statistical analysis that demonstrates these relationships as stylised facts allows firms at the forefront of interventions to enhance inclusion to be viewed as more attractive to investors seeking out long run investment opportunities.