Bias Interrupters—Intentionally Disrupting the Status Quo to Create Inclusive and Well Workplaces

High-performing organisations recognise that the aim of diversity is not solely to measure diversity, but to cultivate inclusive leaders and inclusive organisational cultures (Deloitte, 2014). Such organisations must examine how their leaders embrace new ideas and accommodate different styles of thinking, how more flexible work environments can be created, whether existing organisational processes enable successful human connection and collaboration, as well as the shadows different leaders cast across the organisational culture. More organisations are recognising the urgency of leveraging diverse talent through inclusive leadership as a business imperative (Future Inc, 2015; Herring, 2009). Inclusive leaders are keenly aware that personal biases can narrow their vision and impact on objective decision-making. Since the global financial crisis, there is an increasing spotlight on homogeneous boards and leadership teams, and the need to be more diverse to ensure better decisions resistant to groupthink (Daley, McGannon and Ginnivan, 2012). Deloitte defines the difference between highly inclusive leaders and less adapted leaders as a mindset that places importance on the insights of others, on empowering individuals, as well as empowering the thinking of diverse groups to cultivate different perspectives and voices in the decision-making process (Deloitte, 2016).

Seventy-five per cent of executives identify innovation as a top three priority. The key skill identified for ‘breakthrough’ innovators is a leader’s/manager’s ability to cast a wide net for ideas (McKinsey Quarterly, 2015; 2018) or to create more inclusive channels for diversity of thought to surface. Australian workers who identify as working in inclusive teams are 10 times more likely to be highly effective than workers in non-inclusive teams and are nine times more likely to innovate (DCA, 2018). Despite these promising reports on the state of inclusion in Australia, progress has slowed in achieving gender equity (AICD, 2017). Women represent 26 per cent of the make-up of ASX 200 boards. Specifically, in the Australian finance industry, women comprise 55 per cent of all employees, though hold only 8 per cent of CEO roles (compared to 16% average for all industries), and 28 per cent of key management roles. In the emerging industry of Fintech, nine in 10 Australian leaders are male (Ernst & Young, 2017). Yet when asked in the FINSIA 2014 survey whether women are well represented at senior levels in their organisation, 72 per cent of men respondents agree that they are. Despite this perception gap, organisations are investing significantly to achieve gender equity progress. However, many find it challenging to accurately identify barriers and to measure those initiatives most effective in driving change. Dismantling gendered organisations is long overdue, not only for women being held back, but also for men who do not accept that stereotypical masculine workplaces should be the standard for all (Fox, 2010; Fox, 2017).

A gender division of labour is pronounced in Australia, and there are deep and subtle gendered expectations in relation to work and leadership (Due Billing, 1994; Probert, 2002). Acker (1990) disrupted existing research on organisational theory by stating that our societies are gendered, and that this is implicitly reflected in our organisations. This is evidenced by women lagging behind at both the top and the bottom of the employment pyramid in terms of pay and authority, despite women outperforming men in educational attainment in many countries. Acker demonstrates how gender differences in organisational behaviour and outcomes are impacted by structural, cultural, interpersonal and personal characteristics. Ackers’ theory of gendered organisations (1990) purports that gender inequality is built into organisations that value and reward employee loyalty through jobs that are characterised by long-term security, career pathways, job descriptions and management evaluations (Reger, 2016). Newer research by Williams, Muller and Kilanski (2012) and Williams (2014) shows that gendered organisations are perpetuated despite the disruption of the ‘new economy’ marked by job insecurity, teamwork, career maps, and networking. Addressing gender inequity requires a holistic, strategic approach focused on addressing all four workplace dimensions—structural, cultural, interpersonal and personal.

