…First, an inclusive culture where everyone feels a sense of belonging will see significantly higher levels of employee engagement. We see this at Prudential through the data we capture on our own employee sentiment. And stronger employee sentiment leads to greater employee retention. Turnover, as anyone will tell you, can be a huge drain on resources if you’re constantly looking to recruit, train and retain new staff.
As a part of our series about “How Diversity Can Increase a Company’s Bottom Line”, I had the pleasure of interviewing Lata Reddy.
Lata N. Reddy is senior vice president of Inclusive Solutions at Prudential Financial and chair of The Prudential Foundation. In these roles, Reddy harnesses the power of capital markets to drive financial and social mobility. By combining diversity strategies, impact investments, philanthropy, corporate contributions and employee engagement with Prudential’s full business capabilities, she helps position the company to promote inclusive economic opportunity and sustainable growth.
Thank you so much for doing this with us Lata! Before we dive into the main part of our interview, our readers would love to “get to know you” a bit more. Can you share a bit of your “backstory” with us?
I went to law school because of my interest in social justice. I had the chance to intern with justice advocate Bryan Stevenson, whose memoir became the 2019 movie “Just Mercy.” I was working with individuals who were incarcerated and on death row. That experience shaped my life in many ways. When I graduated, I started as a civil rights attorney, focusing on bringing high-quality education to all students, and I loved it. It checked all the boxes for what I wanted in a career — for a few years. Then I realized that I ultimately couldn’t achieve my mission by working on one case at a time. I wondered: How could I get to the underlying, systemic issues of civil rights challenges?
A friend suggested philanthropy and when I heard about an opening with The Prudential Foundation focused on transforming education in Newark, I had to apply. I didn’t know anything about working in philanthropy, or corporate America, or Newark. But the hiring manager took a chance on me based on my legal background, and I’ve been doing this type of incredible work ever since.
Can you share the funniest or most interesting story that happened to you since you started your career? Can you tell us the lesson or take away you took out of that story?
Early in my time at Prudential, one of my responsibilities was to run our matched giving program, where employees could submit charitable donations and Prudential would match them. Back then, we had a much broader set of criteria for what could get matched, so employees got creative. One day I heard from an employee who had donated their horse to a nonprofit and wanted us to match the value of the horse. I spent hours of my life I’ll never get back finding someone who could essentially appraise a horse. I guess I’ve blocked out the amount we matched, but I do remember that we changed our giving criteria soon after that. The lesson: Expect the unexpected, because every day at work brings a new adventure!
Can you please give us your favorite “Life Lesson Quote”? Can you tell us a story about how that was relevant in your own life?
A friend told me when I first started at Prudential: “Remember who your friends are.” I took it to mean, be humble. When you’re in a role where you’re responsible for allocating money and resources to different causes, you can feel like the funniest, smartest, best-looking person in the room. And his point was: Don’t be confused. It’s never about you! It’s about your important work. So that was very grounding advice for me.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are?
My dad, Nallapu Reddy. He grew up in extreme poverty in rural India, in a society where being poor meant being marginalized. My father could easily have gone down a different path, but many people extended help at critical moments. This enabled him to pursue his dream of an education which he knew would open doors of opportunity. He went on to become a professor of economics and chair the Economics Department at the University of Michigan-Flint. It was there he spent his career educating first-generation college-goers like himself.
My father taught me what it’s like to face systemic barriers and what it takes to overcome them. It takes hard work, sure, but it also requires people who believe in you and recognize your humanity. His experience is part of what fueled my purpose to eliminate systemic barriers and help level the playing field.
What do you think makes your company stand out? Can you share a story?
While others might also tell you this, our commitment to our stakeholders is truly unique, and that begins with the people of Newark, New Jersey. We have been committed to Newark — one of the most diverse cities in the nation — since our founding in 1875. While many fled following social unrest in the 1960s, we chose to stay and committed to do even more to close the racial wealth gap. We pledged to use all of our capabilities — through the full strength of our people, purchasing power, relationships, grants and investments — to help the city not only weather tough times, but build lasting resiliency. We’ve got a team of 45 full-time associates dedicated to our work in Newark. We engage with the community to help create the solutions they want to see. We’re in it for the long term, and we take pride in that.
Of course, there are also times of crisis that require immediate action. This has been especially true during the pandemic, when small businesses and residents have struggled so deeply. Prudential has waived rents for many of our small-business tenants in Newark. We also provided funds for laptops and Wi-Fi hotspots, and IT support for Newark families and students navigating the challenges of a remote learning environment.
But ultimately, our goal is to help to create a vibrant, thriving, livable, 24/7 city through a deep, longstanding commitment.
Are you working on any new or exciting projects now? How do you think that might help people?
How to measure the business impact of addressing societal challenges is very difficult. So I’m really excited about new work we’re doing to create a measurement and learning system to help us understand, with precision, what it takes to drive innovation for social and business impact. We’re building a completely bespoke framework that we can use to evaluate our efforts and determine whether it’s leading to change.
