Lehman Brothers is a global investment bank with a history going back to the US in the 1840s. The company employs more than 20,000 people worldwide of which 4,100 work across Europe. The company is structured into four main businesses: equities, fixed income, investment banking and investment management.
Both Joseph Gregory – president and chief operating officer based in New York – and Jeremy Isaacs – chief executive, Europe and Asia – began championing diversity at Lehman Brothers at the start of this millennium. Isaacs approached the head of HR to identify a practical way forward on this agenda for Europe and to ensure the work matched US initiatives.
They concluded that diversity required a full-time post and Fleur Bothwick was appointed as European director of diversity in September 2003.
A series of focus groups was run by Helen Turnbull, a consultant with Florida-based company Human Facets. These focus groups looked at diversity from the perspectives of gender, ethnicity, continental Europeans, expatriate staff, working parents and white men. In each case, members of the focus groups were asked to identify the most important issues affecting their work at Lehman Brothers and areas of contention which needed to be addressed.
“Conducting the research gave us a clear picture of employees’ views,” says Bothwick. “The fact that we used a third party gave credibility and structure to the findings. The final report provided the catalyst for going further.”
Rejecting the idea of setting up a number of network groups around the company, the issue was addressed as a leadership matter. The head of each company division was then asked to define diversity for their area of responsibility, to identify specific challenges with regard to the diversity agenda, and to draw up a business plan to move forward over the next 12 to 18 months. This agenda was discussed alongside the division’s overall business plan, ensuring the initiative was put in the mainstream from the outset.
A European diversity steering committee was established and it continues to meet once a month to discuss progress and deal with issues wherever they arise in the company. The committee is made up of two or three representatives from each division, and they feed into working groups in each division. In this way, Lehman Brothers has created an infrastructure which ensures diversity is addressed at every level of the organisation throughout every activity.
“Our approach was based on creating a programme that could be embedded in the organisation and would be sustainable,” says Bothwick. “It has to be part of the fabric of the firm and what people do on a day-to-day basis.”
In the past 18 months the steering committee has seen the appointment of disability, gay and lesbian champions, joining the established race and gender champions.
Diversity has become an everyday part of Lehman Brothers’ operations. While there is still work to be done, Bothwick notes that requests for flexible working are virtually always accepted and company management reports are now broken down by ethnicity and gender as a matter of course rather than requiring a special request.
“We continue to talk about measurement – what we should be measuring and what success looks like,” says Bothwick. “We are not focusing on hiring quotas but we do look at year-on-year comparisons in our demographics.”
The company runs an annual global attitude survey which includes questions to track progress on diversity objectives. In 2004 the company won the Opportunity Now City Focus Group Award for creating an initiative that realises the economic potential and business benefits of women working in London.
Sridhar Bearelly is the co-head of CDOs/structured credit at Lehman Brothers in Europe and one of the steering committee representatives from the fixed income division. “Being part of the steering committee can be time consuming, but it’s been worthwhile because it has transformed the way diversity is approached,” he says.
Bearelly recently became a father and took two weeks’ fully paid paternity leave. “In finance it’s very easy to become obsessed with achieving revenue targets,” he says. “People are now much more aware of diversity and there’s more of a community feeling in the workplace.
“Senior management has been actively involved in supporting and understanding how diversity benefits our workforce and business, so it feels like there’s no glass ceiling – no potential barrier to stop you being promoted or developing a successful career in the company.”
Learning points for HR
“You cannot over-communicate on diversity,” says Bothwick. “In our first year, we made great strides in implementing new initiatives, but still people wanted more information.”
She also notes the importance of tracking and monitoring progress on diversity throughout the year. There were a few mad panics when the end-of-year review approached and the company now runs a mid-year diversity review which involves the global heads of divisions.
The kind of impact delivered across Lehman Brothers was only achievable through the inclusion of senior executives and division heads at every stage in the process. This was crucial since it was agreed early on that diversity would mean something different for each division.
“You can’t rely on a small group of people to do this,” says Bothwick. “If you have only one person championing this, it is not enough. You need to take every opportunity to get people engaged. The more people are involved, the more sustained the work will be.”