Why inclusion must be a strategic priority where we see more than awareness but true action.
There is a stark difference between diversity and inclusion. We need to understand this because it is true inclusion, not diversity alone, which drives sustainable growth. Inclusive organisations are the ones thriving but also driving the future. Fail to enable an inclusive culture and lead from inclusive leadership and you fail as a business.
Recently I spoke at the IICF Women in Insurance Global Conference in New York. As a firm believer in the need for inclusion on a grander scale, and a business leader who is actively embracing inclusivity in my business endeavours, I felt confident that my own thinking was ahead of the game. I came away from this conference realising that not only does the industry still have a huge amount of ground to cover, we as inclusive leaders still have progress to be made too if we truly want to realise the benefits of inclusion, which we must.
We can expound the arguments for diversity inclusion on a social, moral and ethical basis. There is nothing new there. However, what is new is our growing understanding that inclusion is more than the ‘right’ thing to do but something we must do. It is the inclusive organisations which are the creative innovators. Where inclusivity is lived, not simply nodded to, the bottom line grows, sustainably, with power.
There is one simple statistic alone which demonstrates this power. BCG undertook research which showed that businesses which had above-average diversity in the make-up of their management teams secured innovation revenue a staggering 19 percentage points above the innovation revenue of those with below-average diversity in their management team. A whopping 45% compared to just 26%.
This statistic – concerned with one area of diversity alone (age) – makes us realise that it makes business sense to embrace inclusivity. Imagine the power of diversity if it covered all types and was met with more than diversity alone, but inclusion too.
Diversity can be seen as the physical make-up of our workforce. Take a snap shot and do a headcount. Diversity is all about the numbers. For example, how many people of colour?
The key to measuring diversity is twofold: improvement over time and how you compare to the demographics around you.
However, diversity does little to actually harness the benefits of a varied workforce alone. Simply having the numbers ‘on the books’, doesn’t mean your organisation realises the benefits of having a workforce which is not homogenous.
To move from diversity to inclusion we need to move from awareness to action. Again, real-life data from the business arena supports this argument. One study, by Gartner, demonstrates that ‘highly inclusive organisations’ generate 2.3 times more cash flow and are 120% more successful at meeting financial targets. Again, beyond the social, moral and ethical argument, we can see the financial argument for inclusion too.
This puts the insurance industry, in line with many other industries, under a painfully bright spotlight. As an industry we are renowned for our old-school thinking. It’s normal for the board of insurance companies to be dominated by white able-bodied straight men. Yet the evidence above clearly states that this is not what we need for sustainable growth.
This brings us back to our need to deeply understand inclusion and how it differs from diversity alone. It is one thing to understand that diversity is about numbers and demographics and that inclusion is about acceptance and respect, but what does this actually look like in practice? How do we practice inclusion so that we don’t lose our competitive edge?
Firstly, we need to dive more deeply in to our understanding of diversity to act as a springboard for inclusion. All too readily we think of diversity as being about race, age, religion, disability, sex and other such characteristics. We need to go beyond this before we can even hope to embrace true inclusion.
An excellent explanation of this is given in the article Diversity’s New Frontier by Deloitte Insights. Here three types of diversity are explained. There is the ‘legal’ category which matches our typical understanding of diversity, for example someone’s sex. We know that legally we must not discriminate on these grounds. More forward thinking organisations are going some steps towards not just discriminating, but actively attempting to represent the authentic demographics of their society.
The next type of diversity is ‘experiential’. This category explains how we are diverse because of our life experiences, for example, whether an individual is a parent. Finally is ‘thought’ diversity. This is the diversity driven from what we think. It centres on how our ideas and understanding are diverse.
When we understand diversity within these three distinct types, we realise it is far more complex than we at first presumed. Following on from this, inclusion (the action of true diversity) becomes a more complex concept too.
Moving beyond the tick-list of the legal type of diversity we can begin to see that inclusion is going to require far more than simply shaping the demographics of leadership teams and workforces. Inclusion is not so tangible.
Let me explain with an example. A board which is truly diverse, representing the non-homogenous society in which it operates, with a careful balance of men, women, different races and backgrounds, ages and disabilities, and more, isn’t necessarily inclusive. The individuals making up the board may still be restrained by operating in a non-inclusive culture.
For example, the Muslim board member may nip out of the office to pray. The parent may feel they aren’t meeting the needs of their children and suffering from stress as a result. The youngest member feels that they aren’t as senior as the oldest, despite being at the same level. The disabled aren’t even present because they are ashamed of the accommodations which need to be made.
In this ‘hidden’ culture the organisation misses out on the benefits those same individuals might bring. This problem is exacerbated by a concept so prevalent it has a name: the invisibility syndrome. Individuals who have experienced discrimination, even in seemingly minor ways, will downplay their own worth and good work with a hope that leadership will simply notice. They will try to fit the model of what leadership culture dictates they should be, not who they actually are. At best they are never present in their authentic selves in leadership and at worst, they are never physically part of the leadership at all.
In the insurance industry, it is at the start-up level that we are increasingly able to adopt inclusive cultures and inclusive leadership. Unhindered by the dinosaur-mentality of traditional insurance business models and structures, start-ups are able to not only represent the communities from which they arise, but also actively drive the insurance sector through innovation in to providing for our future customer. This really matters when we realise that our customer of tomorrow is a distinctly different customer from the one we serve today.
