In a recent white paper I addressed the problem of gender diversity in the investment management industry. I reviewed the industry’s track record on the inclusion of women, explored why diversity is important, and outlined why many firms have found it so difficult to add women to their workforce. You can find my entire paper on our website here.

In this blog post I wanted to share a summary of my observations on what has worked for gender inclusion at Callan over the last 45 years and what lessons we have learned in the hope it will inform others on how the industry can progress toward equality in senior roles by gender, and by all forms of diversity.

Lesson 1: Identify Your Internal Talent Pool

Callan, established in 1973, had a large number of women in operations and administrative positions but none in the research, consulting, or senior management ranks.

What we did right was to recognize and reward the hard work, talent, and complementary perspectives of the women we already had at Callan. Over the years this approach has led to a number of talented women taking on new roles and increased responsibilities. And as those women have advanced at the firm, they have not only provided role models for other women but have actively mentored both female and male associates and helped them with their career progression.

Lesson 2: Look at Non-Traditional Career Paths

We did not just hire people with investment-oriented degrees. In fact, we had the most success with both women and men who majored in the humanities. And, of course, including both genders in our recruitment process naturally expanded the pool of job candidates.

Lesson 3: Listen to Your Associates

The key to our success was to pay close attention to all of our associates, respect their individual needs, and give them a chance to develop their talents. We encouraged all of our associates to have no fear in sharing their aspirations. As a result, we learned more about our associates’ career goals, and that became part of our planning process.

Nurturing and encouraging human beings through the obstacles and challenges of organizational change and their own careers is far from an efficient process over the short term. However, taking the time to listen and accommodate individual needs and concerns proves to be a very efficient process over the long term.

Lesson 4: Be Flexible and Fair

Callan was very early in offering flex-time and work-from-home arrangements when it made sense for everyone. We found that by allowing some “prime time” for personal and family commitments, productivity and happiness actually went up for all genders, even when the official work hours might have been less than full time. We observed that the work still got done during “unofficial hours.” And we made it clear that employees would not suffer adverse consequences from availing themselves of these options. We also took care to compensate all of our associates fairly and equitably, a process overseen by our Compensation Committee. And to better assess gender pay equality, it certainly helps that half the members of the committee are women.

Lesson 5: Avoid Rigid Rules or Goals

What we did not do was establish formal goals or rules for creating diversity. Managers have to be positively engaged and encouraged to feel good about the results and benefits of any program. Callan has a culture of “bottom-up” management. Managers on the ground have the flexibility to spot problems, to fix them, and to seize opportunities to benefit our clients as they occur. This process empowers managers to recruit and promote the people they choose, reflecting our diversity policies, without the potential for any existing organizational rule or preconception to interfere.

Lesson 6: Focus on the Long Term

We are fortunate to be independently owned by our associates. This has afforded us the flexibility to focus on long-term objectives, sometimes at the expense of short-term financial goals. We have used this flexibility to promote and maintain a strong and supportive culture, with a bedrock commitment to our values of integrity, client service, and supporting one another. This long-term perspective and our focus on promoting a healthy culture have both been important factors in allowing us to create a more diverse organization.

Lesson 7: Make It Clear That Failure Is Tolerated

We understand that people often perceive and react to their personal career risk differently. What is needed in a firm is a culture of trust that enables and encourages women—and all associates—to share their career aspirations with management without fear of judgment or retribution.

Management must also make clear its tolerance for failure. This is essential for encouraging people to take the risks that lead to learning and ultimately accomplishments. When people trust that management has their back, even in the event of failure, they act more creatively and confidently, leading to better career outcomes for themselves and better business outcomes for the firm.