Improving Your ‘Inclusion Index’

WASHINGTON–What is the difference between “diversity” and “inclusion?”

It’s one thing to have a diverse workforce, says Erin Zolna, member of the leadership and succession sector with Russell Reynolds Associates, New York. It’s another thing, she said here at the recent MBA Diversity & Inclusion Summit, to unleash its power within an inclusive culture.

Inclusion, Zolna said, is establishment of an environment that creates opportunities for all employees to realize their unique potential, thereby improving the success of the company.

“A focus on inclusion does not mean less focus on diversity,” Zolna said.

“The times are changing,” said Gary Hayes, member of the leadership and succession sector with Russell Reynolds. “In 2016, 38 percent of homeowners were from diverse backgrounds. By 2060, that figure will jump to 56 percent. This has enormous implications for how the mortgage industry approaches how it lends and services loans.”

Russell Reynolds research found despite this increase in diversity and recognition of such, the real estate finance industry continues to lag in improving its diversity and inclusion efforts–particularly at the senior levels of lender/servicer organizations. While the entry level for females, for example, is at nearly 50 percent of new employees, the rise to senior level is much slower, to just 20 percent.

“There is recognition that as homeowner demographics change, the banking industry has to change to reflect its customer base,” Zolna said. “But progress is slow, despite a lot of great efforts at some companies. There is a ways to go, but the industry is making some progress.”

The way to drive change, Zolna is said, is by making diversity and inclusion as a business case. “When you have more diverse teams, you improve company performance,” she said. “It improves creativity and decision-making–it’s not ‘groupthink”…it reflects unconventional approaches to decisions that are more responsive to customers and improvement of the bottom line.”

With diversity, Zolna added, “you have a greater pool of candidates that reflect and serve the marketplace.”

Hayes noted that a more diverse organization “can only improve your knowledge about the marketplace and enhance your response to real market factors.” He said it also enhances the company’s reputation and image and helps as a retention tool. “Lack of diversity creates a more disruptive environment,” he said.

So, how to make the transition to “inclusion?” Zolna said retention is a key barometer of measuring inclusion. “Strategies that change the culture have a tremendous impact on achieving that outcome,” she said. “A culture in which different values are heard and respected creates a more inclusive environment. Employers that ‘walk the walk and talk the talk’ are noted and appreciated by employees.”

“It takes people to get this done,” Hayes said. “A smart approach to leadership development is a sound strategy.” He said it results in leaders who encourage employees to speak up, to empower them to make decision, give actionable feedback, share credit for team success and make it “safe” to propose novel ideas.

“Isn’t that what we want anyway in a company environment?” Hayes asked.