Organisations have traditionally focused on the personal dimension—addressing simplistic solutions to ‘fixing the women’ by focusing on women’s perceived lack of confidence by providing women-only events, women industry awards or women mentoring programs. Many organisations seek to raise awareness by showcasing female role models and by participating in the Telstra Business awards and other, industry-specific awards such as the Women in Financial Services Awards and the Female Excellence in Advice Awards. There is no supporting research that these events or awards change gender equity statistics. For example, a 2010 World Economic Forum report on corporate practices for gender diversity in 20 countries showed that almost 60 per cent of companies offered mentoring. Further research supports women mentoring women as significantly more important for the progression of women managers (Ragins and McFarlin, 1990; Ragins and Scandura, 1994; Tharenou, 2005), though with few women financial planner role models, a perpetual cycle of female underrepresentation is potentially created. More recent research (Ibarra, Carter and Silva, 2010) shows that while mentoring relationships are important, they are not leading to nearly as many promotions for women as for men. There is a multitude of literature to substantiate women’s apparent lack of confidence with women failing to apply for jobs or promotions. Quoted in Sheryl Sandberg’s Lean In (2013), Russ Harris’s The Confidence Gap (2011), McKinsey Quarterly (2014), Kay and Shipman (2014) and many other sources is the Hewlett Packard research that women apply for jobs or promotions only when they are confident they have met 100 per cent of the qualifications, whereas men apply when they think they can meet 60 per cent of the job requirements. Even though the Hewlett Packard research is referred to often, there is no readily identifiable, published source for the Hewlett Packard research.

Counter arguments have since emerged, arguing that confidence is a self-concept that is not gendered. There are both overconfident and unconfident men and women in the workplace. There is research to show that most men are overconfident of possessing the skills and qualifications required to apply for jobs (Taris and Bok, 1998). Women are confident about their own abilities to become top managers but, once hired, are much less confident that their company cultures will support them (McKinsey Quarterly, 2014). The McKinsey research found that an organisation’s culture is more than twice as likely to impact women reaching leadership roles. Bain & Company reported that 43 per cent of women are confident that they can reach top management positions at the outset of their careers contrasted with only 34 per cent of men sharing that same goal. Two years into the job, women’s confidence in their careers goals plummets to 16 per cent while men stay steady at 34 per cent. Australian women are twice as likely as men to receive feedback indicating they need to show ‘more confidence’ to be ready for promotion yet are often criticised for being too assertive (Sanders et al., 2017;2016; Eccles, 1987). Using data about the confidence levels and promotions pathways of 7,500 working men and women, recent research shows that while more confident men get a 3.3 per cent boost to their job promotion prospects, there is no such boost for highly confident women (Risse, et al. 2017). There is little actual payoff for women in ‘getting more confident’ at work. These studies find that women’s confidence is intrinsically linked to a lack of support by management and rigid stereotypes of success within the company.

Acker debated that gender inequity is insidious because it is embedded into the structure of organisations, suggesting an inherent preference for men workers and indicating that employers preferred to hire, reward and promote employees with 24/7 availability and few distractions outside of work. This reveals an implicit assumption that the ‘ideal worker’ is a man (Acker 1990; Williams 2001).

Stereotypes of women and leadership are impacted by the effects of a society′s culture on the values of its members (OECD, 2014, 2016, 2018), and how these cultural values relate to behaviour. Australia is considered to be a masculine culture (Hofstede, 2011) with a preference for “achievement, heroism, assertiveness and material success”, subtly impacting the preferred style or stereotype of leadership. Behaviours associated with leadership such as assertive, authoritative, and dominant behaviours are frequently deemed less attractive in women (Eagly and Carli, 2007; Cejka and Eagly, 1999). Known as the double bind, women are compared to the dominant ‘masculine’ standard of leadership, irrespective of leadership performance (Catalyst, 2007). ‘Think leader think male’ bias has been shown where traits typically associated with leaders—forceful, dominant, strong, competent—are stereotypically associated with men, in turn overruling actual merit, as merit is subjective and prone to bias. Research by Schein, et al. (1996) found that both men and women perceive successful middle managers possessing characteristics, attitudes and temperaments more commonly ascribed to men in general than to women. The bias of men and leadership/women and nurturing continues to permeate workplaces, despite the majority of neuroscientific studies finding minimal difference in people in how they think and behave. Most gender differences arise within social, cultural and personal environments (Fine, 2010).

