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Series Three, Episode Eight: Changing organisational mindsets and the advancement of talent from ethnic groups

Paul Cleal, Vice Chair of Kingston University and board member and/or advisor to The Premier League, National Citizen Service Trust and Sainsbury’s Foundation and James De Sausmarez, Head of Investment Trusts at Janus Henderson Investors, discuss changing the many false perceptions of working in the City. How can organisations facilitate the advancement of BAME employees and use their recruitment data to attract more diverse talent? Why the ‘safe’ choice isn’t always best and the importance of role models and mentors. How do changing incentives drive greater D&I and increase focus on helping middle management layers to change, and what benefit do placements and internships offer to shift more entrenched mindsets?

Paul Cleal

Paul acts as a board member or advisor to organisations on strategy, leadership and change. His current portfolio includes non-executive positions at Kingston University (independent non-executive director), FA Premier League (Equality Standard Assessment Panel member), Sainsbury’s Foundation and Centre for Social Investigation at Nuffield College Oxford (both as Advisory Board members).

Over the last 30 years Paul has worked in local and central government and for 16 years was a partner in PwC, during which he had spells on the Management Boards of the firm in both the UK and Africa (which included a secondment to Lagos, Nigeria). His leadership positions included the Government & Public Sector practice, the HR function and the Africa Business Group which he founded. During his PwC career he led numerous corporate finance and consulting assignments specialising in infrastructure and international development. He has won a number of awards for his work in diversity and was also a board member of the Social Mobility and Child Poverty Commission which advised Government ministers on those issues.

You can follow Paul on Twitter @PaulMCleal.

James De Sausmarez

James is Director and Head of Investment Trusts at Janus Henderson Investors and is a leading figure in the investment trust industry having been involved in investment trusts for over 30 years. He is responsible for all aspects of the business including the relationship between Henderson Global Investors and the Boards of the managed investment trusts, service delivery, primary and secondary sales and marketing and new business development. He is the primary product specialist for the investment trust business with a wealth of technical experience. James is a Common Councilman on the City of London Corporation, Vice-Chairman of Governors at Queenswood School, an independent girls secondary school, and a member of the Council of St Paul’s Cathedral.

You can follow Janus Henderson UK on Twitter @JHiAdvisersUK.

Series Three, Episode Eight Transcript

Julia: Hello, my name is Julia Streets, and welcome to DiverCity Podcast, talking about diversity and inclusion in financial services. On the podcast, we seek to shine a light on positive progress, call out areas requiring further focus, and offer lots of ideas to help drive change. Today I’m joined by Paul Cleal and James De Sausmarez. Paul Cleal is the senior board member and advisor specialising in strategy, leadership and change. He has enjoyed a prestigious career spanning some 30 years working in local and central government, for 16 years of which he was a partner in PWC, serving on the management boards in both the UK and Africa. Paul has won a number of awards for his work in diversity, and was also a board member of the Social Mobility and Child Poverty Commission advising government ministers. Paul, welcome.

Paul: Thanks, Julia.

Julia: James De Sausmarez is Director and Head of Investment Trusts at Janus Henderson Investors, and is a leading figure in the investment trust industry. He is responsible for all aspects of the business, including the relationship between Henderson global investors, and the boards of the managed investment trusts. James is a common councilman in the City of London Corporation, and a member of the Council of Saint Paul’s Cathedral, and he tells us he is a firm believer in diversity and social mobility to create a city that offers genuine, equal opportunity. James, welcome to the show.

James: Thank you.

Julia: At the start of the show, we invite each guest to take a minute and tell us what they’re focused on at the moment. So Paul, let me come to you, first of all. What are you working on?

Paul: Thanks, Julia. Well, at the moment, in the nearly a year or so since I left PWC after many years, it’s given me the time to focus on some of my passions around social mobility and diversity and inclusion, among other things. There’s two things I’d like to mention. One is the ongoing amount of mentoring I’ve been able to do with young colleagues and friends across a variety of industries. I think that’s a really good way of learning about how they see the world, and I think the whole idea of reverse mentoring, which I’m sure we will talk about at some point, is a good example of that, because senior people can understand what the world looks like from the viewpoint of more junior people, and of course, the world’s moved on since they were that age. So I do a lot of mentoring still.

