By Katja Rieger, Ripple Effect GmbH
What has D&I to do with Risk Management, you may ask?
Imagine this scene. A senior executive speaks disparagingly about ESG, “just another fad and so much work to find the data, let alone report it”.
A mid-level team member is really passionate about ESG, and she has some ideas, yet she remains silent. The senior executives had belittled her ideas before, has called her naïve and generally does not listen when she speaks. She has become more and more silent, despite her expertise, her PHD, her track record from the other company, that got her the job.
A month later the senior executive is overheard to make the same disparaging remarks at a client event. It gets out, pretty quickly there is a shit storm calling for a boycott of the organization and a sacking of the exec.
Katja Rieger
Ripple Effect GmbH
The exec could have shared his frustration about ESG reporting and the mid-level team member spoke up. She knows that her voice and opinion are appreciated. The exec has his at times strong opinions, yet he is known to listen to different views. The dialogue that follows usually helps him open his mind to other solutions and softens his stance, because he realizes, there are more facets to the situation. A solution is found, the company finds a way to act responsibly and benefit from the marketing.
The difference between scenario one and two? Inclusion.
Inclusion is more than D&I. We have diversity if we like it or not. Inclusion is how we deal with it.
What makes inclusion so very effective is, that it does not differentiate between one diverse aspect or the other. Gender, demographics, age, race or even the majority, all benefit from inclusive behaviors.
Inclusive behaviors are those behaviors that lead to people feel included. They feel respected, listened to, appreciated.
Some of those behaviors are, that everyone in the team is specifically asked for their opinion and ideas. Or that listening is practiced and not listening is called out. It can be that people, especially on leadership levels, are trained on bias and how to seek different perspectives. They may have been trained in self-awareness or in asking and accepting feedback.
The goal of all these behaviors is to create psychological safety, for everyone and especially for those who are not “typical”, who are not represented (yet) in the senior levels of decision takers.
The goal of all these behaviors is to create psychological safety, for everyone and especially for those who are not “typical”,who are not represented (yet) in the senior levels of decision takers.
Today’s work environment has many standards, mostly unspoken, unwritten rules, that you must understand. Because they are unwritten, you cannot learn them, you have no rule book. Now imagine a person, who comes from a different work culture. Many of those rules are unknown to them. They may unknowingly act against them and be frowned at or be ridiculed. Imagine the even more difficult situation of a neurodivergent person, for example a person in the autism spectrum. We have many autistic people in the financial services industry, for example in actuarial, modelling, and similar professions, because many autistic people are excellent in pattern recognition, data analytics and have attention for details.
Most of them are not “out”, because they fear adverse consequences. Most of them “mask” to conform to whatever “normal” standard the company espouses. The problem with masking is, that it takes a lot of cognitive effort, and that people, who mask, do not feel safe and will often remain silent, even, when it would be advantageous for the organization to share their ideas and knowledge.
And here we come back to good risk and decision taking. Imagine an autistic person modelling a risk and coming to a different conclusion than others. However, because he is uncomfortable pitching for his findings, they remain unknown to the decision takers. Or she finds a mistake, but is quickly dismissed with her findings, because she is different. Or they are new and have a better idea, but because newcomers are expected to remain silent until they have gained more internal recognition, they don’t share the better solution.
We have many autistic people in the financial services industry, for example in actuarial, modelling, and similar professions, because many autistic people are excellent in pattern recognition, data analytics and have attention for details.
To make the best decision and to check for all potential risks from every perspective, you need safety, and you need dialogue.
By the way masking is a very common phenomenon, even among the “typical”. In a recent D&I training on LinkedIn, the expert shared, that an LGBTQ+ person masks 80% of the time, black women 75%, white women 65% and white, hetero men still mask 45% of the time. And now imagine all the cognitive power wasted on masking going to finding solutions and sharing knowledge.
To conclude: For good risk taking and for a thriving organization in general inclusion is an excellent way to create the risk culture you need
And if you have achieved inclusion, there is another level to reach: belonging. The secret sauce to win the war for talent and to succeed in the future of work!