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Introduction

Over the past five years there have been dramatic changes in the factors that support or derail successful diversity and inclusion initiatives. What historically had been simple and marginally relevant efforts that fell under “diversity” training have all but been replaced by complex and compelling initiatives that integrate diversity, inclusion, engagement and organizational performance into a critical equation. As with all culture changes, the key unifying drivers that enlist broadest support and focused effort are those elements of a clear business case that connect leaders and managers to the change. Until about 2007, there was a broad range of business case definitions, many of them fragmented and disconnected from the critical business initiatives of an organization.

For the past three years, Global Novations has been observing and participating in the shaping of expectations in the marketplace about what should be “measured”; in other words, what diversity and inclusion elements are most valued, relevant and connected to an organization’s healthy performance. Our focus in this article is US-based companies at any stage of their initiatives, although much of what we will cover can apply to multinational companies as well.

The perspectives of a CFO master classby Michael O’Callaghan and Chris Campbellby Gerard Lupacchino and Rosaleena Marcellus

Ten Elements for Sustaining the ROI of Diversity and Inclusion Training Solutions

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Element 1: Know Your Place in the World

Recent research has shown that almost all companies are “global” in some way. If there are products or services represented on a website then those offerings are available to a half a billion people every day (hence the name “world wide web”). If you source components or materials for manufacturing, then you are dealing directly or indirectly with global suppliers. If you have operations outside of United States, then you are managing a global workforce. Even if you are managing operations in the US alone, you are hiring from a global population that is more “different” now than ever before. Well over a half million nonresident alien students graduate from American universities every year. Nearly one and half million Hispanic, Asian, or Pacific Islander students also receive degrees.1 One hundred percent of all college graduates in India speak English fluently, and have degrees from local campuses of the best US colleges and universities that they may bring to this workforce.

Depth of field comes from our abilities to see near and far at the same time. Knowing the impact of both local and global human resources is critical to seeing the entire “picture” of our place in the world. Knowing this perspective can shape your perspective of “diversity” in your organization. Although race and gender might be your key drivers, or EEO compliance critical to supporting your government work, establishing initiatives that truly reflect the broadest definition of “difference” present in the workforce and workplace is the safest and most proactive approach.

Element 2: Complete the Performance Equation

In many companies, there are discrete and separate initiatives that focus on interlocking components. There are the policies, procedures, and training that support “performance management.” There are the strategies and development programs that drive “management development.” There are the components of the “diversity” work, including workforce composition metrics, recruitment strategies, and training. There is the “engagement” work, often measured in a variety of ways—informally, or formally and at great cost. And in many organizations there is a competition for funds, support, and influence from each of these separate initiatives.

In our experience, there are companies who are spending less on and getting more from these initiatives by combining most of them in a strategic

1U.S. Department of Education, National Center for Education Statistics. (2009). Digest of Education Statistics, 2008 (NCES 2009-020).

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approach. It starts by establishing a direct correlation between engagement and performance. Ask your leaders the question, “Do you believe that engagement drives performance? That higher levels of engagement increase the contribution of our workforce?” Most well informed leaders will agree wholeheartedly. There are reams of research that support this connection.

Now ask yourself the question, “What’s our engagement strategy?” Make a list of any efforts that your company attributes to driving engagement, and you will likely see that in fact, those efforts actually target retention, performance management, or compensation and benefits. When you really assess the extent to which your managers come to work every day with the

intention and skills sets to engage their team, and that this approach is clear, trainable, and accepted by most, you may find some gaps. These gaps are the key barriers to completing the performance equation:

Whereas the engagement levels of the organization are directly impacted by the extent to which all talent is intentionally included in the day-to-day contributions of the workforce. This requires separate definitions of the terms diversity, inclusion, and engagement.

“Diversity” is those qualities and characteristics that make us unique or different. Diversity is measured by workforce composition, perhaps at a variety of levels throughout the organization. The presence of Diversity by nature can create conflict, which when well managed, creates innovation.