Paul: In terms of organisational work, one of my board roles is with Kingston University, and they’re a very interesting university. They’ve had some difficult times in recent years, but are rebuilding, and going from strength to strength. Part of that has been the development of the inclusive curriculum. Around 50 percent of Kingston students are non-whites, and they typically, historically, as in many universities, have lower achievement rates. Kingston does a great word to get those rates up. Then finally, I’d mentioned also the work I do with the Premier League in football, which brings together my passion for diversity with one of my other passions as well. I’m working with the clubs to help them achieve their equality standards. That’s been pretty illuminating, getting under the skin of a game that I love, but also looking at it not just from a sporting viewpoint, but also from what needs to change around diversity, and of course, in all these different industries, you find different issues.

Julia: And there’s some really fascinating stuff there about, clearly, role models, and what people see on the big screen while they’re watching the football, thinking about organisational structures and reverse mentoring, and of course feeding the pipeline right the way through to academic backgrounds, if you like. So plenty there we’ll unpick for sure. James, let me turn to you . What are you focused on at the moment?

James: Well, perhaps by way of background, it’s worth saying that the investment management business is a global business, and it’s a very highly competitive business, and it’s one that in which you need to succeed, you need to have the best possible people you can. And diversity is absolutely critical to getting the best people you possibly can. And something therefore we’re focused on, if we don’t have the best people, we won’t innovate well, we won’t develop our business successfully, and we won’t achieve our objectives on a global basis. So against that background, it’s very important. I think also, it’s important to remember that there are an awful lot of negative perceptions around about the role of the investment management and wealth management industries. I think that’s one of the things that we’re actively addressing, is how can we do that better.

We need to do something positive, and we have been doing something positive since 2010, when our co-Chief Executive was one of the founders of Investment 2020. Investment 2020 is aimed at targeting young people to get into the business of investment management, because there are lots of very strange perceptions about who should be in investment management and what sort of people are suitable for investment management. And I’d recommend anybody listening to this to have a look at YouTube, and if you look up “investment management industry”, be surprised by who works there. You’ll see an extremely good little podcast describing just how diverse some of the young people are that are now working in the investment management industry. If we can extend the number of young people working in our business in a diverse way, as they move through their careers, it will improve as you go up, and eventually, we will have a proper representation at board level.

Julia: We’ll be sure to put that YouTube clip on the website, and also tweet that out as well, which is great. And again, there’s a lot in there about the commercial imperative. This is a great conversation to be having, but ultimately, it’s about performance, particularly in the world of investment management. And then attractiveness as an industry, actually for that young talent you were talking about, Paul, in universities, and why would people want to work in the city if they don’t feel that they have a place and a contribution to be made? Particularly when targeting young people. So I wonder whether starting with young people is the most natural place to begin. I’m always cautious before I talk about talent in a young sense because there are lots of amazing retraining initiatives, particularly around digital skills.

We’ve had some of the guests on podcasts before, but let’s go back to university, and first entrance, let’s call it, into the industry. Paul, you talk about your work at Kingston University. Particularly, we’re sitting here at DiverCity Podcast thinking about financial services. Do you think there’s a huge void between the talent coming through and wanting to come into the city? Does that feel like a void that is easily breached, or do you think the industry has a long way to go?

Paul: I think it has a long way to. I think it’s quite a chasm for a lot of people – the perceptions, and as James was just mentioning, I think there are some very particular perceptions about what the city requires and who’s likely to be successful. So yes, it is a big jump for a lot of people to make, and I think role models are an important point and part of that, because if people look at the senior people in organisations and don’t see people like themselves, then they kind of automatically imagine that perhaps they’re not welcome or it’s not suited to them.

I’m one of probably a handful, maybe less than 10, partners that my firm has had in total over the years, out of probably 2000 in total. Really, a lot of people have said to me, a lot of young people in the firm, a lot of graduate joiners have said to me, “how did you get here and why are you the only one?” Of course, a lot of the time, that then leads to mentoring relationships, and perhaps helps them to stay a bit longer. But I think one of the problems that many firms find is that their graduate intakes can be very, very diverse. But unfortunately, over time, a lot of those people move on, and the flowing up through the grades to the senior positions doesn’t always happen, and that’s true of various different minorities.

