Six Key Behaviors of Inclusive Leadership
The makeup of the American population has been changing steadily in recent years, and likely to continue long into the future. Many RIA firms are recognizing the need to diversify their talent portfolio to address changing client demographics.1 Additionally, having a diverse team also helps to ensure you get the benefit of different perspectives, making it easier to see new opportunities and find creative solutions. In fact, companies ranked in the top quartile for both gender and ethnic diversity are 12% more likely to surpass their industry peers in terms of financial performance.2
Diversity comes in many forms—cultural and racial backgrounds, age and gender, as well as life experiences. Cultivating an inclusive culture that brings such different people together takes intention. To gather, listen to, and process different perspectives requires time, a resource many leaders have in short supply. But while it does require effort and commitment, taking a thoughtful and inclusive approach can bring you new opportunities to grow a firm that reflects your clients—now and in the future.
Here are six principles of inclusive leadership3 that provide a solid framework for firms that want to fully leverage the diverse thinking and experiences of their employees:
Commit to inclusivity
Creation of an inclusive team and culture doesn't happen by accident--it takes commitment. Inclusive leaders proactively make room for new ideas and different voices. They may believe that having a diverse team generally results in better outcomes. They set the tone by communicating that philosophy to the team and helping them find ways to navigate different styles to leverage their diverse strengths and perspectives.
- Ask, "How can I hold myself accountable to create an inclusive team? Have I clearly communicated my philosophy and plan with my team?"
Creating a more inclusive environment may require change, and that can be uncomfortable. Inclusive leaders demonstrate courage to help employees navigate in times of change. This courage can be demonstrated in several ways—not shying away from talking about challenges; taking a fresh look at the established way of doing things; and being open and prepared to adapt when it makes sense. It can also mean admitting when you don't have all the answers, being vulnerable, embracing humility, and creating a safe space for others to do the same.
- Ask, "Have I been candid about my own questions and concerns?"
Recognize your own biases
It's hard to see your own blind spots. Inclusive leaders recognize that they, like everyone else, have biases that may cloud their judgement, or impact their ability to see the best solution. But they work to counter biases by gathering input from others to clarify their thinking before making key decisions. They also consider whether decisions will be perceived by employees as impactful and progress-driven.
- Ask, "I may be stuck in my thinking. Does anyone have a different perspective?" "How might others on my team perceive this decision?"
Curious people are often open-minded and empathetic, two great attributes of inclusive leaders. They demonstrate curiosity by asking questions and actively listening, without judgment, signaling to employees that they value their perspectives and recognize their contributions.
- Ask, "If you were leading this firm for a day, what would you do differently? What don't I know that you think I should?"
Our cultural backgrounds, life experiences, and personalities shape our perspective. Inclusive leaders recognize those differences. They ask open-ended questions and acknowledge differences in experiences, even when it's awkward. They know that being authentic in how they handle those situations reminds everyone that they don't have to all look and think the same way to have a collaborative and successful team.
- Ask, "Have I created an environment where people feel comfortable being themselves? Have I made it clear that our firm doesn't have a rigid template of what an advisor, client service professional, or leader "looks like"?
As our industry continues to evolve, it's more important than ever to bring every voice to the table to position your firm for success. Building on each other's diverse backgrounds, experiences, and perspectives can help firms innovate, take on new markets or resolve complex issues. It's important to create an environment where individuals feel safe sharing ideas and contributing to the dialogue.
- Ask, "Do we make room for different voices? Do I ask follow up questions that invite continued conversation, such as "Can you tell us a bit more about why you think that?"
1 Independent Advisor Outlook Study, conducted for Schwab Advisor Services by Koski Research, June 2015.
2 Source: McKinsey, Diversity Wins, 2020.
3 Deloitte Insights, "The diversity and inclusion revolution: Eight powerful truths."