Incorporate DEI Into Your Strategic Planning From the Top Down

A research event recap from Filene's Centers for the War for Talent and Consumer Decision Making

As the American population becomes more diverse, credit unions face new challenges and opportunities to serve members and attract the best talent in the industry. To do right by their members and stay competitive, credit unions must embrace diversity, equity, and inclusion (DEI), not just in their words, but in their actions.

There’s a strategy to building a meaningful diversity, equity and inclusion program, and it starts at the top of your organization.

Start With Executive Buy-In

It can be difficult to know where to start addressing problems surrounding DEI.

Whether you are in a management role or not, the key is to build support in the executive team. Filene Fellow Sekou Bermiss says it’s important to know your audience. Before you make your pitch, you should lay the groundwork to make sure you have two or three advocates within the group, he says.

Angela Russell, vice president of DEI at CUNA Mutual Group, discussed the importance of developing alliances with people from all different

Angela Russell and Eric Hansing with CUNA Mutual Group

“We’re dealing with centuries-long levels of oppression. This can’t be undone with an algorithm.”

Angela Russell
CUNA Mutual Group

backgrounds when leading DEI efforts. At CUNA Mutual, Russell noticed that she got a different level of buy-in after she teamed up with Eric Hansing, CUNA Mutual’s vice president of multicultural and corporate strategy. The message and the messenger matters,” she says.

Even if your organization is on board with the concept of DEI, you still may not know where to start. University of South Carolina Professor David Crockett reminds credit unions that whether they realize it or not, they already have an active DEI strategy.

“Taking no steps is a step,” Crockett says. “It just moves you in a direction you maybe don’t want to go.”

Monica Hughes Davy, director of the Office of Minority and Women Inclusion with the credit union regulator NCUA, suggests that a helpful tool that credit unions could use to guide their DEI efforts is the Credit Union Diversity Self-Assessment (CUDSA), a checklist reflecting the joint standards for DEI created by US financial regulatory agencies. That self-assessment can be used to evaluate where you are and where you want to go, she says.

Use Diverse Voices to Interpret Performance Data as You Pursue the “Business Case”

When getting started in DEI, you may have to confront outright opposition from people who believe DEI is divisive or unimportant. More often, you’ll find some people who see it as irrelevant to your core business. In that case, it can help to lead with the business case for DEI, says CUNA Mutual’s Eric Hansing.

“The fact is, in every community in America the population is becoming more diverse, and that diversity matters to business performance,” he says. “At CUNA Mutual for example, we found that African Americans respond at twice the rate of other racial/ethnic groups to our life insurance offers. That insight alone was worth millions to our direct marketing organization.”

That kind of information can get the attention of the business-minded C-suite.

Click to hear Leonard Moore, University of Texas at Austin, remind us that each of us can make an impact when it comes to DEI.

But data alone can be misinterpreted, which is one of the reasons you need diverse teams, Hansing says. They simply make better business decisions, and Hansing witnessed that in action at CUNA Mutual. Even though African Americans had high response rates, they had lower buy rates than other groups.

“I thought it was something about them that was resulting in a lower buy rate,” Hansing says. “But when I asked a diverse group about it, they felt it was about us. We simply weren’t offering a payment experience that works as well for this group. Despite good intentions, my implicit biases caused me to arrive at the wrong conclusion.”

Sharing stories like that, Hansing says, helps bring together business and social perspectives. However, Bermiss cautions credit unions to remember that ultimately, DEI is simply the right thing to do.

“The business case scenario can become transactional,” Bermiss says. “If I no longer see the profit, I no longer care.”

Get Comfortable Being Uncomfortable

To address inequalities related to race, you have to be able to talk about it. To talk about race, you need a company culture that can withstand difficult conversations.

“Inclusivity means making a space safe for people with whom you vehemently disagree,” Bermiss says.

