Respecting Diversity: Good for Canada, Good For Business
The RBC Financial Group Example
RBC Financial Group (RBC) is Canada’s largest financial institution - by market capitalization and assets - with over 14 million clients and more than 60,000 employees worldwide. The company offers services in personal and commercial banking, wealth management, insurance, corporate and investment banking, and transactional services. For the third year in a row, RBC has been named "Canada's Most Respected Corporation" in an annual poll by KPMG and Ipsos Reid. CPRN Work Network Researcher, Richard Brisbois, spoke with Zabeen Hirji, Senior Vice President, Human Resources at RBC, about the company’s diversity strategy.
RB: Can you give me a brief history of RBC’s diversity strategy?
ZH: It would probably go back to the early 1970s when women’s issues started to bubble up in general, and also within RBC, because of our very large female workforce. Then in the 1980s, the introduction of the federal government’s employment equity legislation saw the formal beginnings of a strategy focusing on the four designated groups: women; visible minorities; Aboriginals; and people with disabilities. Through the 1980s, we were focused very much on the women’s portfolio and this continued into the 1990s with a focus on our work-life balance initiatives.
In the mid-1990s, we had our first significant initiative, called Closing the Gender Gap, which was focused on increasing the number of women in senior management positions. Later in the 1990s, as the face of Canada started to change in terms of the growth of visible minorities, we broadened our diversity initiatives to focus not only on women, but also on cultural diversity in a more significant way.
In the last few years, we have had a Diversity Leadership Council led by RBC’s CEO, Gord Nixon, with membership from senior leaders from across all of our businesses in North America.
RB: Has senior management always been involved in the Diversity Leadership Council?
ZH: Until 2001, senior management was involved on a less formal basis. Since that year, Gord Nixon has chaired the Diversity Leadership Council, which meets on a quarterly basis. We recognize that it is important to stay the course on diversity issues, and by meeting regularly we are able to do this. Our diversity strategy is more than just a program, per se - although we do have diversity specific programs and initiatives - diversity is something we embed in the way we do business. I think having both our CEO and other senior leaders from all of our businesses on the Diversity Leadership Council adds credibility to the issue and allows us to really integrate diversity into our entire business. The approach is not, “let me put on my diversity hat and do diversity for a while”.
RB: What is the business case for RBC’s diversity strategy or initiatives?
ZH: First of all, let me speak about women. It’s a pretty compelling business case - women make up 50% of the population, 50% of the potential talent pool, and 50% of the potential client base. Women make many financial decisions as individuals or for their families and we need to understand and serve the women’s market. Our workforce is about 70% female, so there is a compelling business case to ensure we are attracting and retaining the best talent, enabling them to perform at their best, and achieve their full potential at all levels of the organization. As we look at cultural diversity, I sometimes say to people, “Ride the subway in Toronto or walk the streets of Vancouver and you can certainly see a strong business case.” Visible minorities currently make up about 13% of the Canadian population and this is projected to exceed 20% in the next twelve years. So our client markets are changing with the changing population. Having a culturally diverse workforce and understanding their needs is really an effective way to better understand the needs of a culturally diverse client base. This allows us to serve the clients the way they want to be served.
RB: How does RBC define diversity?
ZH: We have defined diversity as including primary dimensions (those we are born with) such as age, race, as well as secondary dimensions (those we acquire) such as work experience, religious beliefs, management style, etc.
Our broadest definition shows up in one of our values, which is “Diversity for growth and innovation”. This statement recognized the importance we place on growing, as individuals and as an organization by respecting and leveraging our similarities and differences. This is an integral component to our bottom-line success. By drawing upon the resources of our businesses, geographies, markets and people, we generate ideas and solutions that break new ground. This would be our highest level definition.
Examples of how we apply the definition include: having focused strategies around the workforce; the work environment; and the marketplace, including women and cultural markets. Our definition of cultural markets extends beyond visible minorities. It includes how we serve clients in the Italian or Portuguese markets, for example.
RB: Has the definition of diversity evolved? Why?
ZH: Absolutely, the definition of what we mean by diversity really does change depending on our client and talent markets. But there has also been an evolution in the application of the definition. So, if you look at the prairies for example, there is a large Aboriginal population. We have a big focus there on attracting Aboriginal talent and serving the needs of Aboriginal clients. Whereas, if you look at larger cities like Toronto, Vancouver, Montreal, there is a much greater focus on the changing demographics around visible minorities. This then becomes a focus on the cultural/visible minority markets in these cities. Now we are seeing issues related to the needs of new immigrants, or new Canadians, and how to serve them better. It’s all about looking at your employees and customers through many different diversity lenses.
RB: What have been some of the greatest challenges or obstacles faced in implementing RBC’s diversity strategy or initiatives?
ZH: That’s a great question. I think one of the ongoing challenges is with respect to our goal to have more diversity in senior management. Some people would say that this is a “quota”, but my response is that this is a business goal. We have goals for everything that’s important to us in this business and people are held accountable to them.
I often get asked the question: “So if you have two candidates, one is a women or a visible minority, and the other is not, but they have equal skills and capabilities, does this mean you pick the diverse candidate?” My answer is: “Look at your entire team.” If you have a team with very little diversity, bringing in somebody that is different introduces a different life experience, a different cultural experience or background. Can this not bring the team a different capability? It depends on the team, it depends on the market you’re in and it really depends on what you want to do. So, it’s expanding the definition of what skills and capabilities are through a diversity lens.
