6 key traits of inclusive leadership

Diversity is good for business. A recent McKinsey study found that companies ranked in the top quartile for both gender and ethnic diversity among executive teams were 9% more likely to financially outperform their industry peers, while those in the bottom quartile were 66% less likely to outperform their peers.¹

Diversity comes in many forms—cultural and racial backgrounds, age and gender, as well as life experiences. Cultivating an inclusive culture that brings so many different kinds of people together takes intention, but it's worth it. A thoughtful and inclusive approach to managing talent and working with clients can bring new opportunities to grow your firm—now and in the future. To get started building an inclusive firm, consider these six qualities of inclusive leadership.² Each one includes questions that can help you keep making progress.

Commit to inclusivity

An inclusive team culture doesn't happen by accident—it takes commitment. Inclusive leaders intentionally build diverse teams, proactively make room for new ideas and different voices, look for ways to put diverse strengths to work, and set the tone by communicating a steadfast belief in the power of diversity to fuel better outcomes.

To stay consistent in your commitment to inclusivity, ask yourself:

• How can I hold myself accountable to create an inclusive team?
• Have I clearly communicated my philosophy and plan with my team?

Be courageous

Creating a more inclusive environment may require change, and that can be uncomfortable. Inclusive leaders can demonstrate courage to help employees navigate change by 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. Courageous leadership 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. To lead courageously, ask yourself:

• Have I been candid about my own questions and concerns?
• Is my "way of doing things" standing in the way of inclusion?

Recognize your own biases

Inclusive leaders recognize that they, like everyone else, have biases that may cloud their judgement or affect their ability to see the best solution. They work to counter these biases by gathering input from others to clarify their thinking before making important decisions. They also consider whether employees will view their decisions as drivers of progress. When considering your own biases, ask yourself:

• Who can help me see a different perspective?
• How might others on my team perceive this decision?

Stay curious

Curious people are often open-minded and empathetic, two great attributes of inclusive leaders. You can practice curiosity by asking questions and actively listening, without judgment. This signals to employees that you value their perspectives and recognize their contributions. To stay curious, ask yourself:

• Who can I learn from?
• What questions can I ask that can help me see new ways of doing things at the firm?

Acknowledge differences

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. To make difference a strength, ask yourself:

• Have I created an environment where people feel comfortable being themselves?
• How can I make it clear that our firm welcomes people who don't "look like" a typical advisor?

Keep collaborating

Your leadership depends on your ability to learn from and collaborate with people from diverse backgrounds so that your firm can innovate, take on new markets, and resolve complex issues. To foster a collaborative environment, ask yourself:

• Do we make room for different voices? How can I bring more people in?
• Do I ask follow-up questions that invite continued conversation, such as, "Can you tell us a bit more about why you think that?"

Through collaboration, vulnerability, and simple human curiosity, you can see biases and work to mitigate them. It takes courage and commitment, but the effort's worth it. Besides feeling good, it's one of the most effective ways a firm can drive its next stage of growth.

What you can do next

• To learn more about building diversity and inclusivity at your firm, check out RIA Talent Advantage^®, a comprehensive program that can help you recruit, develop talent, and build diversity.
• Consider a custodian that is invested in your success. Contact us to learn more about the potential benefits of a Schwab custodial relationship.