Diversity, equity and inclusion (DEI) are more than inspirational goals; they are fundamental principles that drive organizational success. While inclusion is listed last, it is by no means least: A culture of inclusion provides the catalyst for a diverse workforce to enhance business success.
Recently, I had the opportunity to sit down with Katrina Dudley—SVP of Public Market Investments for Franklin Templeton and a co-author of Undiversified: The Big Gender Short in Investment Management—and discuss some actionable steps leaders can take to promote DEI within their organizations. Here are some key takeaways from our conversation.
Create inclusive spaces
One of the most effective ways to foster inclusion is to proactively give new voices a seat at the table—literally. Katrina shared a practice she employs when entering a boardroom. She deliberately moves her own chair to make space for diverse talent at the main table, who might out of habit tend to sit on the periphery. This simple act sends a strong message that their contributions are valued and that their voices are essential to a more effective decision-making process.
“Whenever I go into those rooms and I see diverse talent making a beeline for the chairs on the edge, I will deliberately pull my chair over and make room at the table for them. Because I just think that messages to them, ‘We would like your contribution, and we want your opinion at the table where the decision is being made.’”
Katrina takes this action to do more than inspire colleagues: She knows it is good for business. McKinsey & Company’s research indicates that the business case for gender diversity on executive teams has more than doubled over the past decade. Companies with the most gender-diverse executive teams are 39% more likely to financially outperform competitors with the least gender diversity, and companies with ethnically diverse leadership have an advantage of the same magnitude.1 Furthermore, Harvard Business Review highlights that, “Inclusive organizations are 73% more likely to reap innovation revenue, 70% more likely to capture new markets, up to 50% more likely to make better decisions, and up to 36% more likely to have above-average profitability.”2
Actively listen and encourage participation
Inclusion means more than physical presence—it means actively listening to diverse perspectives and incorporating them into the discussion. Leaders must create an environment where all team members feel heard and respected. Pursuing this goal might involve disrupting patterns where a limited range of voices dominate most conversations, ensuring that everyone has an opportunity to speak, and sometimes even having the leader speak last.
“But when we talk about inclusion and including that diverse point of view and that diverse perspective, we also really need to be clear about the fact that we should listen to that person. We should hear what they have to say, and we should include it as part of our mosaic that makes up those investment decisions.”
Research from the Harvard Business Review Leaders highlights critical benefits: Inclusion helps account for a difference of up to 70 percentage points in employees’ experience of belongingness and psychological safety. The research credits leaders who are skilled at being inclusive with, “A 17% increase in team performance, a 20% increase in decision-making quality, and a 29% increase in team collaboration.” Over the long term, the research suggests inclusive leaders also reduce employee attrition risk by 76%.3
Leverage mentorship for growth
Mentorship is not only a cornerstone for career development, but also an essential way to allow individuals to remain authentic and unique in their professional journeys. Katrina emphasized the importance of having a diverse network of mentors and mentees. Leaders should establish structured and goal-oriented mentorship programs that provide guidance, while also encouraging mentees to take charge of their own development. To do this, she recommends setting clear expectations and ensuring that mentees take ownership of tasks, such as scheduling meetings, preparing agendas and following up on action items.
By fostering an environment where mentees do not need to assimilate to one style but can bring their true selves and hone their natural talent as they develop, organizations can benefit from the unique perspectives and contributions that each individual has to offer.
“I ensure each mentee schedules time with me, comes prepared with an agenda and takes ownership of their development.
McKinsey research underscores the importance of supporting the efforts of individuals who help to advance inclusive practices throughout an organization, but who may not have a high profile. Offering mentorship is one way that companies can encourage development for emerging leaders.4
Understand the difference between mentorship and sponsorship
Mentorship involves providing counsel and wisdom, whereas sponsorship is centered on championing an individual’s professional growth. It is important for leaders to sponsor a variety of individuals through showcasing their accomplishments and competencies to senior management. These efforts help to increase their profile and open avenues for career progression. Additionally, it is vital for mentees to consistently present their successes to their mentors and sponsors. Advocates need to know about these milestones to effectively support and promote the mentee.
“When you talk to sponsors, you want to make sure that they’re aware of skills that obviously you have as part of your job, but also make them aware of skills that you are still developing. And your sponsor can raise that and say, ‘Well, she’s working on this skill that will be helpful for her in that promotion, and that’s why I think she’s ready for it.’”
Support skills-based advancement plans
Empowering employees to create their own “promotion plans” can significantly impact their career trajectory. Leaders can support such initiatives through helping team members assess their current skills, identify the skills needed for future roles and develop strategies to bridge those gaps. This proactive approach ensures that employees are prepared and confident when opportunities arise.
“I work with a lot of my mentees on doing skills-based assessment of the skills they have now, identifying the job they want in the future, the skills you need for that job, and matching and seeing where we have skills deficiency. And that template is something they can then take to their manager and say, ‘These are some of the things I’d like to develop.’”
The Future of Jobs Report by the World Economic Forum highlights the importance of ongoing skill enhancement for career progression in a rapidly changing labor market. Workers who participate in upskilling and reskilling initiatives are more likely to be considered for higher positions.
Embrace DEI in your organization
Katrina Dudley’s insights provide a roadmap for leaders to create more inclusive and equitable workplaces. By following the actionable steps she outlines, leaders can foster a culture where diverse talents are not only present in the firm, but an active ingredient in the organization’s success.
I encourage you to make DEI a cornerstone of your organizational culture, ensuring that all team members have a seat at the table and a voice in the conversation. Together, we can build a more inclusive and equitable future for the financial services industry.
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1. Source: Hunt, Vivian; Dixon-Fyle, Sundiatu; Huber, Celia; del Mar Martinez Marquez, Maria; Prince, Sara; and Thomas, Ashley. “Diversity matters even more: The case for holistic impact.” McKinsey & Company. December 5, 2023.
2. Source: “What Makes an Inclusive Leader?” Harvard Business Review. September 27, 2023.
3. Ibid.
4. Source: Hunt, Vivian; Dixon-Fyle, Sundiatu; Huber, Celia; del Mar Martinez Marquez, Maria; Prince, Sara; and Thomas, Ashley. “Diversity matters even more: The case for holistic impact.” McKinsey & Company. December 5, 2023.
