A robust diversity and inclusion initiative is central to any organization’s success. With solid senior-level executive commitment and engagement and direct access to top leadership, such as the president, CEO or chairman, diversity and inclusion initiatives enjoy ongoing relevance and sustainability. This governance structure ensures the alignment of diversity and inclusion initiatives with business goals and the future direction of the organization, as well as a consistent method for implementation across locations and business units.
There are numerous approaches to diversity governance, but the organization’s overall business objectives must dictate how governance is structured. Essentially, is diversity and inclusion a strategic or tactical contribution to organizational success?
What Business Are You In?
To build the right governance model for the effective strategy and implementation of diversity and inclusion initiatives, diversity executives must understand the organization’s overall makeup. Refer to the organization’s mission, vision, values and structure, as well as short- and long-term business objectives, as a road map. These may include: changing demographics in the U.S. population with resultant shifts in the emerging workforce as well as customer markets; the ongoing war for talent, including the sourcing, development and advancement of employees for future leadership roles; and changing legal requirements surrounding the engagement and reporting of minority- and women-owned vendors and suppliers.
Strategically, determine if the organization is:
1. Customer focused:
This may require a workforce that reflects the customer groups served, because buying power continues to increase more significantly in ethnic, minority, gender and age-related groups.
2. Community focused:
This may require a workforce created from the communities in which it does business. Employees help brand the organization as they interact in their local communities, essentially acting like walking billboards, promoting the company by sharing information with others via their positive experiences in, and attitudes about, the organization.
3. Employee focused:
This may require a strong focus on employee engagement and satisfaction. Employees are the engine that drives bottom-line results. The workplace environment either enhances or hinders the degree to which those employees perform, essentially boosting or reducing their level of discretionary effort. Creating a work environment that fosters an inclusive culture enables employees to contribute to the bottom line to the best of their abilities through full engagement of all their diverse skills, talents and capabilities.
4. Compliance focused:
This suggests a workforce that is representative of the overall population, in accordance with local, state and federal laws. While perhaps the least strategic overall, compliance still represents a compelling need for organizations to engage in diversity and inclusion initiatives.
Diversity and inclusion are two sides of the same coin; it is extremely challenging to sustain one without the other. Diversity is the mix of employees within the workforce. Inclusion speaks to every employee, regardless of individual attributes such as race, gender or age and moves the discussion beyond representation of certain groups to the collaboration and engagement of all employees for the betterment of the group.
Who Should Run It?
A centralized form of governance that reports directly to the CEO of the organization is a preferred model to ensure continued relevance and sustainability. Governance models for diversity and inclusion are centralized or decentralized, directly reporting or indirectly reporting. The resulting options are:
1. Diversity executive:
This is often a chief diversity officer, chief human capital officer, senior vice president of human resources or equivalent senior-level executive who reports directly to the chairman, president, CEO or board of directors and owns accountability for the implementation of strategy and tactics.
2. Diversity council:
This group also reports to the C-suite and is made up of a steering committee of top executives, typically from multiple lines of business across the organization, but without a single executive owning accountability for strategy and implementation.
3. Diversity manager:
The diversity manager may own the tactical implementation for diversity and inclusion initiatives, but reports to a secondary layer of management and is not directly connected to the C-suite. This individual is one, or several, steps removed from key decisions linking the strategic alignment of diversity and inclusion to the organization’s overall business strategies.
4. General manager:
In organizations with multiple locations, usually geographically dispersed, diversity initiatives may be in the hands of the general manager, office or local HR manager and may be the furthest removed from the CEO, senior-level decision makers and the ability to link initiatives to corporate business strategy in a strategically significant way.
Again, the model chosen should relate to the organization’s business objectives.
Shared Services
No matter which method of governance is implemented, shared services likely will come into play. At a basic level, there are two methods of shared services:
1. Shared provider:
In this scenario, multiple companies use the same service provider, such as an Internet-based provider, largely independent of the organization.
2. Shared solution:
In this scenario, multiple locations or business units rely on a shared solution unique to the organization.
Ultimately, an organization’s governance model will determine what form shared services will take.
a) An organization that has a diversity executive accountable for results likely will invest in a thorough organizational assessment, which is necessary to develop a solution delivered by a unique team of solution providers, usually the internal training department. This model allows for extensive customization and requires considerable resources. Generally, however, outside consulting services still will be required to develop the solution and internal train-the-trainer options.
b) A diversity council likely will require a customized solution, but may rely on an external consultant to develop and implement that solution due to constraints on internal staff availability as well as constraints on council members’ time.
c) Conversely, the diversity manager still may rely on a team of internal trainers to implement a solution, but will likely face a lack of funding to conduct an organization-wide assessment and develop a custom solution. Instead, the manager will research and recommend a standard solution offered by a shared provider that best meets the organization’s needs and then track and report its implementation in various business units or locations.
d) Finally, location managers likely will find the best use of their limited time, budget and training resources will necessitate an off-the-shelf shared solution, perhaps one that is Internet-based.
In any case, the best solution will tie to the organization’s business needs, and the diversity executive, or whoever is in charge of programming, should take care to employ a shared services model that reflects the chosen governance structure.
Why Does It Matter?
The metrics established to determine how successful an organization’s diversity and inclusion initiatives are should directly relate to the business strategies individual programs are designed to support. If profitability is an objective, then employee engagement, satisfaction and retention metrics may be applicable. If community involvement and improvement is the focus, then workforce representation numbers based on ethnicity, gender, age and local versus nonlocal acquisition and applicant data may be applicable.
Due to continued underrepresentation of women and people of color, particularly at mid- to senior levels, these types of metrics are necessary to determine an organization’s progress in advancing workplace diversity. Organizations continue to be challenged with their talent acquisition efforts, as well as moving existing talent into their future leader pipelines. Additional measures include monitoring attrition rates for underrepresented employees, such as women and people of color, throughout all levels.
The frequency for reporting the relevant metrics will vary depending on the strategic needs of the organization. Some metrics, such as representation and retention, are quantitative, lend themselves easily to reporting and can be cost-effectively obtained on a quarterly or more frequent basis. Other metrics, such as employee engagement and satisfaction, are more qualitative, rely on resource-intensive employee surveys and may be conducted annually or perhaps on a less frequent basis.
Once the relevant key metrics have been identified, a benchmark should be established to measure progress at determined intervals. Then a scorecard can be created to track organizational progress over multiple reporting periods. These comparisons are invaluable in determining the overall effectiveness of a diversity and inclusion initiative or strategy over time.
The preferred model for governance of diversity and inclusion initiatives to ensure continued relevance and sustainability is a central diversity executive with direct accountability to the CEO for organizational progress. However, organizations vary in their business objectives, customers, employees and locations, and their governance models must vary as well. The key to sustainable diversity and inclusion success is to align governance, strategy, tactics and metrics to support the organization’s overall business objectives.
by Bill Wells and Stacy Rider | Diversity Executive
[About the Authors: Bill Wells is vice president of strategic inclusion solutions and Stacy Rider is a director with InclusionINC.]
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