FOREWORD: CII
Understanding the ecosystem
Organisations can become more inclusive to customers, employees and prospective employees by thinking of structures that exist beyond their own boundaries, says Jonathan Clark, interim chief executive of the Chartered Insurance Institute.
Until recently, we have tended to think of diversity and inclusion (D&I) on a firm-by-firm basis: in terms of board diversity, employer responsibilities and organisational culture.
The regulatory world, which focuses on firms as legal entities, has reinforced this—the UK Financial Conduct Authority (FCA), for example, regulates in terms of authorised firms whose senior managers bear responsibility for systems and controls.
As a result, it is not surprising that the FCA’s first proposals for a rules-based intervention in the area of D&I has come in the form of targets for board diversity that have to be met on a ‘comply or explain’ basis.
However, we know that firms do not exist in a vacuum. Within any sector, people move from firm to firm—they may have as many close friends in competitor firms as they do in their current organisation. What we learn through professional examinations and training is often developed outside the organisation that we work for and is supplemented by everything that we have learned through experience from colleagues, line managers and teachers from many different backgrounds.
Individuals have a sense of being professionals, based on their sector, their specialisms and their own ethical values—who they work for is only one part of their identity.
Not only this, but firms operate in increasingly long value chains of customer-facing, back office and specialist firms, all of whom interact on a day-to-day basis. Firms do not just outsource tasks, they may look to use other firms because they bring a different culture and tone to the proposition, or because they can deal with particularly thorny problems. Values and responsibilities are spread out through a value chain just as much as tasks and processes.
Just before the COVID-19 lockdown, we did a piece of work with colleagues from across the insurance profession for an FCA Discussion Paper. We concluded that it is impossible to understand culture from an organisational point of view without understanding the whole ecosystem in which an organisation operates—its suppliers, customers, clients, regulators and professional structures.
“Values and responsibilities are spread out through a value chain just as much as tasks and processes.”
Jonathan Clark, Chartered Insurance Institute
In many ways, the experience of the pandemic has widened this kaleidoscope of relationships. As homeworking and virtual contact have increased, people can move from one organisation to another, and turn up for work on their first day in the same kitchen or spare bedroom in which they finished their old job.
We are increasingly part of a network of professionals who happen to be employed by one company or another, just as a nurse may be a health professional first and foremost, who happens to work for a particular surgery, hospital or other healthcare provider at different times during their career.
Broadening the boundaries
If we live in a networked world, where an individual’s employer is just one component in a series of working relationships, we can create progress around D&I only if we understand how it operates across the whole ecosystem.
Up to now, the main focus on D&I has been on the largest employers, creating a pipeline from junior through to middle-management and senior roles—looking at how they recruit, how they support employees through different life stages and how they promote people to senior roles. The attitude towards smaller companies has often been one that says: “well, you are small, so you will never be truly diverse, but do your best”.
And yet, within insurance and financial services, it has often been the smaller firms that champion D&I most fiercely—with financial advisers championing the rights of LGBTQ+ clients in their attempts to get fair treatment from life insurance underwriters, to brokers finding new ways of securing affordable cover for clients with existing medical conditions in the health and travel insurance markets.
Smaller firms are often far more focused on D&I because their founders have seen what isn’t working in the sector and have the freedom to do things completely differently. They can draw on their life experiences of being part of a protected group, or of not having the right accent to be considered for promotion, or of being a carer working for an unresponsive employer, and they can use this to create an enterprise whose dynamism and distinctiveness comes from being totally different from everything that has gone before.
They can adopt ways of working that would look like big risks to larger organisations but are no risk at all to a small firm that understands the issue through and through.
“Organisational boundaries have become more permeable, and the COVID-19 pandemic has acted as a catalyst.”
This kind of narrative is common in the insurtech space, where smaller firms are seen as being able to generate an innovative culture that allows them to appreciate the potential for technological change, but it is, if anything, more relevant in the social space, where markets based on smaller intermediary firms allows for greater social innovation.
In this ecosystem-based view of how markets work, it is immediately clear that an approach in D&I that is focused only on internal procedure and culture—as important as these are—is missing out on a huge opportunity to increase an organisation’s awareness of diversity simply by being connected to the rest of the market in a more purposeful way.
Organisations can become more inclusive to customers, employees and prospective employees by thinking of structures that exist beyond their own boundaries—by networking with organisations that specialise in serving customers with particular lived experience, by importing specialist training such as that offered by the Alzheimer’s Society to financial services, firms, or by signposting to firms that offer specialist advice and products.
They can give access to experiences and cultures beyond their own through mentoring programmes and by deepening relationships with suppliers and clients, including those from outside insurance and financial services.
Over recent years, organisational boundaries have become more permeable, and the COVID-19 pandemic has acted as a catalyst, blurring the borders even more. This is not a threat, but an opportunity for insurance to become a stronger, more inclusive ecosystem. We should take it.
Image: Shutterstock / Andrey_Popov