“Inclusion” is simply the act of including. It is not a state of mind or an environment. But when combined with the intention to drive contribution, the impact of inclusion is the increase of engagement levels within the organization.

“Engagement” is most often seen as an emotional connection that an employee has with his or her company. And by emotional, we don’t mean irrational. We mean a connection that sparks positive emotional connections. Ask someone to describe someone who is emotionally engaged, and they use terms like “excited, passionate, committed, loyal, happy, enthusiastic…” These behaviors come from this emotional connection.

Creating a sustainable initiative requires that all employees understand the components of your work, and that all see the direct connection that diversity and inclusion have with engagement, and that engagement has with performance.

Engagement/Diversity x Inclusion = Organizational Performance

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Element 3: Keep the Business Case Simple

Identify the responses to the five business opportunities below. These should start more conversations and generate more questions than what’s listed allowing for a truly customized business case in your organization.

These five drivers are key things that the C-suite and other key leaders in the organization really care about. Establishing a baseline helps to show progress on these five key business drivers year-over-year and at the accountable levels is critical to show progress and to identify areas within the business where some additional help and support might be needed.

Imagine a time in your business where there is parity in hiring across demographics, parity in development and advancement opportunities. Best-in-class organizations keep track of these workforce metrics.

Imagine also a place where more than 90% of your employee base say that they value being part of your organization and that they will expend that discretionary effort for their colleagues and the organization.

Imagine a place where diversity of the workplace and diversity of thinking leads to innovation of new products and services to your customers and hence increased revenue.

TalentEngagement,

Productivity, and Performance

Brand Strength and Reputation/

Corporate Responsibility

Revenue/ Growth Client

SatisfactionInnovation

•Whatareourtalentneedsandwhatisthepoolofavailabletalent?

•Arewefullyutilizing(attracting,recruit-ing,developing,andadvancing)allavailablepools?

• Ifnot,whynot?•Whatisthecostof

under-utilization(e.g.shortageoftal-ent,turnover,extendedtimetopromotion)?

•Areallemployeesfullyengagedanddeveloped?

• Ifnot,whatisthecost(performance,discretionaryeffort,turnover)?

•Aretheredisparatescoresbydifferentgroups?

•Whatisthecost?•Whatisourrelation-

shipandeffective-nesswithdifferentsuppliersandpartners?

•Whatisthemakeupofcurrentclients?

•Doweunderstandwhattheyneed,want,andhowbesttoservethem?

•Arethereopportu-nitiestoexpandandimproveifweunderstandandmanagedifferencebetter?

•Whatisthemakeupofnewmarkets?

•Whatdoweneedtodotoattract,retain,andservethem?

•Dowehavestaffqualifiedtodothis?

•Whatisourrelation-ship,reputation,andactivitywithdifferentcommuni-ties,suppliers,andpartners?

•Howwillweengagecommunitiestostrengthenandbuildourbrandreputation?

•Whatisthevalueofpositiveandthecostofnegativereputation?

•Doesourcurrentprocessofinnova-tionfullyleveragedifferenceontheteam?

• Ifso,whathavewegainedfromthis?

• Ifnot,whatobsta-cleshindertheprocessandhowcanweremovethem?

•Whatisthecost/benefitofdoingso?

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All this have been achieved by organizations that have managed the diversity of the workplace and created inclusive cultures.

Element 4: What Gets Measured…

Several months ago we began working with a client that had landed a prominent spot on the Fortune 100 Best Places to Work list. In examining the weighty box of documents and forms completed for submission to receive this award, we noticed some interesting components. First, the company was extraordinarily proud that most of the new hires over the past 36 months had come from direct referrals from employees and their families. Next, the employee satisfaction scores had gone up incrementally over the same time frame. Thirdly, there was substantial decrease in turnover at middle manager levels during this period as well. The client had engaged us to update their diversity and inclusion initiatives, not in response to any critical issue, but rather from the point of view to “upgrade” or to get “what was next and best” in the marketplace. They felt very positive about their workplace environment. In fact, the satisfaction scores and results showed the presence of many successful inclusion initiatives.