RB: How have employees responded to RBC’s diversity strategy?
ZH: I would say overall the response to our strategy has been very positive and it is also important to potential employees who are considering employment at RBC.
RB: How have your customers responded to your Diversity Strategy?
ZH: Overall, the feedback has been very good. Our strategy is about better serving our diverse range of clients. This is not a zero sum game. It’s not serving one client at the expense of other clients, but rather, it is about serving all of our clients better. For example, we serve our rural clients and our urban clients in a different way because each group is looking for something different. That’s diversity as well.
Some people may respond in a negative way, but I see that as an opportunity to help educate someone to see things from a different point of view. We really want all of our employees - and the overall Canadian labour force – to achieve its full potential because that is what drives growth. What is good for an individual is good for the company and is good for the future success of Canada. Changing some people’s thinking about this is the right thing to do from a corporate social responsibility perspective, but you know what? It’s also the absolute right thing to do for business.
RB: What kind of diversity training does RBC offer?
ZH: We have a whole host of training from informal to very formal. Let me share a few examples.
We have a website, called Destination Diversity, which is very popular with our employees. The site has educational and training modules that managers can download for sessions with their staff to help manage different elements of diversity, such as cultural diversity, disability issues, or dealing with diverse clients.
We have a management training curriculum that all new managers are required to go through that we call Managerial Excellence. The curriculum includes sessions on client service, managing employee relationships, and change management. But integrated into these courses are the key elements of our diversity strategy.
Not only do we try to weave diversity into a lot of our training, we also ensure that diversity is integrated into our messaging from the CEO and senior management. For example, during conference calls with employees, we try to ensure there is always a bit of diversity integrated into the broader message. I think this is really critical, that we make diversity part of our everyday business. It’s not simply about offering a course in diversity or talking about it now and then. It’s about integrating diversity into our everyday business operations, including our management training.
RB: Could you tell me a bit about the idea of “diversity champions”?
ZH: We have diversity champions for many of our employee groups and for our different cultural markets. The role of the champions varies, depending on what we are trying to achieve both within the organization and with our customers.
I think one of the best examples of the use of diversity champions within RBC is with our Aboriginal employees. We have an employee resource group called the Royal Eagles, which is championed by one of our Aboriginal executives. This group provides mentoring and support to Aboriginal employees, particularly when they are new to the organization. A key objective of the Royal Eagles is to support the integration of Aboriginal employees into the organization and enhance retention.
We also promote the use of diversity champions in our client markets. These champions participate actively in these communities, or cultural markets, and really look for ways to leverage our diverse workforce to better serve these markets.
RB: How do you measure the success of your diversity strategy?
ZH: There is no one single measure of success, which can make it a bit tricky.
We have chosen to focus on some objective measures, such as the percentage of women in senior management. The reason we have chosen to focus at more senior levels is because we have such a large female workforce. It’s not so much an issue about attracting more women to the organization, but rather about assessing how well they are progressing into senior roles. Our first woman executive was appointed in 1979. As of December 2004, women made up 37% of our executives, so focusing on the issue has made a difference.
It is a similar strategy with regard to visible minorities, which make up around 23% of the broader workforce, and 10% of executive level employees. So we are more focused on senior levels, and have measures that tell us how well we are progressing. These are important measures for us.
We also keep an eye on the results of our employee opinion surveys, which are generally conducted every 18-24 months. The surveys give us a sense of how well diversity is being embedded in our culture. Are people feeling their differences are being respected, and are we creating an environment where this is being leveraged? Are our diverse employees feeling the same way about their career future at RBC as other employees? We look in-depth at the results of these surveys, act on the findings and track the results to see how well we are doing at embedding the diversity culture across the organization.
RB: What are the future plans for RBC’s diversity strategy?
ZH: We are going to continue to do more of the same work. One of the things we have learned is that it is sometimes more effective to focus on a few vital initiatives, as opposed to trying to do it all at once. Many diversity initiatives happen at the grass roots level, and we support these fully. From an organizational perspective, the diversity strategy is no different than our other business initiatives. They are all about attracting the right talent, serving our clients, and our markets better, and growing our business.
RB: What advice would you give to another organization looking at developing their own diversity strategy?
ZH: I think having visible senior management support - and probably the CEO - is critical to making any significant headway. It is also important to strike a balance between the business imperatives and the social benefits. It’s about helping people overcome barriers, but it also has to be effective for the organization. Staying the course is also key, as there are certainly going to be ups and downs. You have got to think about this as a long-term change agenda, and you have to stay the course because it’s important.
RB: Do you have any final comments?
ZH: I think part of the reason you are talking to us is because we are leaders on the issue of corporate diversity, although we still have progress to make ourselves. It has, and continues to be, such a strong focus in our organization, and we are seeing success from it. People want to come to work for us because they view us as an organization that values diversity.
Customers also see the merit in our diversity strategy. Customers want to see that our diverse workforce reflects them and that our commitment to them goes beyond simply winning their business. Often it extends to demonstrating a commitment to their communities. So the payback on our diversity strategy is certainly there.
RB: Thank you for taking the time to talk to us today.
ZH: My pleasure.
The RBC Financial Group website - www.rbc.com
For further reading on this topic, please visit www.rbc.com/newsroom/20051020diversity-news.html, where you will find an overview of a major economic study by RBC, entitled: The Diversity Advantage: A Case for Canada's 21st Century Economy.