In October alternative asset manager Carlyle Group hired Kara Helander to the newly created position of chief diversity officer.
Helander, who spent 10 years as managing director and global head of diversity and inclusion at BlackRock, was brought on to lead the firm’s inclusion efforts in-house and to promote more diverse boards at portfolio companies.
“A diverse and inclusive culture is a competitive advantage that enables us to attract strong talent across geographies, strategies and functions,” co-chief executives Kewsong Lee and Glenn Youngkin said in a statement announcing her appointment.
Helander’s hire comes as diversity is moving up the agenda for both GPs and LPs.
We asked Helander why diversity is such a challenge for the private equity industry, and for her to share some advice for creating and sustaining a better workplace.
What does Carlyle mean by ‘diversity’ and how will it be measured?
Fundamental to Carlyle’s success is being able to see opportunities and seize them. Cultivating a diverse and inclusive workspace is one such opportunity. Teams that are diverse and inclusive can tease out ideas from different angles and use different models and approaches to assess them.
But, it is important to define diversity such that it encompasses the meaningful differences that will enhance our business. And, it’s not just gender, it’s not just race. This opportunity is about bringing in a diverse set of experiences, backgrounds, and expertise to help us make the most informed and best decisions.
We definitely are measuring the things you would expect: gender, race and ethnicity, age. As we evolve, we will measure additional dimensions such as LGBT status, educational background.
Diversity measurements of gender, race and ethnicity can be thought of as early indicators of how well you’re doing with diversity more broadly, similar to the way we use blood pressure as a proxy for heart health. There are many other dimensions you’d want to measure to have a robust view, but gender and racial diversity provide a solid initial read.
It’s also important to measure leading indicators not just lagging indicators. Many organisations pay attention to gender and racial representation at various levels. However, it is also important to pay attention to measures such as, do you have career development plans in place for all of your diverse talent inside your organisation? Are you cultivating diverse candidates for the roles that you have open? Are you adding diverse professionals to the personal-professional networks of leaders in the firm? This is, like any business, a very relationship-driven business and people go to the circle of people that they know first – so the question is, “Can you diversify that circle”?
There’s a lot of focus on diversity during the hiring process, but inclusion often gets left behind. How should the industry be thinking about inclusion?
It’s absolutely critical. You can put a huge amount of effort into recruiting a diverse set of professionals, but if you don’t have an inclusive culture, they’re not going to thrive and you’re not going to get the best out of your teams. It’s critical to build awareness and an understanding of the steps every individual can take to create an inclusive culture and then support and encourage intentional action to that end.
This is a newly created position. What drove Carlyle to make this a full-time, dedicated role, and why did you decide to join the firm?
A couple of things convinced me to move my family across the country from the San Francisco Bay area to Washington DC to work for Carlyle: one, the firm has already made a strong start and some great progress in building a diverse and inclusive leadership and culture. The other piece that clearly attracted me to Carlyle was the opportunity to work with CEOs who are wholeheartedly committed to this and see it as a critical part of evolving and driving success for Carlyle. The third reason was the remit. I have the opportunity to work on Carlyle inclusion and diversity internally as well as helping to diversify the boards of our portfolio companies. That presents an extraordinary opportunity to have an impact on business and the broader society given.
Why is PE so far behind other industries?
This is a relatively young industry. When industries are just starting, people tend to rely on and draw from the circle of contacts they know. That perpetuates very similar profiles inside organisations.
Private equity is also very much an apprenticeship business. People come in at very junior levels and grow from within, and that limits the ability to bring in expertise or experience that is more diverse.
What initiatives have you found effective in the past that you hope to implement at Carlyle?
Right now, I’m getting the lay of the land. In the last five years, Carlyle has done some great work on inclusion and diversity, so there is a strong foundation to build on. I can tell you that we will continue to focus on metrics. They determine where you need to improve; they help monitor progress; and they strengthen accountability.
However, metrics alone are not enough. They represent one of four key ingredients to driving progress in inclusion and diversity. Unambiguous leadership commitment is essential. Without it, progress is an uphill battle. Another key ingredient: a compelling explanation of why diversity and inclusion is important, so people across the firm understand “what’s in it for me” and are inspired to change their behaviour. And finally, education combined with tailored reinforcements ensure that everyone knows the steps they can take in their day-to-day.
A great example of a practical step people can take, and something that has been enormously successful in my experience, is targeted sponsorship. At BlackRock that was something that certainly had a profound effect on the diversity profile of the firm and so I suspect we will be using that at Carlyle.