Hansing says lack of vocabulary and a fear of embarrassment can be barriers to talking about race. Before he made an effort to educate himself about race relations, he didn’t know if he should say “Black” or “African American,” and it stopped him from getting involved with DEI.

Attendees participate in a role-playing exercise to practice difficult conversations.

“If you have a brain, you have bias. If you don’t intentionally include, you unintentionally exclude.”

Monica Hughes Davy

Leonard Moore, vice president for Diversity & Community Engagement at the University of Texas at Austin, says he experienced similar discomfort when he first started learning about issues related to gender and sexuality.

“I used to be critical of white folks who were afraid to talk about race,” Moore says. “But we’re in a culture where if one word comes out the wrong way, your reputation and career can be in jeopardy. We have to give people room to grow.”

Bermiss advises managers to proactively look for issues related to equity and inclusion, and not let social taboos get in the way of finding problems. For example, if an employee comes to a manager with a complaint, but doesn’t mention race or gender, the manager should explicitly ask if the employee thinks the issue is because they are Black, or gay, or female, etc. Without that honesty, employees may not feel safe bringing up the real reason they believe they’ve been slighted.

Report No. 494 12/19

The policies throughout a credit union can be laced with unintended biases that make the organization less welcoming and productive for some employees than others.

Find Hidden Biases In Your Hiring Process

CUNA Mutual’s Angela Russell led her organization to identify biases in their hiring efforts, going line-by-line through their recruiting process. The result was 12 pages of biases, including things like evaluating GPA for interns, or a recruiter skipping a phone screening 

Click to hear Sekou Bermiss, University of Texas at Austin and Filene Fellow, talk about how we may be inadvertently selecting out demographics without knowing.

because they couldn’t pronounce the candidate’s name.

Filene Fellow Sekou Bermiss points out that hiring only for skills, rather than aptitude or diverse backgrounds, can inadvertently whitewash your organization, because some skill sets are highly correlated with white, privileged backgrounds.

A good way to find hidden biases is to ask current non-white employees what barriers might prevent other people from their communities from landing jobs at your company, says Kenia Calderón Cerón with Coopera Consulting. In the case of people for whom English is not their first language, requiring perfect spelling could result in missing out on passionate employees, she says.

Click the image above to hear how we may be inadvertently introducing bias into our hiring practices.

Create A Productive Workplace For Everyone

Every decision made inside your credit union could alienate some members of your team, even if that is not your intention. Russell remembers an example of a mistake her DEI committee made when they accidentally scheduled an important meeting on a high Jewish holiday. In another instance, she learned that her office was not wheelchair-accessible when an intern couldn’t get from the lobby to the main office because there was no accessibility button. When she contacted Facilities, she was told the building was ADA compliant.

An attendee catches the ASK*terisk to ask questions from our speakers.

“We want people to see that diversity can be a solution, not a problem.”

Renee Sattiewhite

“That was a lightbulb for me that compliance does not always equal inclusion,” Russell says.

The design of the physical/virtual infrastructure of a workplace can have a huge impact on productivity for everyone, says Eleanor Forster with Leesman. According to a study Leesman conducted, organizations, including credit unions need to ensure that individual, focused desk-based work is well supported in their office design as this activity has a significant statistical relevance on whether an employee in is positive agreement that their workplace enables them to work productively. Recent office trends have prioritized group collaboration, but this needs to be balanced with supporting the individual or risk being at the expense of individual productivity, she says.

Leesman data shows that many of their high-performance workplaces are open plan with employees agreeing that their workplace enables them to work productively. But in these successful open plan workplaces, employees have more flexibility and choice. In a Leesman study of their high-performance benchmark locations, they saw that in unassigned strategies, employees actually had 20% more space per person than the high performance spaces with an assigned-seating layout. Variety seems to be the counter balance to a fully flexible approach. Leesman will continue to monitor this as they gather further longitudinal data.

