Diversity: By Revelation or Revolution

Stewart: Welcome to another edition of the Insurance AUM Journal podcast. My name is Stewart Foley. I'll be your host and I am joined today by the co-founder of the DIME program, Dion Woods. Dion, welcome.

Dion: Thank you very much. Today was a pleasure to be here.

Stewart: This is a good one, man. This is a very important topic. I think what you're doing is amazing. There's a lot of discussion about diversity, equity, inclusion and belonging. It's a big deal for us, and there's a lot of folks talking, but you are doing. So can you talk about the DIME program?

Dion: Sure. Yeah. DIME stands for diversity, investment, management, engagement. We're actually a little new. We started in 2020, really on the heels of a lot of the unrest in the country, following George Floyd's murder. We sat around and a lot of things were being torn down in the country. I think some things rightfully needed to be. But at some point we began to ask ourselves, what are we going to build? And equally important, what can we build together?

And so we looked in the industry, the investment management industry, the financial services' industry and it didn't take long to realize that this is an area where we can build something meaningful. There are certainly players and folks who have been in that industry trying to build and trying to create a more inclusive environment. But the DIME program has been centered primarily on trying to build a sustainable pool of minority investment talent for the future. That's where we focus on spending our time, trying to build that future pipeline. It's been exciting.

Stewart: It's interesting to me how quickly, I know you say you're new, but you've done a lot. I mean, how did we get here? Why has it taken so long? I mean, I got a zillion questions for you, and, for full disclosure for our audience, you and I talk for like an hour nonstop and I'm like, "Okay. We're going to do a podcast. We're going to do all this again." So how did we get here and why did it takes so long?

Dion: Well, we got here because change was needed. I believe that change happens in an organization or in a country because of two reasons, change by revolution and change by revelation. If you look at all the big changes that have happened in our country, revolution has been the primary tool to foster change. It's not that these things weren't needed, it's just that for whatever reason the powers that be that control a lot of the organizations and the monetary flow in the country, and just in general, it requires a shake-up. That's what we had.

I think that if you looked after the George Floyd's murder, there was a revolution. The revolution was, hey, we've got to change things. We have to be more equitable in decision-making. We have to be more inclusive. The challenge with change that comes by a revolution is that it's incredibly costly. It costs a lot. I think we're still bearing the cost of that revolution now.

But to the industry's credit, we're also seeing change happen now by revelation, because now the industry is recognizing, okay, this is not just the right thing to do, but this is actually a beneficial thing to do. We can actually improve outcomes for clients, for our firm, for the folks that we work with by being more inclusive and intentional in our decision-making. So we got here by way of revolution, but where we're going to go, it has to be because of revelation. That is, we understand that we can't continue to play with half the deck.

I think when you and I were talking, I used an analogy and I said if you and I were playing cards and I had three quarters of a deck, I might still win, because I can become very adept and very good at playing with three quarters of a deck. Well, wouldn't it be better for me and maybe wouldn't I have better outcomes if I played with a full deck? The investment management industry and other industries for that matter have been playing with three quarters of a deck, and what we're trying to say is “Hey, let's be more inclusive.” Let's add more cards to the deck, and let's create better outcomes for all. And so I think that's how we got here. We got here by revolution, but where we're going to go is going to be as a result of revelation, that we can do better and create better outcomes for all.

Stewart: I think a lot of people feel like I'm going to hire a diverse workforce. Somehow or the other I'm accepting subpar talent. Whether people say it or they don't say it, I think that's true. I think your point, that analogy is a very good one. Randy Lauer, who's a good friend is now the head of distribution at Academy Securities said the most diverse enterprise in the world is the United States Armed Forces. They use diversity as a strength.

I think that when I did my graduate degree, some of that was involving international students. What I found was that, I thought that everybody approached business problems in the same way, but they don't, right?

Dion: Right.

Stewart: I mean, as an American, I had my approach, my classmates generally had that approach. When we were in Singapore, some of the folks in the Asian cohort, they came at things very differently. And so to your point, that gets you to a better outcome. I mean, ultimately more viewpoints get you to a better outcome.

I've certainly got my idea of what diversity, equity, inclusion, and we like to include belonging, because a diverse class where people don't feel like they fit in is no good. But what's your definition of diversity, equity, and inclusion?

Dion: Well, let me go back for a second because you hit something that is really, it's a little challenging to talk about. Anytime you invoke race and ethnicity to any discussion, walls go up, right?

Stewart: Absolutely.