In many ways there is a snowball effect. Start-ups, by their nature are small. They are technologically-driven. As we blend the emerging technologies of different start-ups with each other, and the diverse individuals behind them, with wider industry players, we introduce greater inclusion from the bottom up. Insurance businesses which want to thrive in this evolving InsurTech arena, have to embrace the very inclusivity which is driving innovative growth in the start-up world.
It’s possible to see that this is actually of enormous benefit for the industry as a whole to be revitalised. This reshaping of the traditional business model empowers entrepreneurialism and innovation. An industry struggling to engage the minds its needs, can engage them through the start-up. It’s very much what Startupbootcamp and the accelerator programme is about – matching innovators (highly diverse start-ups) with traditional insurance giants. Both parties benefit, but importantly, so does the entire industry.
Inclusion doesn’t just happen. It needs to be actively worked on. This can only happen through approaches which embrace everything from new recruitment strategies to training for leaders. The common thread of each approach, when we make inclusion a strategic priority, is flexibility. We need flexibility of practice and flexibility of thought.
Our customer of tomorrow is not a homogenous group. We will not be able to look at them and see one dominant ‘character’. To serve them we need to be relevant by embracing inclusivity. Flexibility may be a standard weak point for insurance companies, but we need to radically change that if we want to achieve sustainable growth.
On the ground this flexibility may be allowing the digital native to work from anywhere at any time. It may be embracing the concerns and causes that matter to an individual from a minority group. The result is innovation.
It’s actually a very simple concept. If we as leaders face a problem we will work towards a solution drawing on our background, experiences, knowledge and sense of self. If that leadership team all looks and thinks alike then the solutions are narrowed. Conversely, a diverse and inclusive leadership team will face the problem and creatively draw on differences to come up with a range of solutions which through inclusivity narrows to onerefined course of action – one which simply wouldn’t have been realised in a homogenous leadership team.
There’s an added benefit to this non-homogenous flexibility. This style of problem solving is considerably more responsive and agile. Given the fast paced rate of change in the insurance industry due to digital technologies disrupting the landscape, we definitely need to be agile and responsive to thrive.
From here we jump to other benefits too. Most importantly, and strategically, we begin to future-proof our workforce. We cannot be behind the times because one day we will simply be left behind. We know from experience that diversity and inclusion cannot be born overnight.
We have to take the steps now to make our workforce and culture reflective of who we want to be tomorrow. But we can only achieve this if we accept that there is more than one way of doing things, and that maybe, just maybe, another way is better. Indeed, it may perhaps be that these different ways of doing things may in fact be the lifeblood of future products and services.
Yes inclusivity is the key to sustainable growth. However, as well as this inclusivity is the hotbed for innovation, as we’ve explained above. Innovation is going to matter even more for the insurance industry as time goes on.
This is because in addition to an insurer’s credit score, insurers will now also be rated in terms of an innovation score. Look a little closer at how this scoring will work and one of the four key performance evaluation criteria is the ability to deliver a diverse and inclusive culture.
If for no other reason, this alone should be enough to make you push towards greater inclusivity. Inclusivity will bring us innovation. It goes further though. It will help us acquire customer and talent. It will help us to hold on to those same individuals.
To drive authentic inclusion we need to look deeper than our understanding of diversity to date. We also need to look towards our culture and ethos. Inevitably, it will require us as an industry to ask difficult questions around the framework of leadership. We need to realise that business priorities will be impacted, but that this isn’t a negative thing.
The business priorities that we need to pay heed to can be sub-divided in to four areas:
This all brings us back to how we actually achieve inclusivity in practice. Discussing inclusivity and innovation with other insurance leaders we can begin to see how inclusivity is an action, and embraced at a ground level.
Action starts with a visible commitment to the business case for inclusion paired with the courage of conviction about it, knowing that mistakes will happen and risks need to be taken. We need to embrace inclusivity as fundamental to who we are by treating all people with fairness and respect whilst recognising and promoting uniqueness.
This is only achievable when we approach leadership with an ethos of humility and curiosity. To foster contributions from others we need to give room to them and be curious about them too. Through humility, leaders can operate within safe parameters where the entire organisation benefits from the wider problem-solving approach mentioned earlier.
Our humility will also enable us to recognise, accept and address our own (often unconscious) behaviours and biases. Knowing your own blind-spots is incredibly difficult, but challenging our preconceptions through discussion and such things as employee resource groups, we can begin to address and change these. Indeed, we may be able to move towards affirmative inclusion whereby we address our biases head on understanding that it is strategically beneficial to do so.
Deeply challenging the way we ‘do’ inclusion and diversity is the birth of a new concept: cultural intelligence. Our diversity and life experience means we do not see things in the same way as others. Cultural intelligence, in a way similar to emotional intelligence (EQ), is about our ability to understand and see things from a different cultural viewpoint. It is about our understanding of cultural nuances and differences. It can be as beneficial to us as leaders as our emotional intelligence (EQ) or indeed our IQ.
With cultural intelligence we are able to foster a sense of belonging where effective collaboration is made possible. It’s a route to realising the benefits of inclusion. In many ways this is made possible because through cultural intelligence leaders can reach out more and play detective to ensure invisibility syndrome and unconscious biases don’t become roadblocks to innovation, problem-solving and growth.
I left the Women in Insurance Global Conference having found a new sense of humility and reflection on the complexity of diversity and inclusion. We all need to make changes to bring about the differences in the industry if we are to drive the future of sustainable growth. We need to ask what we can do and what are our own unconscious biases? Authentic and conscious inclusion is the key. In addition to moral and ethical reasons, we need to drive inclusion if we want to achieve sustainable growth.