Julia: And what can close that gap? Would it be more corporates reaching out and inviting students into their organisations? Are there some very practical things you think the city can do to open its doors to demonstrate, because there’s a lot we hear about on the podcast about new role models coming through.

Paul: I think firms have to be very clear about where their particular challenges are. It’s quite hard to generalise around the whole industry, and in fact, of course, financial services is a whole range of industries, not just one really. So whether you’re in banking, insurance, asset management, professional services, it’s all different. I think individual firms, and we did this at PWC many years ago, have to look at where they’re doing well, and where they aren’t. We thought we were doing well because we were, for example, in the case of ethnic minorities, recruiting something like 35, 36 percent of our graduate intake, and that was more than the national average. So we thought, “That’s great. We haven’t got a recruitment problem.” Then we found out that the application rate was 50 percent, so we were actually not doing as well as we thought we were, relative to those who were actually applying. So getting people to apply wasn’t the issue, but advancement in the firm is another matter entirely.

Now in different corners of the industry, it might be that attraction is an issue. For others, it’s retention. For others, it’s promotion. So I think people have got to be very careful about understanding … look at the data, and work out where their own issues are, and then see what they can do things differently.

Julia: Is there anything in what Paul is saying, James, in the work you’re thinking about, both within your firm but also as part of the Investment 2020 that you could respond to?

James: Well, absolutely. One of the first things to remember, of course, is that working in the city is not about finance. There are an awful lot of jobs in the city that have got nothing to do with finance, but actually are very, very important, whether that’s marketing, human resources, compliance, risk. There’s some very different things, and I think people have it fixed in their mind that sometimes, in order to come into the city, you’ve got to be doing economics, or you’ve got to be a graduate. Within Investment 2020, 48 percent of the people who’ve been placed in jobs within the city are not graduates. So the city isn’t just a graduate place to work. We welcome people who are straightforward school leavers.

Julia: Has that changed over the years? Do you have any sort of baseline figures to compare with?

James: I don’t have a baseline figure, but I think that that’s the important thing, is it’s for everyone. We need to get that message out and take away that stereotype. 38 percent of the people who have been placed are female, 41 percent are from Black, Asian and minority ethnic groups. So we’re getting this sort of mixture. 88 percent of the trainees we’ve placed come from state schools. There is this stereotype that city people have to come from public schools. They don’t. I went to a state school. So that I think is all very, very important. The success of it, I think, comes in the fact that 74 percent of the trainees who went to work in the 30 different asset management businesses that are a part of Investment 2020, 74 percent of them stayed in permanent roles.

So they’re getting in there, they’re trying it out, they’re succeeding. I think that’s very important, but what we’ve got to be, to make this work, is welcoming. That’s very, very important, because when people are bringing people into their businesses, when you’re recruiting people, you tend to look for people that you think will fit into your team, and that actually is the wrong mindset. One of the things we do at Janus Henderson is try to educate our managers who are recruiting people to think outside that, not think who’s [inaudible 00:11:19], who’s got the skills, who can really add value?

Julia: And there’s always a very interesting dynamic to that, and I personally have quite a lot empathy for it, which is it’s very easy to talk about the middle management layer, who again would naturally sort of resort to type. I’m thinking, when I frame this out in two ways, one of them is about the organisational fit, and how therefore do you get an organisation to fit its future talent and its talent to be welcomed into the organisation. But then also, the other thing is changing the mindsets of people who have been hired in a particular way, are set targets in a particular way, remunerated in a particular way, and therefore it takes some courage to think about that. So I open the question to you both, and maybe perhaps, Paul, we’ll start with you about the question about organisational fit, and how do you see that changing, or do you have any ideas about how to help that shift that dynamic?

