Clearhouse
Diversity and Inclusion is Shaping the Character of Heidrick & Struggles: Here's How
Publication Date: April 2, 2019 

Heidrick & Struggles (Nasdaq: HSII) is a global leadership advisory firm specializing in executive search, leadership assessment and development, organization and team effectiveness, and culture shaping.  The company is a pioneer in culture transformation and believes that an inclusive culture not only fosters innovation, but is also key to its ability to outpace rivals and create a competitive advantage.  Several years ago, Heidrick & Struggles made a commitment to build a world-class corporate culture that prioritizes diversity and inclusion.  Rick Greene, a partner at Heidrick & Struggles, shares the lessons learned in the process, along with some of the positive impacts a retooled culture is already having on the organization.

About four years ago, we began retooling the culture of Heidrick & Struggles.  We wanted to bring more women and other diverse talent into the ranks of upper management and ensure our client-facing consultancy teams were diverse.  We wanted a culture that was inclusive, so all Heidrick & Struggles employees felt welcomed and supported and motivated to be highly productive.

Our internal culture-shaping journey has been very eye-opening for us.  We have gained a valuable inside-out perspective of what it’s like to live through a corporate character change, and we are already finding that the investment we made has proven well worth the effort. Here are some of the most valuable insights we gained along the way: 

Our HR policies now reflect—and support—a diverse workforce.

At the beginning of our culture-shaping process we benchmarked ourselves, and part of that exercise included a survey of Heidrick & Struggles’ female employees.  That survey pointed us very quickly to the fact that some of our HR policies around parental leave, compensation, and performance management were at odds with our stated goal of being a leader in diversity and inclusion.  In some ways we discovered that we were actually behind the curve. 

That was a moment of self-awareness as a management team and as an organization.  It caused us to look internally and say, “We’ve got a real imperative to change here.”  We realized if we truly wanted to create a culture and environment that was diverse and inclusive, our HR policies would have to reflect that. 

Aligning HR policies with corporate messaging is a powerful sign that a company is serious about diversity and inclusion.  Employees immediately see through cultural window-dressing, such as putting up web pages and conference room placards that say nice things about diversity and inclusion.  Management actions and company policies have to visibly support those words.

That kind of authenticity is critical, not just to existing employees but prospective talent as well.  The internet has brought transparency to virtually everything a company does, including culture.  There are multiple websites where employees share what’s really going on internally at the companies they work for.  Prospective employees can research online and easily identify companies where they’re going to be most successful, where they’re going to get sponsorship, where they’re going to be dealing with people whose values match their own, where they’re going to have parental leave and other policies that are conducive to achieving professional aspirations as well as a work-life balance.

We brought more transparency to the compensation process.

An inclusive culture requires bringing transparency to the compensation process, so that diverse and rising talent feels compensation is fair and reasonable because they understand what the process is.  Employees don’t feel valued if the compensation process appears arbitrary—set by a group of people who do not know them, who aren’t particularly connected to them, and who don’t seem to be applying standard formulas with clear criteria.

Even in an industry like professional services, where compensation is largely formulaic and driven by production over the course of the year, there is still room for women to be at a disadvantage when it comes to compensation.  It’s important to ask the right questions when benchmarking the company’s compensation policies:  Are women getting the same commercial opportunities that their male peers are?  In negotiations, when two partners sell an engagement and the firm is going to get paid $100,000 for the work, are the male and female partners who sell that work together on equal footing in the negotiations for how credit for those fees gets allocated?  The answers to questions like these can guide necessary clarifications and changes to ensure compensation gaps are identified and eliminated.

The diversity of our leadership and consulting teams now reflects the aspirations of our clients.

Today, three of Heidrick & Struggles’ five executive officers (including our CEO) are diverse.  More than 50% of our board of directors is diverse.  Our management committee—comprised of key corporate leaders and senior partners who are serving clients every day—is 50% diverse.  During the past few years, women have been promoted to run our New York, London, and Paris offices – our 1st, 2nd, and 4th largest offices, respectively.   Our 3rd largest office, Chicago, is led by an African-American male partner.  Women lead our two largest revenue-producing practices: Technology and Financial Services.  Our chief human resources officer is a woman, chief marketing officer is a woman, and general counsel is an African-American male. 