A recent study concluded Australia has a significantly stronger male breadwinner culture compared to other countries, including the US (Baxter and Hewitt, 2013), aligning with Elizabeth Broderick’s views— Australia’s former Sex Discrimination Commissioner—that deeply held beliefs in Australia perpetuate stereotypes and greatly impact women’s workforce participation. The two deeply held beliefs impacting gender equity progress in Australia are that a good mother stays home with her children, and that a serious worker is available 24/7 and has no obvious family commitments. Australian workplaces mirror the male breadwinner/female caregiver model with noticeably absent women CEOs (Crabb, 2015), and fewer men taking parental leave compared to women.

An Ernst & Young global survey (2016) found most business leaders believe they are making good progress toward gender parity in the longer term; however, only 13 per cent anticipate significant improvements in the next five years. Many men CEOs in Australia form part of the Male Champions of Change (MCC) in either state or national representation—a coalition formed by Australia’s former Sex Discrimination Commissioner, Elizabeth Broderick, in 2013. The MCC aims to use individual and collective influence and commitment to ensure the issue of gender equity in leadership is progressed along the national business agenda. While there is agreement that men stepping up to make change is a powerful signal to other men, research has revealed that women executives are penalised for advocating for other women to fulfil management potential, creating concern that senior and powerful women leaders may be abdicating their responsibility to advocate loudly (Hekman, et al., 2016). This research also shows that when women value I&D, they violate the expectation that, as minorities, they will play a supporting rather than a leading role. It is critical that I&D be led from the top, inclusive of both men and women leaders. In many financial organisations, leaders are ‘talking the talk’, but many women are not experiencing ‘the walk’. In the January 2017 New Yorker edition, various examples of interpersonal conflict and sexual harassment across global, renowned finance organisations, reinforce the view that finance is a male-dominated industry and the few women who manage to enter it, and to climb its ranks, can often become the targets of some of the men who work there. Due to the increased focus on diversity, bullying and discrimination in the workplace, discrimination has become more subtle and indirect (Basford, Offermann and Behrand, 2014). Often women who express concerns about discrimination are further impacted by negative outcomes such as career stalling, resulting in shutting down complaints or, ultimately, in women leaving the organisation (Holland and Cortina, 2013). Women executives are 30 per cent more likely to leave their financial services employers mid-career—the highest rate compared to all other industries (Mercer, 2016).