Dion: People are not allowed or given the freedom to make a single error. We're all working through this. And to the extent that I say something wrong, there's this perception that I'm painted with this very negative brush. And so I want to go back to a statement that you made about diversity implies for some people that I'm accepting subpar talent. The ideal of raising that is a valid point. So if someone is an employer and they're like, “Hey, I'd like to get some diverse talent, but I'm just not seeing the level of skill and experience that is needed,” that's a fair discussion to talk about. You're not a racist, if you think that or you want to discuss that.

And so part of the reason why we started DIME is to help address that issue. Listen, what we're saying is that, and to your point about what is DE&I, affirmative action is about, “Hey, let us be on a team because we think we can contribute.” DE&I is about we're on a team, but we want to be in the game because we could actually help this team win, right?

Stewart: Absolutely.

Dion: But you've got to be able to play the sport to be in the game. You need to be able to play the sport to be on the team. So there has to be an investment period into communities of color, into minority communities, so that the natural innate skill and ability and perspectives that they have can be fine-tuned and honed and be beneficial for the team. So, you don't have to accept less just for the sake of color. That's a poor decision. That's not going to create a better outcome. That's just going to create a negative outcome that looks colorful.

So I don't think you have to miss the standards, but what we do recognize is that we have not invested in this area for decades. And so how should we expect to have outsize returns when we've never made the investment? Our focus is working with 11th and 12th grade high school minority students, giving them the fundamental underpinnings of what investment management is, how wealth is created, risk in return. As we begin to do that and introduce these topics in their households where maybe it has not been discussed, bills can be discussed, struggle can be discussed, but wealth creation might not be. And so, by the time they get to college, they have a very solid footing on what investment management is, the dynamics of our capital market system. And then from there, we can build incredible things so that when an employer is looking for talent, the idea about them not being qualified is not even an issue.

Stewart: Your point about race and ethnicity being the third rail is so true. I think just having a functional conversation about it, I just think it's just helpful. Now, we talked a little bit and I want to ask you about the focus on what you're doing on the wealth gap. I'll give you what I believe is another common... not necessarily misperception, that a diverse group, like there's a socioeconomic differential in many minority communities, does that wealth gap, and you touched on it, that wealth creation is not a topic of conversation in many households. This is going to be a nightmare of a question. How do you address the wealth gap? Are there considerations that companies who want a more diverse workforce should be considering that would potentially help a candidate from underrepresented groups have a better chance for success in that organization?

Dion: So, we have a theory and that is, obviously, there's been a lot of numbers about the wealth gap in our country. White Americans have 8 to 10 times the wealth of African-American, Hispanic households. We talk a little bit about that. It's a difficult conversation because sometimes, look, everybody's out, you're working hard. Now, people are struggling to get ahead. And, you throw those statistics around there, some people are like, "Yeah, I don't see the difference, you've been to my house?" So I think everybody has a viewpoint that I think is relevant. And so we're not trying to take from one to give to somebody else. We're not communist. So it's not just a socialistic view where we say, we're going to take from you because you have eight times more and we're going to give to this person because they have less than you. That's enough.

Stewart: Right. It's not a wealth redistribution strategy. Absolutely.

Dion: Absolutely. Sometimes we pitched as such. But, I think that if you look at the wealth gap in this country, it's very similar to the problems that exist in the financial services' industry. Something like 2% to 4% of all asset-based roles in the investment in financial services industry are held by people of color and minorities. So it's a fraction. At the C-suite level, they barely exist. It's been our hypothesis that the lack of representation of minority talent in the investment management industry is directly correlated with the lack of wealth in communities of color, that if we're not developing and mentoring financial advisors and teaching wealth and having minorities be involved in wealth creation and supporting that, then having that manifest in the communities in which they live and their families live becomes problematic.

And so, we focus on building and teaching and growing our students relative to wealth so that they can come into the industry, and indirectly the knowledge that they gain feeds back to their families and the communities, and it indirectly impacts the wealth gap. And so, it's a long-term process. Obviously it's not overnight. I think sometimes these situations we want a quick solution. The problem with a quick solution is it comes with a lot of risk. That's one of the first things you learn in investing, that the moment you reduce time you increase risk. And so, how do we change 100 year problem overnight without injecting a lot of volatility in that process? Our challenge in this nation and everywhere else for that matter is finding the appropriate glide path to make that change without creating so much volatility that we're destroyed in the process.