These appointments have not only given women and minority professionals at Heidrick the benefit of personal growth and opportunity; they have accelerated our business case for internal culture shaping.  Heidrick now has an authentic, strong diversity story to tell when we have conversations about our firm, whether we are pitching prospective clients or recruiting the best talent to work for us. 

Our culture shaping process has accelerated decision making.

The culture shaping process begins with a discussion of the current purpose and values statements of the company, to the extent those are defined and articulated. The process itself includes a diagnostic of baseline culture, including what’s working, what’s not working, and how culture is linked to performance and the company’s aspirations.  Then the process pivots to defining a renewed statement of purpose and values for the organization.  Once purpose and values are in place as anchors, they almost inherently accelerate the work of management. 

One of the greatest moments for us when we went through our own internal culture shaping was that an immediate result was that we had a very clear purpose and a very clear set of values to guide us when making decisions.  Our culture shaping work has enabled Heidrick’s managers to say, “We can scrutinize the situation in detail, but let’s just ask ourselves fundamentally what decision in the situation best supports our purpose?  What decision in the situation best matches, and brings to life, our values?” 

Our culture nurtures a more growth oriented and development mindset.

Many organizations have a fixed mindset with regards to talent—believing employees either have it, or they don’t.  These “culture-of-genius” companies tend to worship top talent, leaving other employees feeling unsupported in risk taking and innovation and lacking a sense of ownership.  Employees become frozen into limiting views about themselves, about their team or function, about their customers, about the competition, and about the company itself. 

A big part of the culture shaping process is unfreezing people and getting them to think differently than they historically have.  When a company operates with a mindset that employees can grow and improve with new opportunities, good strategies, and mentoring, it allows a culture of growth and development to flourish.  Employees who are not locked into limiting perceptions of what they can and cannot learn or accomplish are change ready; they are focused on the future, on innovative solutions for clients, and on agile responses to the market. 

We also learned that culture shifts are seen before they are felt.

Leadership will look at the company’s organization chart and begin to see measurable progress in the number of women and other diverse professionals represented, but the impact of those personnel changes on day-to-day culture may take some time to cascade throughout the organization.  For all of the effort and investment and honest good intent that goes into culture change initiatives, the personal experience of many employees is going to lag behind the initial execution.  If inclusion surveys aren’t glowing immediately, it likely reflects that lag and is not necessarily indicative of a failed attempt at culture change. 

This mission was personal for our CEO, Krishnan Rajagopalan. Krishnan has unique insight and empathy for what it means to be successful as a diverse individual over the course of a career.  Diversity and inclusion has always been very personal for him, and Heidrick’s employees feel that.   In fact, Krishnan raised the visibility of Heidrick’s commitment when he signed a pledge with Paradigm for Parity, publicly committing our firm to achieving gender parity by 2030. 

We learned first-hand that when company leaders are visibly committed in both word and deed to a culture of diversity and inclusion, they will accelerate the process of culture change.  When the board, the CEO, and top management actively participate in efforts to improve diversity and inclusion, it really makes a difference.  It makes a difference in terms of how people show up.  It makes a difference in terms of who shows up.  It makes a difference in terms of who leads.

For more on this topic, listen to a replay of a recent webinar, Diversity Laws Are Here: What Can Boards Do to Prepare? >>  

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Heidrick & Struggles (Nasdaq: HSII) is a premier provider of executive search, leadership consulting and culture shaping services worldwide.  Richard “Rick” Greene is a partner in Heidrick & Struggles’ New York office and a member of Heidrick Consulting and the Financial Services Practice. From 2015-2018, he served as Heidrick’s chief human resources officer and was a member of the Management Committee. An active champion of diversity and inclusion, Rick created the Accelerating Women’s Excellence (AWE) leadership development program at Heidrick, for which he remains executive sponsor.