Paul: I think most organisations have an aspiration to be more inclusive, to welcome in a wider variety of people, change some of those perceptions that the James was referring to. I think the issue is often one of incentives. I know from my long experience as a partner in a professional services firm that you’re under an awful lot of pressure day-to-day, yet you have to deliver the financial results. If you’re auditing one of the largest banks in the country, or you’ve got a complex corporate finance assignment like some of the ones I used to do in infrastructure, then you want a team that’s going to deliver for you because you don’t want to take a risk in many cases, and that can lead to a certain type of behaviour in terms of who you select, and what would appear to be safe choices.

Now of course, you never know what would have happened if you chose someone else, but the tendency to choose someone similar I think often comes back to the pressures that people are under on a day-to-day basis. You’ve got to kind of relieve some of those pressures if you expect things to change. You can’t just expect people to be more pro-diversity and include a wider variety of people if you’re not going to also take some of that pressure away.

Julia: What will release that pressure valve, if you like? Is it about saying to people, “We’ll give you a quarter’s grace,” or I don’t want to put words in your mouth. What are some of the things that will drive that change?

Paul: We often talk to, in the firm, about a balance scorecard in terms of how we are evaluating people. Part of that scorecard was based on how much money you brought in, part of it was how well you did your job in relation to the people in the team, part of that was just being a good corporate citizen. But at the end of the day, if people get the feeling that it’s the financial side of things that’s really going to be 90-odd percent of the way in which they’re evaluated, then that’s when the choices that people make get skewed.

So I think you got to be very clear, send very clear signals about what sort of behaviours you want, the ‘how’ you do things rather than just the ‘what’ you do, as a leader in a business to try and change the way in which people behave, and bring awareness to people as well, because it’s not always obvious to them when they’re busy and stressed and making these day-to-day choices that that’s what they’re doing. But there are certain behaviours that lead to better chances for some than others, that a good leader can call out and make people aware of.

Julia: And James, in your world, driven by very explicit performance that literally is measured day-by-day, month-by-month, quarter-by-quarter, and again, coming back to this question about the middle management layer and how do you encourage people to engage with talent that isn’t exactly like them. Any things that you’re particularly focused on?

James: Well, I think one of the things that’s desperately important is that white, if you like, boys particularly, but some girls as well, are very much better at selling themselves than people from ethnic minority backgrounds who are much quieter, much shyer, slightly more reticent. So one of the things that is very important when you’re interviewing somebody is to actually dig deep. Don’t just see what’s on the face, but dig deep and ask a lot of questions. I think the other thing that’s very incumbent, and really benefits the business, and has certainly benefited my business, and has certainly benefited my team, is flexibility, about how you manage them and making it clear to them that you are a flexible employer. So giving them time if they’ve got families. I’ve got some fantastic married men and women, all of whom we’ve got children who have demands around the fact they’ve got children, and I’m quite happy for them to manage their time.

They get their job done, if they need to nip off, they need to do things, they can. That way, you get a lot of loyalty, you get some high quality work, but also, it’s down to simple things like with some very good people from Muslim backgrounds, for example, who like to pray in the afternoons. Well fine, let them go and pray, provide them with the space. If you’re flexible and you say, “Look, we’re welcoming, we’re very happy, whatever you’re comfortable with”. Then you’ll get the best out of them.

Julia: That’s about giving people an environment within which to bring their authentic selves to work, and that is multilayered. It’s interesting, your point about when you go into interviews because often, still pools, not the brash people who come in to an interview going, “I’m the correct person for the job,”. Still pools often run deep, and it’s about getting down into that. A lot of that talent is, it’s not a topic for today’s podcast specifically, but a lot of that talent is very much driven by spirituality and faith and those value systems, which again, need to be given environments within which to exist and thrive.

James: Absolutely, and what happens is you get these people into your teams, and then they start looking at things in a different way, giving different insights, different thoughts, and then suddenly, the people that you’ve had that have always been there suddenly think, “Oh, this is interesting, this is clever. I’ve not thought of it that way.” Then the collaboration becomes much, much more effective, and it’s successful collaboration that drives successful innovation that drives a successful business. That’s why it’s so valuable to be doing this.

Julia: And arguably, again, this comes back to commercial imperatives and also competitive advantage, and success. Is there an untapped competitive advantage in tapping into these pools of talent, particularly in the BAME community, Paul. I hear a lot of people do talk about this and just go, “It’s right under our noses and we’re not tapping into it.” But are there some inherent behaviours and characteristics?