Stewart: One of the things that really impresses me about talking with you is that you have been really thoughtful about this problem and ways to address it that are pragmatic and that work. I'm expecting you at the end of this podcast to announce your candidacy for something, because you've got my vote. I'm just telling you. Can you talk a little bit about what the 3T model is that you use at the DIME program?

Dion: Yeah. One of the things we say, and we've been so blessed to have amazing partners who've come alongside, and not only in their own firms, but just generally recognize this is a problem that impacts everyone and we can create better outcomes by supporting DIME and really building this next generation of minority investment talent, giving minority students the tools to create long-term wealth.

So to do that, one of the first things we have to do is we have to change our mindset. It's very easy to almost, if you're not careful, it's easy to equate these initiatives to feeding children in Africa. It used to be when I was growing up, you'd see late night children in Africa starving and you'd see bloated bellies and flies, and it would appeal to your sense of humanity and there'd be this emotional response to reach out and help because it's an act of charity. It's an act of love and decency.

I think that if we're not careful, we can almost use that same kind of approach when it comes to DE&I initiatives, oh, these poor African-American, Hispanics who just aren't given an opportunity, let's help them. That is human and great because of the disparity that we've seen. But this is not a charity, this is not giving to the poor per se. What we're doing is we're trying to change the outcome that can be produced in our industry and the outcomes that can be produced in our country by making an investment.

So, our 3T model is to really make a change you need to invest your time, your talent and your treasury. And so that's what our partners do. They give their time. They spend five or six hours each semester with our students as we teach this curriculum. Our curriculum, our students are taught by people in the industry who are doing the job, they give their talent. And so, if you're a ESG equity analyst, then you're coming in and you're talking about the impact of ESG on investing. We're talking crypto, we're talking and explaining and sharing that insight. And then they're giving money, because these programs require money in order to run.

Our organization, we don't have any paid staff at this time. It's all volunteer. All of our money that we receive goes directly to our students to help administer our program and get them into college. We're excited because we've been around now for a little over two years. Our first class is graduating in June of this year. We'll have 10 students who have been with our program for two years.

So, each of those students, each one of them will be given a $1,000 investment, a mutual fund account. Because remember, for the last two years we've been working with them on how to build wealth. They understand that this is not to go out and buy Nike sneakers, this is, think 20, 30 years. Make your investment. We showed you how wealth been created, but you're going to need a vehicle to get there. We're going to fund that vehicle, but because we believe in you. And you've done the heavy work for two years.
And then the last piece is that we're giving $30,000 in scholarships to those students who are interested pursuing a career in the investment industry. And then we hand off these students to amazing organizations at the college level who are working on, focusing and helping them get internships and get into the industry. So we're an important feeder program. So the 3T is time, talent and treasury. That's how we make a change.

Stewart: I couldn't agree more. I am going to lean on some companies and some folks at the end of this podcast to warm up your checkbook. You and I hope, we're going to riff a little bit on this next question, because I think that we feel the same way. What excites you most about young people today?

Dion: I think I've been working with young people all my life. I used to teach a youth group at church, and this generation is amazing. A lot of what we see today happening because of DE&I happened in part because of young people. This generation is amazing. So, they're huge risk takers for one.

The other thing is that, what's amazing about this generation is they are unashamed and certainly not afraid to tear down traditions if they don't believe that those traditions are helping for a better good in the end. So that kind of energy, that kind of one resilience and this willing to go against the grain can be incredibly important and helpful in building new industries, new technologies.

I mean, think about all the technologies and things that are going on today, in part it's because of the excitement and the energy, the hopefulness and the vision of this group of young people, they take no prisoners. They're like, "I don't care if you've been around for 100 years and your family crest says this, that doesn't faze me. I'm going to do something different." Now look, that kind of energy can be valor. It's like nuclear, right?

Stewart: Exactly.

Dion: A nuclear plant can power up a community or can destroy the world.

Stewart: Yeah, exactly.

Dion: In some ways this generation is like that. So, you need the help of seasoned people who've seen things to help them. Listen, we're around roads and we've never been down. We're talking crypto and blockchain technology. You talk to somebody who's 50 years old, they're like, "What is that?" So we might not know it, but listen, I don't care if the road looks new, a pothole is a pothole, and whether it's sitting on an old pave road or a super highway, I can tell you that it’ll tear up your car.

