Transitioning from a man to a woman as the CEO of an insurance company: Caroline Farberger shares her unique experience and remarkable insights on inclusive leadership

In this interview, former CEO Caroline Farberger shares how her mindsets and behaviors changed as a leader after she transitioned and how she realized that her previous way of leading was not inclusive—and what had to change for it to become truly inclusive. She also argues that leaders make better business decisions if they can master the skills of harvesting the unique perspectives and contributions of the people around them, discusses how organizations can gauge whether or not they are inclusive, and shares three things for leaders to consider as they assess their own behaviors to adopt a more inclusive way of leading.

Below is a full transcript of the episode, which has been lightly edited for clarity.

Welcome to The Heidrick & Struggles Leadership Podcast. Heidrick is the premier global provider of senior-level executive search and leadership consulting services. Diversity and inclusion, leading through tumultuous times, and building thriving teams and organizations are among the core issues we talk with leaders about every day, including in our podcasts. Thank you for joining the conversation.

Rachel Farley: Hi, I'm Rachel Farley, a partner in Heidrick & Struggles' London office. Since Covid, there has been an increased awareness that building diverse and inclusive businesses is essential for successful business outcomes. 

Today's podcast topic focuses on this important subject, how do the inclusive leadership behaviors demonstrated by a CEO drive more successful returns, and how can a CEO change their mindsets and behaviors to be a truly inclusive leader. 

In today's podcast, I'm excited to speak to Caroline Farberger who, as a CEO, transformed her mindsets and behaviors into being an inclusive CEO. She has a unique personal story and insights on this subject. Now, Caroline is on the board of financial services companies and is also an investor, and before, she was a CEO of a listed insurer from 2016 to 2022. 

However, this is where her story differs from others. Two years into her tenure as a CEO, she transitioned from a man to a woman. 

Caroline, welcome and thank you for taking the time today to speak with us.

Caroline Farberger: Thank you very much for inviting me, Rachel. 

Rachel Farley: Today we will explore how Caroline's mindsets and behaviors changed as a leader and how she realized that previously her way of leading was not inclusive.

Caroline Farberger: I must confess that I, when I lived as a male CEO, thought I knew it all about leadership and inclusion, because, after all, I was a successful fifty-year-old CEO and I delivered consistently good results. What more did I have to learn? So was my thinking. 

However, I only had to live as a female CEO for a few months to realize that I had gotten it all wrong about inclusion and inclusive leadership. There was so much I had missed, and it was not because I was treated differently myself. Rather, it was that the women around me included me in the female community and they shared stories with me that they hadn't shared before; stories about what difficulties they had experienced through their careers, ranging from being generally invisible or overseen in the office, to outright discrimination and in some cases actual sexual harassment. So in short, they had difficulties being themselves and being able to contribute with their unique skills and abilities. And those stories I heard from these women made me realize how privileged I've been throughout my career by being part of the norm, which is the category of people who traditionally have dominated the higher levels of corporate business. And in my part of the world, Scandinavia, that is being white, heterosexual, male, and culturally Christian. 

So, in many ways I came to realize that we—in many places of our corporate community—we have social structures that is the sum of all behaviors of people at the workplace that allow normative people to play a home game and others to play an away game. That is, we don't have an even playing field. OK, well what's the problem with that, you might ask. Well, ask yourself, “What use does it have to go to great lengths to employ uniquely talented, often diverse people in to your organization if you don't create a culture, an even playing field where they can feel engaged, being themselves and be able to contribute fully?” It would be a waste of talent.

So then I saw in my role as a CEO, that it was in my role to create a culture, not only in my executive team but actually throughout the organization, where everyone could feel that they were playing a home game. And that is how I found out and educated myself around inclusive leadership. And after having practiced inclusive leadership in my executive team, I also came to realize that it did lead to tangible, positive business outcomes. 

So in hindsight, Rachel, you can see that I realized that I had unconsciously been quite selective in which people I allowed to influence my thinking. Basically, I more often than not, went into an executive meeting already having a clear vision of what to say and what the outcome would be, without being actually curious about the talent and the knowledge around me.

Rachel Farley: Would you say it was as extreme as a command-and-control style, Caroline?