James: I think, yeah, fundamentally, I agree entirely with what James said about diversity and the way he described very well what happens in those interactions in teams where you get different people with different views because they do think, “Oh, I hadn’t thought about that before,” and start to think differently and build on each other, and you do get a better outcome. I think one of the interesting points is, James, you made the point about white males being better at self-promotion. I would say white males are better at self-promotion to white males because a lot of women aren’t very impressed with obvious white male self-promotion. A lot of people from other cultures aren’t very impressed with white male self-promotion either, and that in itself is a generalisation. But nevertheless, I think what a lot of white males can do very well is demonstrate the sorts of traits that we’ve seen as leadership traits for a long time.

Paul: The fact that there’s another way of doing it isn’t necessarily always appreciated, and one of the points, Julia, I think about authenticity, is that sometimes people feel, some women feel, they have to be like a man in order to be perceived as likely to succeed. And a lot of people from ethnic minorities who have different cultural approaches feel they have to be louder. It always amuses me the way white British people react to white Americans, they always think they’re way too loud and everything. Well, that’s kind of the way that a lot the rest of the world looks at British people! So all these things are relative, and there are different ways of doing it, and we have a particular cultural set of norms and appreciations here in the UK that we think are good. There’s a certain amount that’s loud enough, but not too loud. We like a little bit of reserve, and it’s different in certain places, and sometimes, outsiders have to learn that and adapt, but equally, they need to be able to bring their own authentic self and get you as a team to a better result.

Julia: I think that’s a perfect moment to take a break there and turn to Cynthia and Robert for some research to support today’s discussion.

Robert: A recent study carried out by Investment 2020 shows that there are still stereotypical perceptions about working in the city.

Cynthia: A survey of 1,500 people aged 16 to 24 in the UK, showed that almost three quarters of the young people still believe that a university degree is essential to being able to work in financial services. 46 percent of those surveyed said they wouldn’t consider a career in financial services, with only 16 percent finding the sector appealing at all.

Robert: These statistics show that the industry still has work to do if it is to attract the best and brightest young talent.

Cynthia: BAME employees aged 18 to 34 were more likely to agree that everyone has the opportunity to achieve their potential at work, no matter their identity or background, compared to those aged over 45. All BAME employees, regardless of ethnicity, were significantly more likely than white British employees to say that seeing other people like them who have progressed in the organisation would help boost their careers.

Robert: Employees from Indian, Pakistani, Bangladeshi, and mixed race backgrounds were more likely than white British employees to say that having a mentor would help kickstart their career. Although the research covered a number of different sectors, it provides financial services firms with ideas for how they can better support the career progression of BAME employees.

Julia: Thanks Cynthia and Robert, and links to the research can be found on the website,, where you can find all our episodes and sign up for early notifications of future recordings. Please do follow us on Twitter, @DiverCityPod, and DiverCity Podcast is available on BrightTALK and all good podcast channels. We’d love a rating, it all helps to promote the show.

So in this discussion, we’ve been thinking about the accessibility and the connection between talent and organisations. I think one of the most fascinating dynamics at play at the moment is how so many jobs didn’t exist five years ago when you think about the impact of technology, and also digital skills in cyber, etc, which almost turns organisations on their heads because senior managers used to know everything and young talent used to know nothing. But of course now, senior managers look at young talent going, “I really need you.” Coming back to this point we were making earlier about how do you get those two worlds to connect better, and James, how do you open up that pool of talent to make it available for the organisation as a whole?

James: Well, one of the ways in which Investment 2020 makes these middle managers more comfortable about employing these sorts of people is by taking the trainees that are placed through Investment 2020 out of their head count so that they’re employed centrally within the organisation, and then placed for a year into the different businesses. And I think what’s really interesting about that is that a lot of the teams have got lots of work on, there’s lots of things going on, they need extra help. So they want to have the trainee. They get the trainee in, and when they get them, they realise how good they are.

