There are myriad reasons why Royal Bank of Canada is so successful. Its balance sheet is strong, it has leading market share in all of its business lines—from banking to insurance to wealth management to investment banking—and, at a time when many of its competitors are retrenching, it continues to invest in new products, services and markets.
But not to be overlooked as a contributing factor is the diversity of its workforce. Canada's largest banking company actively targets new immigrants, women entrepreneurs, Canadian Aboriginals, the gay and lesbian community and people with disabilities, and Chief Executive Gord Nixon says the key to reaching these audiences is having a workforce that mirrors their cultures.
Of the more than 21,000 people RBC has hired since 2006, 52 percent have been women and 26 percent have been "visible" minorities. It also actively recruits immigrants and has some 2,600 interpreters on call to help translate 180 different languages, including indigenous Canadian languages like Cree and Inuktitut.
"There's no reason a man can't do a better job of serving a female customer, or a Chinese Canadian can't do a better job of serving an East Indian customer," Nixon says. "But as an organization, we need to ensure that our makeup reflects the overall makeup" of the customer base. "It just makes good business sense."
Nixon has long been a champion of diversity; one of his first orders of business when he took over as CEO nine years ago was establishing a diversity council, which he still chairs.
With Canada becoming more ethnically diverse and the company itself expanding globally, RBC sharpened its focus in 2005, embedding objectives into its hiring and promotion practices to require that every slate of potential managerial candidates includes a woman, a minority or both.
The results of the initiative have been impressive.
Women now hold 40 percent of the executive positions at RBC, up from 35 percent in 2005, and minorities hold 14 percent, up from 5 percent. Perhaps most notably, three of the nine executives who report directly to Nixon are women and two of them, chief financial officer Janice Fukakusa and human resources chief Zabeen Hirji, are minorities.
RBC's commitment to diversity has won the company acclaim. It is routinely honored as one of Canada's top employers, it's been named a "best place to work" for gays and lesbians and working mothers, and in 2008 it was recognized as having one of the most admired corporate cultures in Canada.
The most recent honor came in March, when Catalyst Inc., a leading organization promoting the advancement of women in business, named RBC as one of its four award winners for 2010. (The others were Deloitte, CampbellSoup and the Australian telecommunications firm Telstra.)
In summarizing its selection, Catalyst said RBC "has truly become a model for diversity and inclusion both inside and outside its workplace, and has emerged as an industry leader by tying the unique perspectives of diverse groups directly to its global business strategy."
That's not to say that diversity trumps talent. Hirji says that while RBC has clear goals-the embedded objective is for half of all new executives to be women and 20 percent to be minorities-"we aren't going to put an unqualified person in a job."
What the company encourages is for hiring managers to think creatively. Say, for example, a minority vying for a branch manager position in an ethnic neighborhood doesn't have the necessary technical skills for the job but speaks the language and understands the community's culture. When making the hiring decision, department heads are urged to take into account such things as how much business the less-seasoned candidate can bring in.
"Financial services is a business of trust," Hirji says. "That's what you need to earn people's business." The technical skills, she adds, can always be taught.
RBC is also big on coaching. If promising female or minority candidates are passed over the first time around, they will often be paired with mentors who can assess their strengths and weaknesses so that they'll be better prepared the next time.
Fukakusa, the CFO, says mentoring programs are particularly important because they keep department heads focused on the company's diversity objectives."What gets measured gets delivered on," she says. "If we see people that are coming up short, we work to understand how to make them more competitive for these roles."
They also help guard against complacency. "When it comes to actual decision-making," Nixon says, "there are these unintended biases where people feel more comfortable surrounding themselves with familiarity."
Nixon, who also co-chairs the Toronto Region Immigration Council, speaks often to business groups on the topic of diversity, and his message is consistent: Hiring and promoting more women and minorities is not just the right thing to do, it is good business.
From a recruitment standpoint, Nixon says RBC's reputation for inclusiveness goes a long way toward helping the company attract top female and minority talent.