You're a Private Equity firm looking to build a diverse and inclusive team. How do you start?
Diversity and inclusion are not only ethical and social goals, but also strategic and competitive advantages for any business, especially in the private equity (PE) industry. PE firms rely on finding, acquiring, and improving undervalued or underperforming companies, which requires a diverse and inclusive team that can generate innovative ideas, access diverse markets, and leverage diverse perspectives. However, the PE industry is still largely dominated by white males, and faces many challenges and barriers to building a more diverse and inclusive team. How do you start?
The first step to building a diverse and inclusive team is to assess your current situation and identify your strengths, weaknesses, opportunities, and threats. You need to collect and analyze data on the demographics, backgrounds, experiences, and opinions of your existing team members, as well as your portfolio companies, clients, and partners. You also need to evaluate your culture, policies, processes, and practices, and how they support or hinder diversity and inclusion. This will help you understand where you are, where you want to be, and what gaps you need to close.
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Kirsty Garrett
Managing Director @ Standard Chartered Bank | Investment Banking Expert
It is an interesting conundrum - the academic literature is clear that teams with more diverse perspectives deliver different outcomes. Focusing on D&I is a good way to focus the minds of your senior executives on ensuring that they are creating a culture where different experiences and opinions are valued. In a relatively small organisation (as most PE firms are), it is important to focus on the end-game - better decisions and ultimately better returns - to ensure the right focus on D&I (for the right reasons). Collecting data is the obvious first step - but really understanding why you are doing this is almost more important, to ensure the right decisions further through the process.
The next step is to set your goals and strategy for diversity and inclusion, based on your assessment and your vision. You need to define what diversity and inclusion mean for your firm, and how they align with your mission, values, and objectives. You also need to set specific, measurable, achievable, relevant, and time-bound (SMART) goals for improving diversity and inclusion across different dimensions, such as gender, race, ethnicity, age, disability, sexual orientation, and more. Moreover, you need to develop a clear and coherent strategy for achieving your goals, which should include actions, resources, responsibilities, and indicators.
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Annabel Weeden
Talent disruptor, Connector, and Advocate. CEO of Talent M.
In my experience hiring diverse teams requires buy-in from all stakeholders in the process. This starts with asking 'What If we hired differently?' This leads you to a brainstorming activity where you start to 'riff' the options available. With a greater breadth of candidates across the spectrum of options.....you will bring more innovative, perspectives and styles to the SLT. By working through profiles that might add value - all stakeholders will then start to buy-in. Then of course you need to work with the best Exec Search partner possible - probably the one who's helped your reach this point!
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Kirsty Garrett
Managing Director @ Standard Chartered Bank | Investment Banking Expert
Within any organisation, it is important to set goals. But it is important that these are not merely tokenistic - or viewed as an end in themself. The objective is to reach better outcomes through a more diverse and inclusive environment. Keeping focused on this, whilst setting interim targets to make progress, is key to the ultimate end-goal here.
The third step is to engage your stakeholders, both internal and external, in your diversity and inclusion efforts. You need to communicate your goals and strategy to your team members, and solicit their feedback, input, and support. You also need to involve them in implementing and monitoring your actions, and recognize and reward their contributions. Additionally, you need to reach out to your portfolio companies, clients, and partners, and share your vision and values for diversity and inclusion. You also need to collaborate with them on creating and promoting more diverse and inclusive opportunities and practices.
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Kirsty Garrett
Managing Director @ Standard Chartered Bank | Investment Banking Expert
Publicity around your goals is an important means to hold yourself accountable. But more important in building a truly diverse and inclusive culture is to celebrate your internal talent and successes. Ensure that you are recognising the contributions of everyone in your organisation (and in the case of PE, in your portfolio companies) - call out the success stories and encourage a culture of learning from others. The rest will start to follow...
The fourth step is to recruit and retain diverse talent for your firm, which is one of the most critical and challenging aspects of building a diverse and inclusive team. You need to diversify your sourcing channels and methods, and attract candidates from different backgrounds, experiences, and perspectives. You also need to ensure that your hiring process is fair, transparent, and unbiased, and that you assess candidates based on their potential and fit. Furthermore, you need to create and foster an inclusive culture and environment for your team members, where they feel valued, respected, and empowered. You also need to provide them with opportunities for learning, development, and advancement.
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Kirsty Garrett
Managing Director @ Standard Chartered Bank | Investment Banking Expert
I have found the most successful way to drive diversity in recruitment rounds is to ensure that all hiring managers think about the specific skills they have already in the team and where there may be gaps. It is very easy to hire "people like me", and often they can individually be very successful, so it is easy to fall into the trap of believing that drives success. However, by being mindful of the things the hiring manager and existing team do not do so well, and consciously hiring to fill those gaps, often drives diversity on its own merits. Try it - you may be very surprised by the results!
The fifth step is to nurture a learning culture for your firm, where diversity and inclusion are embedded in your everyday operations and decisions. You need to provide your team members with ongoing training and education on diversity and inclusion, and encourage them to develop their awareness, knowledge, and skills. You also need to facilitate and support dialogue and exchange among your team members, and promote a culture of feedback, collaboration, and innovation. Moreover, you need to measure and evaluate your progress and impact on diversity and inclusion, and celebrate your achievements and learn from your challenges.
The sixth and final step is to seek external support for your diversity and inclusion efforts, from experts, peers, and allies. You need to leverage the expertise and resources of diversity and inclusion consultants, coaches, and trainers, who can help you design, implement, and improve your diversity and inclusion initiatives. You also need to network and benchmark with other PE firms and industry associations, who can share their best practices, insights, and experiences. Furthermore, you need to partner and ally with other organizations and movements, who can amplify your voice and influence on diversity and inclusion.
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Kelsey Cole 🔮 Dodaro
✨ I help people fall in love with the future.
Don’t approach it like a box to be checked off. These are human beings — not just quilts in the tapestry of your organization. Why are you doing this? Is it due to outside pressure, or was it born out of reflection for change? There’s nothing worse than knowing you’re the token female in the room so the org has a woman on their website just to show DEI. If you’re going to be diverse, you have to live and breathe those values everyday. Make room at the table and be ready to give that hire a real voice — not a script you’ve written for them for a character you think the market wants you to create. Really reflect and think about your opportunities in the market, and how the right perspective could lead to growth. 🚀
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