Shatter Glass Ceilings

At the event, a panel of business, association, and regulation experts presented on the state of diversity in the credit union industry.

Samira Salem, senior policy analyst at CUNA, started off with some good news. In the credit union industry, 52% of CEOs are female, and there’s no evidence of a pay gap between male and female CEOs when you control for asset size. But, digging a little deeper, the data shows that women CEOs are more common at smaller credit unions; among credit unions with more than $1 billion in assets, only 14% of CEOs are women.

“There’s both good news and evidence that there’s still a glass ceiling and much more that we can do.”

Samira Salem

“We should acknowledge both the good news and the fact that there’s still a glass ceiling and there’s much more that we can do,” Salem says.

And it’s worse for non-white CEOs. Across the credit union industry, only 5% of CEOs are people of color, according to CUNA’s research. Renee Sattiewhite, executive director of the African American Credit Union Coalition, shared that among credit unions with more than $100 million in assets, there are only 12 African American CEOs, and only two of those are women.

To address these glass ceilings, credit unions need to examine their succession planning efforts and offer accelerated learning programs to underrepresented groups, says Lynn Heckler, chief talent officer with PSCU.

Ruth Cochran, a consultant with Korn Ferry, advises female credit union professionals to actively prepare themselves for C-suite roles. She says it’s important to gain experience on boards, as well as operational and finance roles, and to avoid getting siloed in HR and marketing.

“You need to be in a place where you can build credibility by showing numbers-based results,” Cochran says.

“I don’t want my 11 year old daughter to experience the things I experienced in the past 30 years being the only woman in the room.”

Lynn Heckler

Filene’s newest fellow, Quinetta Roberson, shared a glimpse into her research on inclusion in credit unions. One study she conducted looked at whether having racial diversity on leadership teams actually improves business performance, and how many members of the team need to be non-white to make a difference. She found that a board with less than 23% racial diversity actually performs worse than a board with no racial diversity. But a board with more than 23% diversity performs better than both.

“I call it the “we’ve got one” phenomenon,” Roberson says. “That person is always asked to be there on picture day, but is their unique knowledge and background really being integrated into the work of the organization?”

Report No. 494 12/19

Creating a marketing strategy that incorporates DEI can bring new members to your credit union, but it can also alienate your target audience without the right approach.

Incorporate DEI at Every Customer Touchpoint

Attendee asks a question with the ASK*terisk

“Don’t think of DEI and marketing as different. They are one and the same.” 

David Crockett
University of South Carolina

Your brand is more than just your explicit marketing messages, says University of South Carolina Professor David Crockett. Your brand is the message you communicate every time a customer interacts with you, even if you haven’t specifically planned out what that message is.

In the credit union world, brands have two choices for their overall strategy, Crockett says. You can choose to be a price leader, or to differentiate, and your choice will have implications for DEI. For price leaders the message is the same for everyone. If you choose to differentiate, then you need to consciously consider how you can specifically serve communities of color, in addition to the mainstream white audience.

Use Marketing to Reach New Audiences

If your goal is to diversify your customer-base, targeted marketing efforts can help you reach new audiences. But if you’re not careful, those efforts can alienate those communities.

Kenia Calderón Cerón of Coopera Consulting says she has seen brands’ attempts to reach the Latino community fall flat when they fail to establish trust.

“Just because you translate a pamphlet does not mean you’ll be good to me, that when I come in with an ITIN, your staff won’t look at me like I’m a criminal,” she says.

Filene’s Taylor C. Nelms says an easy mistake to make when trying to diversify your membership is to attempt to reach all communities with the same message, or to put together focus groups with perfectly diverse representation.

Crockett cautions credit unions to not assume the first or only way to engage with DEI is to diversify their membership. There are many other ways to engage, such as eliminating bias from your loan underwriting, or diversifying your board.

Understand how bias impacts your customers

Click to hear David Crockett, University of South Carolina, talk about how credit history brings in a history of discrimination.

