‘A culture of inclusion is more important than ever’

Clare Woodman EMBAL2016 became Morgan Stanley’s first female head of its EMEA operations in 2018. As the first woman to lead a major investment bank in London, her promotion made waves in a still very much male-dominated sector.

The gender imbalance in most sectors and businesses is so stark that at the current pace of change it will take 99.5 years to close, according to the World Economic Forum’s (WEF) Global Gender Gap Report 2020.

This really matters. A growing body of evidence and research points to the financial advantages of gender-balanced teams as part of a diverse and inclusive workforce – and a culture of diversity and inclusion will be more important than ever as we move from shock to adaptation and, eventually, emergence from the effects of the pandemic, Woodman believes.

“One of the strongest messages to emerge from social distancing and isolation is that humans are at their very best when they’re connected and engaged with each other. Diversity and inclusion are the ingredients of deep and meaningful interactions,”

She adds: “Companies with a culture based on trust, collaboration, and inclusion, in which all employees feel comfortable speaking up, are those where the best ideas emerge.

“The business outcomes of a diverse and inclusive workplace culture go beyond feeling good about ourselves. What we’re talking about is greater competitiveness, better results, and ultimately delivering key business objectives, time and time again.”

So, if you are looking to shape a world you can be proud of, or simply have your eye on the bottom line –– Woodman has some advice.

Create a firm of mentors and sponsors

“Role models, sponsors and mentors have been vital to my career,” Woodman reveals.

She adds: “When I embarked on my career, there were few role models in business and finance. My desire to go into the legal profession was greatly influenced by leading female lawyers practising in the late 1990s and 2000s, like Helena Kennedy QC, author of Misjustice: How British Law is Failing Women, Dame Elizabeth Gloster and Patricia Scotland, The Rt Hon. the Baroness Scotland of Asthal PC QC.

“So, after university, I went into the legal profession.”

But it was when she moved into investment banking that Woodman, who has three children, found the greater flexibility and framework to progress her career. At Morgan Stanley, she credits the bank’s former CFO, Ruth Porat, who is now Senior Vice President and CFO at Google’s parent firm Alphabet, for being a sponsor for her career development.

“She was really instrumental in creating space for women in senior leadership positions at Morgan Stanley and pulling women up the ladder with her. She taught me the responsibility to bring others along with me on my career journey. That’s a lesson I’ve never forgotten.”

Woodman also highlights male allies for presenting helpful opportunities, including Morgan Stanley’s Chairman and CEO James Gorman – a mentor-turned-sponsor. Gorman persuaded Woodman, then Global COO for the bank’s Institutional Securities Group, to “get a business education” and enabled her to join the part-time MBA programme at London Business School and “expand my skillset and knowledge base”.

She credits Colm Kelleher, who was President at Morgan Stanley before retiring in 2019, and her current boss Franck Petitgas, Head of Morgan Stanley International, as other key mentors and sponsors in her rapid career progression at one of Wall Street’s biggest firms. She says: “Sponsors have been the catalyst in key points of my career. But sponsorship relationships really only grow out of networks and mentorship relationships. It’s very difficult just to go out and find sponsors.”

Woodman helped to establish an extensive mentorship programme at Morgan Stanley. “We spent hours matching mentors with mentees because the relationship has to be absolutely right.” The hope is that the mentors will evolve to become sponsors of those individuals.

Even without an official initiative, Woodman insists that all ambitious and committed women no matter their level in their organisation are role models and should have as many mentees as mentors. “Be reciprocal. Pay it forward,” she insists. “I am convinced I learn more from my mentees than they learn from me.”

Be committed to flexibility

Research has surfaced how diversity, from a gender but also a racial and ethnic perspective, fosters better decision-making and can have a significant bearing on growth and innovation – but only if managed well.

“Flexibility is hugely important, not just to women but to men. Paid paternity leave didn’t exist 20 years ago. That is astonishing. Paid paternity leave is one of the key drivers of gender parity, particularly in advanced economies. Certainly, flexibility was key to me being able to advance my career.”

Woodman, a Trustee of the Morgan Stanley International Foundation, overseeing the firm’s longstanding partnership with Great Ormond Street Hospital, says flexibility is a big driver of diversity, the basis for an inclusive business.

“We need to ensure flexible working in the workplace is a natural part of society, with fair balance on parental leave and options that suit a truly varied skillset.

“The pandemic has resulted in rapid innovation, which would have taken years to implement in normal circumstances. Processes are being automated faster; digital solutions have been embraced and less travel is freeing up time in calendars, all of which enables greater flexibility.

“But, while a lot of the stigma and bias around working remotely has certainly been eroded over the past few months, working from home brings its own challenges in terms of switching off and disconnecting from work, and it will take time and caution from managers to ensure their teams are not suffering from presenteeism and long hours.

“We also have to remember that many businesses, including investment banking and the legal profession, are social organisations and we still think that there are clear benefits to people being together in an office environment. We have found that effective teams are built on strong ties and clear communications. It’s also important for culture and for learning and development, where a significant amount of knowledge is gained by observing colleagues - now much more challenging given remote working.

“The challenge is going to be to find the right balance between taking some of the positive changes forward as we map out what the future of the workplace will look like and design a strategy that provides the best of both worlds. Lynda Gratton’s recent piece on the future of work addresses this issue and she notes that what we do, where we do it, how we work and with whom - will change, possibly unrecognisably in our lifetime. It is not just our day-to-day working conditions and habits that will change dramatically. What will also change is our working consciousness.”

She urges organisations and people managers: “Appreciate that people work at their own style and pace. Utilise unique skillsets and build diverse teams, using the technology that enables flexible working. Diverse teams make better decisions,” she says, but only if kindness and empathy are at the core of team dynamics – and that is up to a manager to cultivate.

Actively demonstrate inclusive leadership

“Inclusive leadership is powerful and effective,” Woodman insists. She says, that at board level, “we need to change outdated mindsets and we need to do something about unconscious bias. We all have them. I have them.

“At Morgan Stanley we started to tackle this through training and conversations in informal settings as well as informal discussions to understand bias and the behaviours and attitudes that exclude people. We have to remember that diversity and inclusion doesn’t just happen at the promotion discussion. It doesn’t just happen at the interview stage. If it is only being discussed at the final slate of Managing Directors to be promoted, it’s way too late.”

The bank has been public in stating that nurturing its pipeline of female talent is a strategic priority. In 2016, Morgan Stanley signed the UK Government’s HM Treasury Women in Finance Charter. As part of that, it committed to increase the representation of women in senior management roles to be at least 30% by 2023.

“We found at Morgan Stanley, we needed to set targets, partly because if you really care about doing something, you measure it. Ultimately, the target is the thing that is going to drive behaviour and action.”

Woodman expresses hope that in the future, the need for targets will fade as more businesses rethink priorities.

“Recent weeks have reminded us all that innovative and agile approaches to work are key components of survival through crisis. When all employees feel connected and a sense of belonging to their workplace community whatever their identity, they work harder, they have great ideas and they share them. This will be ever more critical for success in the difficult post-pandemic era ahead.

Clare Woodman EMBAL2016 is head of EMEA and CEO of Morgan Stanley & Co. International Plc. Her comments were made at the 20^th annual London Business School EQUALL Women in Business conference in March, just before the UK lockdown.