Views about the abilities of women, the demands of leadership roles, assumptions about career drivers, hiring, remuneration and retention, and stereotypes about women’s and men’s capabilities are great obstacles to gender diversity progress (Fitzsimmons and Callan, 2015). Ian Narev, ex-CEO of one of Australia’s largest banks, Commonwealth Bank, believes the biggest barrier to gender equity is “unconscious bias leading to one of the biggest pitfalls for leaders” (5050 Foundation, 2013). There is overwhelming evidence that there are no genuine differences in capability between genders, but the perpetuation of this idea of difference continues to hold women back, specifically in leadership roles (Kandola and Kandola, 2013, Ross, 2008). Where men dominate senior levels of management, as well as boards of directors, there is a tendency— known as affinity bias—for these men to select males similar to themselves (Reskin and McBrier, 2000; Tharenou, 1999). Affinity bias occurs when we gravitate to people like us because it creates a sense of familiarity and comfort and is most often at play in the hiring process—when hiring managers implicitly hire in the image of themselves. Affinity bias also has the potential to impact many other aspects, including who gets promoted, who is seen as the go-to person, and who is assigned high-profile assignments. Johnson, Brimble and Zanetti, (2016) found that the most common recruitment pathway into Australian financial planning careers—almost 30 per cent of all hires—was through personal networks. This over-reliance on personal networks for recruiting new hires impacts organisational cultures with the potential to perpetuate affinity bias, as well as groupthink—where group members closely align with one another thus insulating themselves from outside opinion and reinforcing viewpoints they already share. This can result in poor decision-making as the objective becomes gaining consensus, or perhaps the mistaken belief that if everybody in the room agrees, it must be right (Malmo, 2018). Former board member of Citigroup, Sallie Krawcheck, states “had we had more diversity of thought, perspective, education, gender, colour, the financial crisis would have been less severe.” Group members attempt to minimise conflict by actively suppressing dissenting viewpoints and isolating viewpoints from outside influences. Lack of diversity is identified as one of the antecedent conditions of groupthink (Beecher-Monas, 2007). Groupthink, in particular, was identified in the Nyberg Report as a contributing factor to the financial crisis in Ireland. Driving for consensus can create an echo chamber, silencing alternative viewpoints. A culture of groupthink prevented the International Monetary Fund from grasping the risks behind the global financial meltdown, according to an internal report. Chairman of Anglo American, Sir John Parker, states “a mix of skills and backgrounds is a real bulwark against the destruction of shareholder value. In diverse groups, someone is going to ask the unthinkable question.” David Gonski, Chairman of the Australia and New Zealand Banking Group, on why gender equity initiatives are resisted, states “I think it is easier for everyone to go along with the norms of today than it is to challenge them.” Many Australian organisations conduct mandatory unconscious bias training programs with minimal measurement of the behavioural and attitudinal change as part of the outcomes of the return on investment for this spend (Dobbins and Kalev, 2016; Bohnet, 2016; CDO Insights, 2008; Hiscox, 2017).

Women determine 89 per cent of decisions on bank accounts, own 40 per cent of stocks, yet 84 per cent of women do not feel understood by financial planners and investment marketers (Silverstein and Sayre, 2009). The I&D audit process and bias interrupters can be widely implemented across the Australian financial planning profession to disrupt gender inequity. The six bias interrupters discussed in this paper have significant and specific application to the financial planning industry, especially in relation to its efforts to increase women from the current 1:5 financial planner ratio. A bias interrupter that many large Australian companies have signed up to is setting 50:50 graduate gender equity targets, based on the principle of what gets measured in business gets done.

Common biases on why there are fewer women financial planners in the workforce default to overreliance on the personal dimension—views centred around perceptions that finance is the domain of men, and that the financial planning workforce purely reflects the wider demographic. Graduate statistics state otherwise. Over half of all management and commerce Australian graduates were women at 50.14 per cent (Department of Education, Employment and Workplace Relations, 2009). The finance planning industry can uniformly apply the 50:50 graduate structural bias interrupter with commitment from the leadership team to measure progress, with commitment from business leaders, as well as from HR to design and fund undergraduate programs to showcase and promote financial planning as an exciting career for both men and women.

A scan of the Australian job search engine seek.com.au using the search terms ‘financial planner’ results in a mix of gendered language with some job descriptions using gendered wording such as ‘dominate the marketplace’, and ‘aggressively meet targets’ and ‘join a young, dynamic and hungry team’ and ‘great role for a hungry financial planner’ and ‘role for a hunter’ and ‘for a driven individual’ and ‘get skin in the game’. Research shows that irrespective of skills matches, although some women will identify with these terms, many women will eliminate themselves from applying for jobs due to job description cues that imply male-dominated culture. Firms need to forensically examine both qualitative and quantitative data from applicants, previous hires, HR, recruiters and recruitment suppliers to understand at what point of the recruitment process does inequity surface (Askehave and Zethsen, 2014). Quantitative data provides an understanding of the structural dimension and barriers to hiring women. Qualitative data provides an insight into the cultural, interpersonal and personal dimensions to understand the barriers in hiring. Without this baseline, myths continue to perpetuate and the Personal dimension assumes a greater significance as to why women are not applying for financial planning roles. Further industry research is required to understand the drivers and barriers for women entering and succeeding in financial planning, and the creation of industry bias interrupters to address these inequities.