So if we can come alongside and help and mold shape and guide and mentor these young people, the energy that is inherent and the hope that's in them and the excitement that's in them can be harvested to create amazing results, but we've got to come alongside and smooth the edges and help give perspective of history. Everybody's gone out and bought Bitcoin, for example, believes that it's going to continually go up, and it might, but it will also go down. So, understanding that only is appreciated when you've been through periods of downturn.

Stewart: Here's my deal on young people, man. I'm 57, and you're right about me and crypto, you're guilty as charged. I'm like, "What?" But I am very bullish on this generation. And this generation has gotten a really bad rap, but there are countless students that I was so impressed with them, not only as good smart students, academic performance, but also as people, good character, making the right decisions, helping other people, this generation does not see color in the same way that other generations have. They're more tolerant toward sexual preference or gender or whatever it is. It just doesn't bat an eye with... I would not have done well had I had to compete with that level of talent when I was applying for college and whatever.

I mean, my daughter's 16, she's in high school. She is so much smarter than me and so much further along than I was at the same time. I think that young people have innovative ideas. I love what you're saying, I was intimidated as a first generation college student from a modest area in rural Missouri that was not progressive in any of its views, that I didn't belong in those big financial institutions. I didn't even know where to begin. I think that today, I cannot say enough, how much respect in regard I have for you because you have done this on your own volition and time, and you've done amazing work. I really commend you for that. What is on the horizon for Dion Woods and the DIME program?

Dion: So, the sky's the limit. And in part, it's going to be dictated by the students that we work with. They are the driving force of the vision of what we do. As they bring new ideas, we do amazing stock battles on social media. That's a way for us to socialize the importance of understanding how to take a risk and how to make a financial decision that is based on information, it has to be quantified.

I think the next step for us is that we try to identify high-achieving minority students for our program. Indirectly that influences them in helping them in their communities. But I think the next steps for us is that we want to get into financial reporting. So, partnering with organizations that report on financial news. We want to try to help those communities and adults who often don't know what's going on financially themselves. So we're almost like adult education classes for them. I think that's important, but ultimately we want to work and really building that pipeline. We got to really spend some time there, find the right students and just send dozen and dozens of students to the industry who are equipped prepared.

The question about whether or not they're smart enough and they're intelligent enough is not even a question. We don't care about that. The idea that some people said color, why even look at color? Everybody looks at color, but you should not be judged by color, we're all different, we're made that way different. But the question is, am I being judged wrongly because of color?

And then the other piece is mentoring. You can be on the team, but in order to get into the game, you have to be able to navigate that cultural relationship with the people who are already at those levels. Mentorship is really big. So that's how we want to really grow, mentor these students as they get to college. And then once they're in the workforce, using them to feed back into our program and to bring the next generation up.

Stewart: I will relate this experience I had, I've taught for six years at Lake Forest College. I taught also afterward at Northeastern Illinois University. I can tell you firsthand that nobody needs to put their thumb on the scale for the students that I had from underrepresented groups. They were very good students, very hardworking. What they didn't have is awareness of the opportunity set, what I used to call turning the lights on the playing field. You can certainly get the light out on your phone and look around one square foot at a time, but why don't we just show you what the playing field looks like? Where's the sideline? What counts? What's the points and whatever, because I think these folks have the intellectual horsepower to compete with anybody anywhere, anytime. That's my view of it.

So I'm going to get on my soapbox because I've never done this before on a podcast, but I'm going to get on my soapbox and I'm going to tell it I see it. If you're at a major corporation or an asset manager, the insurance industry in the United States manages nearly $8 trillion. There are some massive insurance companies and some small insurance companies that listen to these broadcasts. There are asset management firms. There's over $20 trillion on our platform alone.

A lot of folks talk about wanting to focus their resources and efforts for diversity, equity, inclusion and belonging initiatives. If you've listened to this podcast and you can't get behind Dion Woods in the DIME program, I don't know what else, a better way for you to spend your money. So get out your checkbook and send an email to dwoods@dime-program.org. Dion Woods, his email is dwoods@dime-program.org. We're going to have it on the podcast link. Warm up that checkbook.

If you can't write a check, how about being a mentor? How about doing that and getting in touch with the DIME program and really get behind this effort? Because Dion, you are getting real results. You have a very thoughtful and just a terrific approach. I just want to thank you for being on and I hope you'll come back.

Dion: Thank you Stewart, it's been a pleasure. I really enjoyed it. Looking forward to working together again in the future.

Stewart: Absolutely. Congratulations. If you have ideas for podcast, email us at podcast at insuranceaum.com. My name is Stewart Foley, and this is the Insurance AUM Journal podcast.

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