Caroline Farberger: Well, not really. Rather, I don't want to view myself in that way, but let's say that every meeting was very prepared and scripted in what was about to happen. For example, in my executive meetings, I usually wanted to have them controlled in a way that I wanted to set the agenda what was to be discussed, and then I wanted the outcome of the meeting to be kind of boxed in already before the meeting, because then I would feel that I would be in control. 

How did I achieve that? Well, I usually, I had a pre-meeting with my male CFO so that he and I would agree on a joint agenda, so that we— heaven forbid—would not contradict one another in the meeting. Then, I would open up the discussion, laying out the issue to be discussed and my preferred answer or solution. Then he would fill in, saying essentially the same thing but using a bit more numbers, and then I would open up the discussion if anyone had anything else to say and typically there would be another guy who understood the bro-code, that is that personal loyalty to the CEO is usually a good thing when playing the game. So he would say yes, what a great idea, let's do it, basically regardless what came out of my mouth. And suddenly we were three guys having said the same thing. And then I would smilingly look at the rest of the team—which was, on paper, diverse: five men and five women—but usually only got smiles back. And if one of the women would raise her hand and say, “Well actually have a different opinion because I have a different experience,” I would usually find a way of winning the argument. And then I would make a quick decision because I loved efficiency, you know, make things happen, let's move on, let's move forward—usually a career-advancing behavior where I've worked, to make a quick decision and move on. So on paper we had a diverse executive team, nicely balanced both on genders and ethnicities, but it wasn't inclusive. I didn't use the competencies and the talents around the table because everything was pre-scripted. 

Rachel Farley: I remember when we spoke recently, you were telling me about how proud you were of your diversity statistics. 

Caroline Farberger: Oh, yes. 

Rachel Farley: And hadn't quite appreciated the value of including people, or indeed the value of inclusivity on your business results.

Caroline Farberger: Yeah, because I realize now in hindsight that part of where I got inclusion and diversity wrong is that I thought it was yet another statistic I, as a CEO, needed to show off. I mean in my annual report and quarterly statements, they already had a number of traditional P&L, KPIs, and then this D&I thing came along. OK, I need to look good on yet another KPI—I can do that. And gender split in my executive team seemed to be an important one, so I made sure to deliver on that, five men and five women. And this was an insurance company, so I—yes, the women were head of legal, head of risk management, head of compliance, head of HR, and the guys were the business unit heads, because after all there was a business. But I could deliver on the statistics. I genuinely thought I was home free and proudly shared the photographs on my team, even on social media. 

Rachel Farley: Fascinating. Which leads us on nicely to the next question: many leaders think inclusion is a soft skill and a tick-the-box exercise, rather than something that must be done for successful business outcomes. How would you change their minds?

Caroline Farberger: Well, I must, first of all, readily confess that I was one of those who thought that D&I and inclusion were, you know, about being kind to others, so sort of an ethical thing to do. Something you talk about in your sustainability statement, but without any apparent commercial benefit.

But having practiced inclusive leadership, having lived as a woman and a non-normative person, I quickly realized there are clear links to commercial benefits. If we take me back to that executive meeting example, where I previously didn't really include other people or listen to other people. I changed my leadership style in a way that [I asked,] how should I as a leader behave in such a way that we actually play on the talents and knowledge around the table? And I realized that I, as a leader, should not start talking first but rather have someone else present the matter to be discussed and, even more importantly, I should not divulge in my preferred solution.

As an ex-McKinsey consultant, I'm very hypothesis-oriented as a person. But I needed to keep that for myself, and rather facilitat a discussion in such a way that not only everyone contributed, but also everyone shared their experiences and insights, especially those who were diverse, those that had a different background than mine. And I, as a leader, did not make up my own mind until I understood the perspective of everyone around the table, only then did I make up my own mind. And more often than not, we came to a different conclusion than the one I and my CFO had had before the meeting, and I realized then that over time we made better business decisions. Those things we decided upon, they involved fewer mistakes further down in implementation because we got many parameters right from the start, and more often than not we made more innovative decisions, where the innovative aspects more often than not came from those people with a different background. 