The pay gap bias interrupters provided in this paper have particular application to the financial planning industry which has the largest industry pay gap in Australia of 32 per cent. Companies in the Financial and Insurance services sector have reduced the gender pay gap in total remuneration progressively over three years from 35 per cent in 2015 to 32 per cent in 2017; however, many financial planning organisations have not begun gender pay equity reviews (5050 Foundation, 2018). Organisations and managers do not deliberately set out to pay men and women differently, for the Workplace Relations Act 1996 requires employers to accord male and female employees equal remuneration for work of equal value (Workplace Relations Act, 1996). However, there is much room for bias when promotion and remuneration bonuses are determined at managerial discretion with minimal transparency (Johnson, Brimble and Zanetti, 2016). The initial baseline to understanding pay gaps is a critical beginning, as outlined in the AECOM and Virgin Money case studies, to establishing the numerous causes for pay gaps. Rather than default to the personal dimension bias that women are inept at negotiating competitive remuneration, AECOM and Virgin Money identified the specific data points impacting pay gaps and created structural bias interrupters to increase transparency with real time data. AECOM also created a cultural bias interrupter to change the culture of leaving women out of salary reviews when on parental leave. Whilst the Australian Government echoes the German Government in requiring firms to regularly publish reports on actions taken to promote gender equality, the Australian Government could do much more to implement the German Government’s bias interrupters to create transparency at a national level, enabling employees freedom of information to request median remuneration based on at least six colleagues of the opposite sex in a comparable or equivalent role. This would not only impact pay gaps within the financial planning industry but pay gaps for all industries in Australia.

Bias interrupters have advantages over cultural change programs which, while effective, are expensive, resource heavy, and often abandoned. Bias interrupters fundamentally require leadership support for execution and accountability, measurement to understand the baseline of where bias exists, tailored interventions underpinned by the business strategy, and transparency on progress. There are three key recommendations for implementing I&D audits and bias interrupters:

Every member of the financial advice industry has the potential to implement sustainable change and facilitate inclusion. However, taking a strategic approach must come from Australian business leaders driving sustained, holistic leadership on gender diversity. The implementation of I&D bias interrupters does not work when there is no clear, compelling communication from the top on why I&D is critical to the business, and why it leads to better decision-making processes. Real change cannot happen without a commitment from the top because that’s where people take their cues. Andrew Stevens, IBM Australia’s former CEO, stated publicly that 50 per cent of his performance bonus was committed to achieving gender diversity targets. KPIs were spread across the management team to ensure accountability for achieving gender diversity progress. Action occurs for gender diversity when specific measurable objectives are set for the leaders to execute against and, specifically, when meeting these objectives are linked to performance and at-risk remuneration (Whelan and Wood, 2012).

Measuring I&D and gender diversity progress for any organisation can look like a simple task at the outset, counting men and women and comparing the count with the demographics of the community the organisation serves. Counting people does not automatically translate into making people count—or into an inclusive organisation where ideas and contributions are heard and valued. Deloitte has found that, historically in Australia, there has been an under-emphasis on inclusion and accountability, and an over-emphasis on diversity (Deloitte, 2018). Critical to establishing a baseline is the I&D audit, using data to pinpoint leaks in the talent life cycle from recruitment to retirement, including inclusion experience data. Benchmarking and leveraging top-down and bottom-up data all feed into achievable, measurable I&D objectives to continually measure progress.

Bias interrupters do not advocate a scattergun approach or a programmatic approach, but rather are tied to an I&D strategy that explicitly defines how each bias interrupter will input into driving the overarching business growth strategy. Many Australian organisations have disconnected, ad hoc initiatives that do not lead to sustained change. I&D objectives are not effective when they are not tied to a strategic vision, governance or accountability for achieving them. Bias interrupters are not one-size-fits-all solutions; they require tailoring to the business unit or region according to the baseline audit of where bias occurs.