Best of 2016: “Diversity Is the Engine of Invention”
“Diversity isn’t just sound social policy. Diversity is the engine of invention. It generates creativity that enriches the world.” — Justin Trudeau, prime minister of Canada
If there was a poster child for “Diversity 2016,” it would be Justin Trudeau. At the 2016 World Economic Forum Annual Meeting in Davos, Switzerland, the Canadian prime minster reminded delegates of something that academics and others have been saying for quite some time: Diversity leads to innovation and creativity.
Just two months before his speech, Trudeau had named the most diverse government in his country’s history, with an equal number of men and women. It was a cabinet, he said, that resembled Canada.
With his words, Trudeau joined a chorus of voices calling for more diversity in the workplace, whether that be in government or in the private sector. Over the past year or so, these voices have reached a crescendo: Hardly a week goes by without another article on diversity or unconscious bias. Moreover, the body of research, on the effect of diversity on the bottom line and the positive benefits across organizations and teams, continues to grow more robust, with several new studies released this year.
It’s harder than ever to dispute that more balanced teams deliver better results.
But the financial industry still has a ways to go. Using CFA Institute as a proxy, just 18% of members globally are women. Similarly, Oliver Wyman’s comprehensive report “Women in Financial Services 2016” notes that worldwide only 15% of portfolio managers are women.
These are numbers we need to change if we really want to increase diversity in the financial industry.
About 18 months ago, CFA Institute launched the Women in Investment Management (WIM) initiative to improve investor outcomes through diversity. We set ourselves three broad goals over the next decade:
- Increase the number of women who join the profession and earn the CFA charter.
- Retain women in the profession and influence culture from within.
- Create demand for diversity as an industry imperative.
As part of this endeavor, my colleagues and I try to keep a look out for thoughtful articles and compelling new research.
In a year that many would call an annus horribilis, I’m encouraged by the number of articles published and the ongoing discourse on the benefits of diversity. Here are a few of my top picks for 2016:
- In “Why Diverse Teams Are Smarter,” David Rock and Heidi Grant of the Neuroleadership Institute, have a great line: You may feel more at ease working with people who share your background, but you shouldn’t be fooled by your comfort. They argue that having a diverse employee pool “is key for boosting your company’s joint intellectual potential.” Moreover, “Creating a more diverse workplace will help to keep your team members’ biases in check and make them question their assumptions. At the same time, we need to make sure the organization has inclusive practices so that everyone feels they can be heard. All of this can make your teams smarter and, ultimately, make your organization more successful, whatever your goals.” Harvard Business Review published several articles on diversity this year, and rather than highlight them each individually, I encourage you to visit HBR‘s Diversity section for a comprehensive list. Two more stood out from the HBR‘s July-August issue: “Why Diversity Programs Fail” and “Designing a Bias-Free Organization.”
- Therese Huston, author of How Women Decide, knows there is a double standard when it comes to how men and women are perceived as decision makers. Earlier this year she spoke with Forbes about women’s leadership and decision making, why she has reservations about the phrase “women’s intuition,” and (a personal favorite of mine) how women, through social sensitivity, tend to raise the collective intelligence of a group that’s trying to solve a problem.
- One of the pioneers of the collective intelligence research that Huston references is Anita Williams Woolley of Carnegie Mellon University. Woolley spoke at the recent Alpha and Gender Diversity: The Competitive Edge conference, sponsored by the WIM initiative. There were lots of great sessions: You can catch up on the highlights and access links to published content from the event, including two archived video webcasts.
- Some days it can feel as if we are drowning in a sea of information and advice. And sometimes we feel powerless to take action. In this short article, Amanda Parker, CEO of SimplyInsight, a Toronto-based tech company, talks about some simple steps we can take to challenge the status quo: (1) Be conscious that unconscious bias exists; (2) call out gender bias when you see it; (3) create a plan for your employees; and (4) create a culture of mentorship.
- If you’re looking for more hard data (proof!) on why we should care about diversity, I encourage you to scroll through the latest research, from Morningstar, McKinsey & Company, Credit Suisse, and Mercer, among others, that we have curated and posted to the WIM homepage.
- Finally, I would be remiss if I didn’t include the largest ever survey of investment management professionals on the subject of gender diversity, which was published by CFA Institute in September.
If you have read something related to diversity that you think we should share more broadly with members of the WIM LinkedIn network and readers of Enterprising Investor, please leave a comment in the section below.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
Image credit: CFA Institute