With the resignations of senior female leaders and a widening gender pay gap, Goldman Sachs’ recent history shows that a quota-driven approach to the promotion of women cannot succeed, writes chief executive of AM Bank and leadership consultant Dr Nahla Khaddage Bou-Diab.
At an initial glance, diversity, equity and inclusion (DEI) initiatives might seem good for the workplace: they level out representation, ensuring perspectives, backgrounds and cultures are all present within any given firm. For the uninitiated, these programmes seem to modernise organisations, moving them away from the outdated, arcane structures that have remained in place for decades.
I’d be inclined to agree with UK business secretary Kemi Badenoch, who has said that DEI has just become another commodity for agencies to sell”
Unfortunately, this is not the case. They’re damaging and need to be re-evaluated. At its core, DEI is synonymous with quotas. And, anytime you impose a metric – another metric, that is – you’re simply placing another barrier that talented staff have to confront.
For women, this is incredibly challenging. After all, no matter their credentials, experience, or qualifications, women already face an uphill battle: organisations have ultimately not been designed for them, but for men. The day they step foot into an office, women are immediately thrown into environments that will constantly try to hold them back. They enter survival mode.
So, when you have quotas in place, figures and percentages to view your people by, that can influence the cohesion and the culture of your organisation. But perhaps even worse, it can also affect retention.
Staff who might not feel valued will be turned off and head quickly for the door.
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Recently, Goldman Sachs has learned this the hard way. When David Solomon ascended to the CEO throne in 2018, he pledged to prioritise the promotion of women through the ranks. Unfortunately, the company’s quota-driven mindset hasn’t quite worked out.
Stephanie Cohen, the bank’s former chief strategy officer, and Beth Hammack, former co-head of its global financing group, are among several top women who have recently left or are leaving Goldman Sachs. In fact, as the Wall Street Journal reports, two-thirds of the women who held the title of partner at the bank in 2018 have either left the firm or no longer have the title.
It can be argued that the use of quotas has ultimately ended in an executive exodus. On top of this, recently released figures have shown the company’s gender pay gap widening instead of narrowing, which reflects the lack of women in senior positions.
Of course, none of this benefits Goldman Sachs’ organisational reputation: the fact that such a prominent, well-resourced company can’t figure out how to retain female talent could see it being bombarded with accusations around its culture.
The situation is ironic: as Goldman has learned, diversity quotas don’t level out the playing field; they can turn off staff. In fact, to go a tad further, I’d be inclined to agree with UK business secretary Kemi Badenoch, who has said that DEI has just become another commodity for agencies to sell, diluting the true purpose of these initiatives with ineffective and baseless training.
Here’s the truth: the only way to truly form a diverse, equal, and inclusive organisation is by fundamentally transforming your culture. It’s a must. Culture is the backbone of your organisation and a key pillar of company success – to tackle the problem of DEI, you must address the roots of your firm.
Of course, as I recognise in my new book A Leadership Shift, this is by no means an easy task. It takes a concerted effort from the leadership teams, not HR, to re-evaluate their view of culture – and establish a methodology that values their people as humans, not titles or salaries.
Leadership teams need to take the reins and spearhead cultural turnarounds – an incredibly difficult task for firms across financial services and tech”
Diversity cannot be improved through superficial programmes, which will only scratch the surface of what is a fundamental, foundational issue across global corps.
Leadership teams need to take the reins and spearhead cultural turnarounds – an incredibly difficult task for firms across financial services and tech, who have a long way to go. Such businesses need to implement honesty and transparency throughout the organisational structure. One way to do this might be to adopt flatter structures to replace their internal hierarchies, but there’s no one-size-fits-all approach.
Culture has massive human potential. Beyond the corporate benefits of increased efficiency, collaboration, productivity, and retention, a thriving culture can generate a sense of belonging for individual workers.
But for that to happen, to even make the first headway on this process, DEI quotas have to go. They’re counterproductive and miss the point.
Company culture is ground zero for organisational reform. If you’re really serious about creating a diverse and inclusive workplace, tackle the root.
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