Communities of color are often at a disadvantage for receiving credit because of historical inequality, Crockett says. The “three C’s” of underwriting — credit history, capacity, and collateral — are all impacted by the legacies of historical and modern discrimination in jobs, housing markets, financial services, and law enforcement.

“All else equal, Black and Latinx people lose in financial services,” Crockett says. “No evil intent is necessary.”

Monica Hughes Davy, with NCUA, says she is working to bring more awareness of these issues to the regulators who examine credit unions, so that credit unions don’t get penalized for lending to these communities.

Consider ITIN Lending to Grow Membership

Click to hear Kenia Calderón Cerón of Coopera Consulting, talk about how the conversation around DEI must also include immigration status.

Calderón Cerón encourages credit unions to open their doors to customers who do not have a social security number, but who do have an Individual Taxpayer Identification Number — known as ITIN lending. Receiving an ITIN loan from a credit union paved the way for her to apply for DACA and stay in the U.S. to attend college, she says.

“I belong to a community that is still being excluded from credit union services,” she says. “Even if they don’t have a social security number now, they could get one later.”

Report No. 494 12/19

Moving the needle towards a more inclusive and equitable credit union industry that welcomes members and employees from all backgrounds requires a careful approach to measuring progress.

Words Are Not Actions

Leonard Moore, with University of Texas at Austin, reminds credit unions that words of support are meaningless without action.

Leonard Moore, University of Texas at Austin

“If your political correctness doesn’t open up access, then we’re just engaging in an elevated form of intellectualism.”

Leonard Moore
University of Texas at Austin

“Many folks want diversity and inclusion as long as it doesn’t impact me,” he says. “If your political correctness doesn’t open up access, then we’re just engaging in an elevated form of intellectualism.”

Monica Hughes Davy, who heads up the credit union regulator’s DEI efforts, urges credit unions to dedicate time and resources to their diversity programs.

“No one questions the need for a CFO, but when it comes to diversity, we’re like, ‘Go get your certification or put together a council,’” she says. “Until every CEO believes this is important enough to have someone dedicated to this space, then they’re not putting their money where their mouth is.”

Credit Unions Need to Gather Better Data About DEI

Davy urges credit unions to fill out the Credit Union Self-Assessment and submit it to the NCUA to provide better data. Currently, less than 1 percent of credit unions have done this, which Davy suspects might be a symptom that credit unions are not proud of their progress.

Without those assessments, Davy says her only reliable data about gender in leadership comes from the salutation — Mr. or Mrs. — of the CEO on the profiles that credit unions submit to the NCUA.

“And if your CEO is a doctor, then I look at the first name and guess,” Davy says.

With better data, the NCUA could understand more about what the culture looks like inside the credit union industry, and could provide more support.

Taylor C. Nelms, Filene’s moderator for the event, says it’s important to not get stuck on the numbers when talking about DEI.

“Representation is an inadequate measure of progress on DEI,” he says. “There’s so much more we can do.”

Think Creatively About What Success Means

Inclusive marketing can lead to account growth from members of the target demographic, but that might not happen right away, Nelms says.

Quinetta Roberson, Villanova University School of Business and Filene's Fellow for the new Center of Excellence for Diversity, Equity and Inclusion

“It’s important for us to be pushing towards a conversation that is first about inclusion and equity and inequity. It’s about not just simply measuring the numbers on who is in your office.”

Taylor C. Nelms
Filene Research Institute

A marketing campaign could be successful if it simply helps identify community influencers who will help you build trust within that community, or who could one day serve as board members.

Credit union leaders must also seek out honest feedback from employees about the culture of their organizations. Davy says she gets a lot of questions from managers about diversity and inclusion, but they don’t often want to talk about equity.

“Most managers feel like they are crushing equity,” Davy says. “They’re the most fair managers in the world. But if you talk to their employees? Different story.”

Report No. 494 12/19