Does Finance Have a ‘Woman Problem’?

This year’s International Women’s Day is calling on women everywhere to #choosetochallenge. I suspect that theme may result in quite a bit of eye-rolling amongst many women, not least in the financial sector whose first thought may well be ‘why should I have to?’ or ‘what do you think I have been doing these past years?’

The financial sector isn’t alone in having a ‘woman problem’. Underrepresentation of women at senior levels has been a perennial problem in industry, tech, construction – you name it. And early indications are that the pandemic is setting back progress made towards gender equality.

That’s not to say the financial sector hasn’t taken steps in the past to try to ‘fix’ its woman problem – aka senior female under-representation – with a focus on ‘getting’ more women.  The problem is that this focus on representation rather than culture is rapidly becoming part of the problem.

Often designed by men, or by women operating in male-dominated environments, the fix tries to train women to succeed within that male-dominated environment. This doesn’t do much for diversity. The fix involves courses, programmes, initiatives, events, panel discussions, coaching, mentoring, all centred around male ideals of leadership.

These can all be helpful and have a place. But the real problem isn’t so much the women (they need to be allowed to be their unique diverse selves), it’s the male-dominated system and the lack of male allies. Brilliant people are currently busy prioritising the wrong thing.  Women’s programmes and schemes are a distraction from the real cultural problem in finance.

Focus on inclusion, then diversity

There is a catalytic effect of male-dominated cultures attracting more men because they have to adapt less and can fit in more easily. They unconsciously benefit from network effects. Men are more likely to be promoted and more likely to stay in finance jobs, especially at senior levels. Financial companies often feel male – macho brand positioning, alpha trading floors, and cavernous receptions, all projections of power.

One of the reasons women are less likely to be promoted is because they are less self-promoting. This is not a deficiency. We know from studies that whilst men are likely to put themselves forward for a promotion when they can do 50% of the job description, women typically wait until they can do 90% before putting their hand up. And the main reason they are more likely to leave is culture.

In other words, it’s inclusion that drives diversity, not the other way around. It’s culture that determines the diversity numbers. You can’t fix culture; you have to build it. The ‘fix’ then follows.

The problem is that this focus on representation rather than culture is rapidly becoming part of the problem.

Focus on demand, then supply

Most companies make the mistake of over-reliance on the talent supply side. Yes, the supply of talent is critical for a business and, yes, there are female shortages in STEM subjects. But it’s the demand side that can make or break how the supply of talent is included.

At London 2012, one breakthrough moment came by changing the interview location from the Canary Wharf office to Mile End Community Centre. By changing the system, not the candidate, we had a far better effect on the demand side and the behaviour and self-awareness of our recruiters. We achieved a step-change in diverse recruitment.

Companies can say they want women, but the real test is in whether this is a fix or a strategic cultural priority. Do they walk the talk? If they say they do, but their business model is still resistant to flexible working, do they really? If they say they do, but all the female promotions are extroverted characters that better fit in with the men, then do they really?

Make unconscious behaviour more conscious

At many global organisations, all traditionally male-dominated, we have recently conducted inclusive leadership programmes with largely male teams. The purpose of this is to hold up the mirror (to the men in particular) and reframe diversity as a leadership issue (for them personally) and to show them the powerful role they can play as allies.  By taking them on a journey over a period of weeks we can avoid the usual failing of ‘diversity training’ and instead focus on repeated behaviours that sink in over the course of the programme.  People internalise diversity as a good thing in their own self-interest and are far more receptive to seeking it out as a result.

Nudge the remaining unconscious behaviour

But training alone doesn’t work. Up to 97% of our behaviour is unconscious – to tackle the majority of our actual behaviour, we need nudges.

We deploy nudges throughout HR processes and systems. We analyse a system (let’s say recruitment) and we identify the gaps and biases in it. Then we prioritise which ones to intervene in, and de-bias them by implementing process changes (nudges).

Recent examples include presenting anonymised CVs side by side, implementing mixed panels, and recruiting and assessing groups of individuals at the same time, not individuals one by one.

At KPMG UK, in 2014, all Regional Chairmen were male and the talent pipeline was (unconsciously) largely male. We led a series of sessions involving all Regional Chairmen to map the three-year talent pipeline for the business.

They placed their initial candidates’ names on a large whiteboard in red ink by groups of one, two and three years away from promotion. Then they rewrote female names in green. This showed that women had been de-prioritised in the process to date. Candidate-by-candidate they discussed the business case and the reasons for each candidate’s position and slowly and surely many women started to advance from three years out to two years out to ‘promotion ready’.

We were leading a process to point out the group’s collective blind spots. None of them was maliciously sexist or consciously discriminatory. But all of them had been susceptible to the blind spots of 1-1 promotions, without the big picture view of group aggregation.  They simply didn’t know the women as well as the men and the women hadn’t put themselves forward as obviously as the men. This process resulted in more competition, more rigour in decision-making, and more diversity in promotions

So, if you really want to solve the ‘woman problem’ and attract more female talent into finance – yes, continue your supply-side work, but focus a lot more on the demand side.  And by all means, continue your unconscious bias training but focus a lot more on the real unconscious behaviour going on below the surface.

As Bob Diamond said: “Culture is what happens when no one thinks they are being watched”. You can’t apply a technical fix to a cultural problem and expect to solve the problem. If you really want to attract more women into finance, focus on the men.

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