How Empathy and Competence Promote a Diverse Leadership Culture

Meaningful diversity and inclusion actions are now seen as mandatory for new generations entering the workforce.1 But the effectiveness of current measures in the finance sector falls short of these expectations. The 2021 Women in the Workplace study conducted by McKinsey and LeanIn.org found that women in North America remain dramatically underrepresented in financial services.2 In particular, women are still promoted at lower rates than men at every step of the leadership ladder, and these differences are exacerbated for Black, Asian, and Latina women.

Well-intentioned efforts focusing on recruitment, quotas, and compliance are not enough to achieve the next stage in gender equality. Prevailing workplace narratives that emphasize the constraints that separate men and women also hold back progress. If we endlessly highlight that women have had lower levels of labor market attachment, women will continue to be viewed as riskier hires for leadership roles. Meaningful change requires a culture shift — a dedicated effort to equalize opportunities so that all employees can thrive, regardless of gender.

Our experience working with organizations in the financial services sector sheds light on the importance of focusing on workplace culture. In September 2020, we conducted a study with 1,700 professionals across the financial sector to understand current attitudes and drivers that contribute to the lack of a pipeline to leadership positions for women. The survey results revealed that perceived workplace fairness is important for all employees, regardless of gender; it predicts satisfaction and lower turnover intentions. Yet there were large differences in how employees viewed their experiences and ambitions based on whether they worked in an environment with a relatively high or low share of men.

To explore how businesses can create environments that equalize opportunities for women instead of hindering productivity and creating dissatisfaction, we followed up the initial survey with 79 in-depth interviews with women across functions with high and low shares of men. They were asked to describe headwinds and tailwinds in their careers. Those in high-share roles were income generators, such as traders, investment bankers, and asset managers. Those in low-share roles worked in either compliance or communications. In analyzing their responses, 10 clear themes emerged that were then matched to actions businesses can take.