And then there were further benefits on top of that, because after a while I realized that any—in insurance and financial services—people in risk management and compliance in our part of the world are usually hard to get this. They frequently switch employers to elevate their salaries. Both my chief compliance officers and chief risk officer, women with diverse backgrounds, came forward to me and said that they had competing offers with higher salaries with other employers, but they wanted to remain here because here they felt included, here they felt that their opinions mattered. Their opinions were listened to. They didn't need to just suffice with a nicely direct reporting line to the CFO. So there were clear engagement and retention benefits. So my primary driver might have started in sort of the soft corner, being kind to others, but quickly I realized this is hardcore business benefits, inclusive leadership has tangible hardcore P&L benefits. And I would say it's a modern, modern leadership. So I've now made a commitment to develop my, and continue to develop my, leadership style in such a way that how should I behave to tap in to the engagement and knowledge of the people I have around me. And the answer is inclusive leadership. 

Rachel Farley: If we just summarize the points that you've made: the question being, when you were a male CEO, you thought you knew it all about leadership. If you could go back in time, and we all want to do that, how would you advise yourself now, if you could go back in time to when you were a male CEO?

Caroline Farberger: At that time, I was very confident about my leadership skills. The angle of attack, so to say, in the argument will not be about what is the good thing to do, but rather what's in it for myself. I would talk to my own ego and I would say that you have much to win for yourself. Because if I were to tell my old self, why would I bother learning inclusive leadership? Well, when your team, Caroline, in your old style, when your team makes better and more innovative business decisions, the subsequent commercial success will reflect positively upon you and you will be seen as a more modern and progressive, successful leader, delivering even better results. That is, talk to my own ego. And then in more practical steps, I would like to remind myself that leadership is not about being the smartest person in the room and certainly not having all the answers myself, which is kind of what I thought, but rather it's about managing the people and the culture in the workplace. And that I also wished that much earlier in my career I would have understood that success comes from attracting great people around me and fostering a culture where they can thrive; that leadership is all about understanding people, their inner motivations, and how we as an organization can build upon each individual's unique strengths. And you can only achieve that as a leader, I would tell myself, that if you're genuinely really interested in other people and what they need to be themselves and thrive, it's about really, really getting to know people under the skin in your team as unique individuals. So, I would say to some extent it would be for me to unlearn what I thought I learnt early on in my career, as a management consultant with one of the big firms, that employees had to fit into a standard of stereotypes to be successful and that success comes from adherence to norms.

Rachel Farley: Thank you for your fascinating perspective on inclusive leadership. Would you mind sharing something about your personal journey and your family?

Caroline Farberger: Yeah, well as you mentioned the introduction, I've sort of lived my first 50 years of my life belonging to the norm—that is being a white, straight, Christian male—and I walked the sort of perfect straight track with the dual university degrees, engineering, and business. Started my career with McKinsey and then a successful line management career, ending as a CEO of a major insurer. And back in the days, I would like to think that both the business environment and the society are equal because we have politicians making laws and responsible employers making all HR policies. 

But then when I stepped outside the norm, in my case coming out as a transsexual and start living as a woman, I've been so much more humble and being more aware of the inequalities we have not only the workplace, but also in our society at large. And I also started to realize how privileged I've been because I belong to the norm. 

You see, privileges can be very hard to understand if you yourself belong to the privileged category. It is, in fact, quite difficult to step into another person's shoes, and I didn't understand it when I grew up. So to sum up that part, I'm very, very grateful to everyone who has supported me in my successful transition, which has worked great, and also to my family. I'm still married to my wife, over 20 years now. We have three wonderful children, two of them are starting university now and yes, it's been a journey for us as a family also, but we've managed to pull it through. We still live together. I still have my larger family, I still have my friends. I can't recall that I've lost any person during this journey. I've managed to keep them all around myself, so I'm eternally grateful for that support. 

But how has that transformed me as a person? Well, I must say that I, in general, I'm much more humble toward getting to know people outside my own category. So understanding how I networked only with the people like myself before, I am very honored to call many other diverse people from diverse communities my friends. And on many occasions, I've also been able to recruit very diverse candidates in recruiting situations, which I admittedly might not have dared to do before, but I'm doing it for business reasons and it's always turned out to be a great success. So in all, a very humbling experience personally also. 

Rachel Farley: Coming to advising others based on your experience, what three things can you advise leaders on how they can assess themselves, in the sense of their own mindset and leadership mindset, and then their own behaviors and leadership behaviors, to adopt a more inclusive way of leading?

Caroline Farberger: Well, start off by admitting that we all have biases, regardless of who we are, and that means you who are listening to this podcast, learn about your own biases and then educate yourself on the tools and techniques that are available on how to mitigate them and how to compensate for them. And only when you master those tools of mitigating your own biases, only then you will treat people fairly around yourself. 