74 percent of the people in Investment 2020 placed ended up in a permanent role within the firm in which they were a trainee. I think that’s very significant, and I think having had one trainee from a diverse background that’s done a really good job for them changes the mindset of the middle manager almost straight away. I think the more we do this, and any business outside of the investment management industry should think about giving this a try – having trainees centrally funded that managers can have in their teams for a period and realise just how good they can be.

Julia: There’s always that interesting discussion about how you need talent to drive performance, and this really is about, again, I’m going to keep coming back to this point because, that is ultimately it’s commercial performance that will drive change. Paul, how do you look at the world? As an outsider looking in, and watching all these dynamics at play, what are your thoughts around performance?

Paul: Well, as far as diversity and inclusion goes, that’s the whole point for me. I said to someone the other day who was saying, “Oh, I get told by my boss that I propose all these diversity initiatives.” And he said, “Well, if we do, all of that we’ll end up going bust.” I looked at him and said, “Well, I’ve been working in diversity for probably about 15 years, not as a day job all the time, but as part of my job, and I’ve never recommended that the organisation do anything that isn’t consistent with better performance.” Now sometimes, I think as James just said, you need to find a way like, for example, centrally funding some new trainees, of getting people to try before they buy, as it were, to try and de-risk it for them. Because a lot of this is about risk and fear.

But of course, we can’t just assume that today’s performance is the best that can be achieved. It’s what we’ve got, but it may not be the best way we could achieve. So maybe if we try some different people, we’ll do better. But getting people beyond that risk aversion, giving them the tools to take some risks is often what this is about. There are lots of inhibiting forces in organisations that stop people taking risks. Sometimes, different people are perceived as a risk when they’re not really, they just look different.

Julia: Of course, is it fair to say that will change over time? I think one of the things I loved about your story, James, was that message of ‘try once, and you’ll learn through the process and open up your mind’. I’m actually quite hopeful, in the context of this conversation, to think that will change over time. Any final comments from the two of you?

Paul: I’m an optimist, but I would counsel caution that things will just change over time and gradually. They will to some degree as demographics change. But I think we’ve been at this for a long time now, and I think the speed of change in organisations isn’t as great as I think a lot of us would have hoped. So just because you’re getting people in at the bottom doesn’t mean they’ll flourish, and it’s often what’s going on within an organisation that’s the hardest to understand – it’s cultural, it’s not written on the walls, but people know what’s going on, and we have to work at that very, very, very hard, consistently, to try and make sure that we do genuinely develop inclusive leaders who can get all sorts of people up the firms and into senior positions.

Julia: And what do you think will be the accelerating factors to drive that change faster?

Paul: I think it’s a mindset really. I think people have to see the limitations of the way in which firms have been run in the past and be open to change. Leadership at the top level of firms across any industry is critical in that, because it’s those people who will give other people the courage to take those risks.

James: I’d absolutely agree with what you said, and I think the real issue here is making sure that these people from diverse backgrounds who are coming in at the bottom then flourish through the business going forward. I’m optimistic that will happen. I’m certainly optimistic because the senior management at Janus Henderson for one is absolutely committed to it. But why are they committed to it? They’re committed to it because it will make the business better, and that I think is the key thing. And also, I think young people themselves are much less touched by these stereotypes than the older people are, and these older people are going to retire. So I think things will change, but we can’t be complacent about it. We’ve got to keep pushing the agenda, keep talking about it, and pointing to where within the business success has come, because we’ve had this diverse employee workforce.

Julia: It’s been a wonderful conversation, we could talk for quite a long time. I just want to take the moment to thank you both for coming along, Paul and James. Thank you.

James: Thank you.

Paul: Pleasure, thanks.

Kieron: This episode of DiverCity Podcast was produced by me, Kieron Yates, on behalf of Julia Streets Productions. Thanks to Cynthia Akinsanya and Robert Pinto-Fernandes for their insights. You can find out more about guests on this week’s show on our website, Whilst you are there, you can also sign up to our newsletter for all our latest updates. To be sure of catching all our future podcasts, subscribe to our feed in iTunes or your favourite podcast app. And if you’ve enjoyed this episode of DiverCity Podcast, remember to give us a rating or a review, it all helps promote the show to a wider audience. Finally, our Twitter handle is @DiverCityPod. Thanks for listening.