HR and the importance of Diversity & Inclusion

Paul Richards, Founder, Better Decisions.

Working with many great HR professionals over the years, I know that it’s an important but tough role. You have to oversee talent acquisition and retention, engagement, motivation, performance and well-being. And all of this occurs in a rapidly changing environment with an ever-growing compliance burden.

An important area that increases the complexity of all of these issues is Diversity & Inclusion.  How we think about this subject will influence the colleagues that we hire, the culture that we bring them into and the processes that govern how they grow and progress. This will ultimately impact both their success and well-being. Given wider debates in society it can also impact how our companies and management are perceived.

However, D&I is a complex issue to get right. Who should we listen to when we set policies and practices? How do we balance the need for short-term action with long-term success?  How can we create greater engagement and reduce any potential resistance?

There are no easy answers to these questions, but in our seminar for The Surrey & Sussex HR Forum, Mitesh Sheth MBE (Chief Investment Officer for Multi-Asset, Newton Investment Management) tackled these issues from a different perspective: human behaviour.

My expertise is in the art and science of decision-making. I help boards, committees and teams understand how human nature can skew our perspectives and choices and what we can do about it. As someone with a strong interest in D&I, I’ve also been involved in several initiatives over the years. This has been both in the context of thinking about the evidence base and how things can work operationally.

As someone who has been a strategic leader and who thinks about human behaviour, it has struck me that whilst our current approaches to D&I have brought forward positive change, they might benefit from diverse perspectives on issues that aren’t universally discussed.

Diversity & Inclusion – driving positive outcomes with behavioural insights

On 21st June 2023,  Mitesh and I gave a seminar that was hosted for members of The Surrey & Sussex HR Forum.  Mitesh is known as one of the leading D&I voices in the investment industry.  We have worked together and have often discussed how considering human behaviour can improve strategic thinking and how we implement D&I policies.

In the session, we discussed:

Thinking clearly about D&I

For any people issue, if we want to make lasting and effective change, we need to be able to think clearly about it. What factors might skew our thinking about D&I?

Knowledge of D&I – advocates and evidence

How do we know what we know about D&I? Often the evidence that we use comes from advocates. Whilst that can bring tremendous energy and consistency of message, advocates will often bring an explicit or implicit view to the table. This may skew how we approach things – as an example, we discussed how advocates and academics have different perspectives to the ‘business case’ for D&I.

Groupthink around D&I issues – is this a problem?

We’ve all heard about the problems of groupthink and it’s often a rationale for diversity initiatives. However, D&I initiatives often attract people with strong and consistent views of the problems to be tackled, what causes these problems and how they can be solved. Does this create groupthink and if so how can we broaden the discussion so that we get the most effective solutions?

The ‘Spiral of Silence’ – what aren’t we hearing?

Elisabeth Noelle-Neumann’s ‘Spiral of Silence’ theory posits that individuals tend to remain silent or withhold their opinions on controversial topics when they perceive their views to be in the minority, due to a fear of social isolation or reprisal. D&I is likely to provoke ‘spiral of silence’ challenges. How can we understand and manage them?

Strategy and metrics

If we want to create effective change in any area then we need to think effectively about it.

We discussed:

Strategy – beginning with the end in mind.

What is our long-term endgame, and why and when is it achievable? There is value in moving beyond, ‘it just needs to be better than now’ to surfacing important strategic questions such as, ‘What would we expect the long-term outcome to be in a free and fair world?’ Although we won’t always be able to get clear answers, asking good questions can aid our ability to think strategically.

Metrics – “What gets measured gets managed”

Metrics are important for understanding progress, but when we have a strong focus on numbers, it can incentivise behaviour that may cause issues for all parties, e.g. when hiring or promoting colleagues.

Understanding and framing outcome measures

Every year, we have to talk about important numbers. How we do this can impact both their understanding and how people react to them. How can we understand and use the power of framing to talk more effectively about long-term outcome measures, e.g. GPGs?

Getting people to change

Any workplace initiative, including D&I, stands a better chance of success when there is broad-based support. What does psychology tell us about the best way to get people on board and avoid backlash?

What do people value?

A longstanding debate that will inform our long-term strategy is whether we are aiming for some form of equality of opportunity, or whether we are looking to equalise outcomes.  What is it that humans want – equality or fairness?

Working with the grain of human nature – humans are tribal creatures

Most people want to be good and be seen as good. How can we best leverage this to create good D&I outcomes? The pros and cons of focusing on differences vs. similarities and voluntary versus compelled behaviour.

My podcast

In an episode of my podcasts with Joe Wiggins, called Diversity & Decisions: Things you don’t usually hear from a D&I advocate, we explore many of these aforementioned subjects with our guest, Tom Gosling. Tom is a committed supporter of D&I and is a practitioner turned academic who helps build bridges between researchers, policymakers and those at the coal face.

He has an interesting take on some important strategic and practical issues that we should consider if we want to improve D&I outcomes for colleagues, our firms and society.  We cover a lot of ground, including:

– Why do we focus so much time on the business case for diversity and what does the evidence actually say? (it might not be what you think)
– Four risks that overstating the business case for diversity can create for individual D&I initiatives and the wider long-term project
– Diverse teams can generate the best or worst performance – why?
– Understanding the role of social integration in making diversity work
– Things that we’re not talking about but should be: understanding the links between demographic and cognitive diversity, occupational role choice in a fair and bias-free world and whether we’re being diverse enough about how we think about diversity