Second, don't make assumptions about other people around yourself. Truly get to know the people closest to you in your team and elsewhere, and try to understand their inner motivations and what they need to be themselves and thrive. Go beyond the superficial small talk in your one-to-one meetings and casual conversation. Really try to understand what it is that I don't know about this person around yourself, and seek to know that. 

And finally, and maybe most importantly, realize that inclusion is an act, it's what you do that matters. Because if you're not consciously including in your daily behavior, you are most certainly unconsciously excluding in several ways, and that involves all human interactions that you have with colleagues and others throughout the business day. Inclusion is what you do.

Rachel Farley: Finally, how do you enact and quantify inclusivity? How do we gauge whether an organization is inclusive? What specific strategies and actions can leaders implement?

Caroline Farberger: Oh, yeah, measurements. We all live in a quantitative world and we love our KPIs, don't we, Rachel? Well, inclusion that can only be measured in the receiving end. In short, you will only know if your team feels included if you ask them. That means both very honest conversations in one/one meetings, but also in staff surveys. And there are very good survey tools out there in the market that can be employed alongside the usual staff engagement surveys. And there are a number of questions that you should ask, like do you feel valued for your unique skills; do you feel that you can be your true self at work, and so on? There are such questions. They should be appended to the regular staff surveys your organization have, and then you will get KPIs and those you need to track. 

But ultimately, it's down to your own behavior that matters. So, what can you do as the leader then? Well first of all, educate yourself about the differences that exist among the staff around yourself—different cultures, beliefs and perspectives. If you have a non-normative person in your team, say to that person I really would like to learn more about your perspective or the culture or religion or whatever it is that you represent, I really want to learn. Then really listen with the intention to learn yourself with an open mind. Be genuinely curious about the people around yourself, and especially when you meet a person or talk to a person unlike your own category, practice empathy by trying to put yourself in someone else's shoes. If you have a person who is non-Christian in your team, and you have a habit of wishing everyone Christmas holidays and talking about what will you do the Christmas break, try to understand how would a non-Christian feel about that. Try to put yourself in someone else's shoes, and then try to say, ‘what is inclusive language that everyone feels comfortable with?’ But don't open up large town halls with ladies and gentlemen because there might be someone who's non-binary and doesn't feel included. Say rather dear guests or dear everyone or something. Practice those words. And then avoid stereotypes, that is don't make assumptions about other people. If you talk to another person and that person talks about his or her partner, don't make an assumption that that partner is of the opposite sex of your colleague. Make sure that you don't assume something you don't really know. And if you see a behavior in your team and elsewhere that is inappropriate, it's probably not consciously done, speak up there and then. Don't wait until after meeting—speak up where and as it happens. 

And finally, in recruiting situations, challenge yourself to see more diverse candidates. Resist the temptation to select a candidate like yourself because that would, that is someone that will probably fit in and it would feel cozy. 

Rachel Farley: Caroline, thank you so much for making the time to speak with us today and sharing your story so openly. 

I'm going to finish on something that you shared with me a number of months ago and I'm going to read it out to you all. Remember, inclusion is an act. It's what you do that matters. If you're not consciously including others in your daily behavior, the chances are that you are unconsciously excluding. This includes all human interaction you have with colleagues throughout the business day. So thank you again, Caroline, and we really appreciate you doing this podcast with us. 

Caroline Farberger: You will make better business decisions as being seen as more successful leader if you master the skills of harvesting the unique perspectives and contributions of the people around yourself. You will make higher quality business decisions, more innovative decisions, and you will be rewarded by higher engagement and retention of more key staff, hardcore P&L benefits.

Rachel Farley: Well, thank you, Caroline, this has been as ever fascinating and I watch you around the world and on the television sharing more about your experiences, and I can only wish you continued luck doing the important work that you do. So thank you very much. 

Caroline Farberger: Thank you very much for the conversation. 

Thanks for listening to The Heidrick & Struggles Leadership Podcast. To make sure you don’t miss more future-shaping ideas and conversations, please subscribe to our channel on the podcast app. And if you’re listening via LinkedIn, Twitter, or YouTube, why not share this with your connections? Until next time.

About the interviewer

Rachel Farley (rfarley@heidrick.com) is a partner in Heidrick & Struggles’ London office and a member of the global Human Resources Officers Practice.