The racial wealth gap is a good example. That directly connects to Prudential’s purpose, which is to make lives better by solving the financial challenges of our changing world. We start by asking ourselves: What are the components of the racial wealth gap? Things like lack of quality affordable housing. Lack of high-quality education. Lack of pathways to quality jobs. Then we determine if we can play a meaningful role in those areas or help to plug a gap that others can’t. In some cases, it will be through a financial input, in other cases it will be through our own people, or a product or solution, or creating access to a specific industry. All of this will result in a variety of outcomes that we want to be able to measure with confidence. Sometimes we will have a demonstrable financial impact. Other times we will have an intangible impact — for instance, on employee engagement, which leads to productivity, risk mitigation, reputation and brand building. And then others will be almost entirely for societal benefit, but which are also vital to how we sustainably operate.
We are at a critical moment in history for this type of work. There is more buy-in and momentum than I’ve seen throughout my career. But we need to be precise about where we are directing our resources so that we can truly create lasting change. This work isn’t easy, but it is so important.
How have you used your success to bring goodness to the world?
Everybody has a role to play, but I have found that the best way for me to contribute is to bring my personal purpose to the work. I try to use my privilege and my success to create pathways to opportunity. I’ve benefited from my parents, who had an extraordinary story of sacrifice and success. I feel a connection to the idea that “To whom much is given, much is required.” I’ve been fortunate that I have this large platform with which to try and bring goodness into the world, practically every day.
Ok. Thank you for that. Let’s now jump to the main part of our interview. This may be obvious to you, but it is not intuitive to many people. Can you articulate to our readers five ways that increased diversity can help a company’s bottom line. (Please share a story or example for each.)
Increased diversity on its own won’t impact anything. Inclusion is a necessary precondition, and equity is an essential component. All together, they must be ingrained into every aspect of a business’s activities to get true bottom line results. This plays out in multiple ways:
First, an inclusive culture where everyone feels a sense of belonging will see significantly higher levels of employee engagement. We see this at Prudential through the data we capture on our own employee sentiment. And stronger employee sentiment leads to greater employee retention. Turnover, as anyone will tell you, can be a huge drain on resources if you’re constantly looking to recruit, train and retain new staff.
Second, diverse teams help companies improve the quality of policies, programs, and products. Individual’s lived experiences bring unique perspectives that round out how ideas are generated. We have connected our business resource groups (volunteer employees who are members and allies of various diverse communities) to various projects to help inform things like the employee on-boarding process and the ideation of new products and solutions. Through this connection, we can focus on the “moments that matter” for a broad group of employees and customers, something that’s only possible when you solicit a range of diverse perspectives.
Third, embedding an inclusive mindset can generate innovative approaches. As part of our company’s ongoing transformation, we asked all our employees to submit ideas to fuel our initiatives. We are embedding inclusion and racial equity from the moment those ideas are submitted into our idea portal. This will help us to develop products and solutions that can meet the needs of diverse customers, which leads to higher customer satisfaction and retention, and greater product adoption. And by designing products with relevance across customer groups we can enable greater financial inclusion and address systemic societal issues.
Fourth, authentic and deep-seated inclusion creates brand and reputational value. Increasingly, companies are being judged on how they engage on social issues — particularly over the course of the past year — and how they are embedding DEI into their business. In some cases, we are even being ranked against our peers on this. Anecdotally, we know that many people join Prudential because of how we show up in this space. Similarly, it’s important to customers who want to do business with companies that align to their values. To generate that brand and reputation value you must walk the talk. For example, this past year we have been embedding racial equity commitments into our talent practices and have been transparent with our employees and the public on how we’re working to level the playing field with our hiring and promotion processes. This helps us retain top talent, who then generate innovative ideas and do great work for the company. It’s a virtuous circle.
Lastly, taking inclusion outside our four walls and into the communities where we operate creates huge upside in terms of growth and prosperity. Our global headquarters is in Newark, NJ where we have been heavily investing to help close the financial divide and create opportunities for diverse business owners and residents. We have a symbiotic relationship with the community — if they are thriving and prospering, we too can thrive and prosper. As a big company we can’t operate in a vacuum, but rather we have an obligation to advocate for diversity and inclusion across the entire business ecosystem.
What advice would you give to other business leaders to help their employees to thrive?
First and foremost, listen to your people. That means creating opportunities for them to share their thoughts, and then really listen to what they have to say. It also means valuing their lived experience. We need to give more credence to this. Our diverse associates are often the canaries in the coal mine — they know about issues before the media reports on them, because they’re living them.
I’d also say that it’s vital to care for the financial wellness of your associates. Financial strain can come from many sources, whether it’s dealing with an unexpected medical emergency, or caring for extended family or paying off student debt. We can’t assume everyone is financially resilient. At Prudential, we’re doing a lot of work to understand the financial wellness of our employees so we can meet them where they are.
What advice would you give to other business leaders about how to manage a large team?
Truly get to know and understand your team. It’s important to recognize the diversity they bring through their experiences and background, but equally critical to unlock the power of that diversity. One aspect is to acknowledge the intersectionality of your team. We can’t put people in one neat little category. Nor can we make sweeping generalizations about “communities” as if everyone in it is the same. We need to understand that we lead multifaceted existences. Role model being your authentic, intersectional self at work. And actively practice inclusive leadership. That’s how you can get the most out of your team.
We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might just see this 🙂
It’d be fun to share a meal with Padma Lakshmi — especially if she were the one to prepare it. We’ve chitchatted in the past, but I’d love the chance to tell her that I admire the way she’s opened the door to diverse cultures through food and I appreciate the way she uses her platform to advocate for social justice.
How can our readers further follow your work online?
Thank you for these excellent insights. We wish you continued success in your great work.