Within the first hour of consulting with them, we asked for the workforce composition numbers for the past 36 months. Immediately we noticed that representation of women and professionals of color had declined noticeably during that time frame. Given the low percentage of representation of these categories initially, the impact of this decline was indeed a red flag. It became apparent that although well intended, the drive for talent acquisition through internal referrals had negatively impacted workforce diversity, since eighty- nine percent of the organization was white, and seventy-six percent male. As expected, the best employees were hiring the best people they knew, and most of those people were like them demographically. Every year, the homogeneity of the workplace drove up satisfaction scores of most employees (lack of conflict, presence of comfort). And, as a result, turnover dwindled to a marginal level. When we reviewed the satisfaction scores as sliced by Race, Ethnicity and Gender, the client could see that the disengagement of the diverse employees had gone up, but became statistically insignificant within the total population. We then asked the question, “What is the impact of being statistically insignificant in this company?”

The realization that the benign intention of recruiting and hiring internally recommended candidates had created an almost invisible slide to homogeneity. As the client considered the next three-year plan that included innovation, market penetration, and product leadership, it questioned its readiness to win in these areas given the lack of diversity in the workplace.

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If you are driving a diversity initiative to increase changes in workforce composition, your inclusion efforts must match in order to drive retention and engagement of that evolving team. If you are focusing on inclusion and engagement, watch your workforce composition to avoid diminishing creativity and innovation.

Element 5: Create Connections that Work

Think about the pyramid that is your company, with the leader at the top, the multitude of workers cascading away, with the points of client-critical connections across the bottom. Does each tier, each worker, have the same responsibilities in supporting the diversity and inclusion initiative? As with any corporate initiative, although everyone must be aligned, their individual roles vary as much as their daily jobs. So to expect the executive to have the same experience as a front line manager would be a disservice to both groups.

A front-line manager needs tools and skills to help them cope directly with the differences in the workforce, managing the four generations of globally experienced workers matrixed throughout the world. An executive needs a strategic view that connects the vision of the organization to its marketplace and workplace. And both the front office and the back offices need to be aligned philosophically as well.

Whether you start your initiative from the top down, or the bottom up (either way can work) be clear about the roles each level plays in this work, and create solutions that are relevant to those individuals. Create clear connections between your efforts around talent optimization and market optimization so that every level connects not only with the initiative but with each other.

Getting senior executives and front line managers involved is often easier than engaging middle managers. Senior leaders see the big picture and, when provided with the performance equation mentioned earlier, see the logic behind the initiative. Not supporting this work would be illogical. Front line managers are often hungry for development and value engagement and support to help them do their jobs better. The middle managers however, are often overwhelmed with work and wary of accepting any additional responsibilities, including those connected with the ephemeral “diversity and inclusion” efforts of the company.

The mindset of the typical manager often sees “diversity” work as event-based. They agree that diversity is “good,” and that when given a diverse slate of candidates, are willing to consider diverse talent as a resource for hire. In those companies that aren’t hiring, this opportunity to support “diversity” happens rarely, and since the manager only sees his or her role

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narrowly defined, they question the value of spending time in training or in supporting this work.

By using the performance equation above, the manager learns that their actual role might be to support diversity, and to drive engagement. The latter is where an inclusion strategy is more relevant and supportive of those skills they would benefit from― to get more from more people on their teams.

Element 6: Grow Your Toolbox

Sustainability isn’t something that happens after an initiative, it must be “baked in” to the process. Think about the need to make products recyclable, in order to support the recycling initiative. Diversity and inclusion initiatives need to be set up to be reinforced and ongoing.

TrainingUse multiple modalities. Training needs to be interactive, and can include instructor-led, virtual, and eLearning strategically combined. Be sure you are comfortable with the best practices of all of these components and that you have suppliers who are comfortable in providing you with this range of training solutions.

“Certify” people on your team. People can be certified along a continuum of training intensity—a master trainer of content who trains other trainers, or a participant trainer, or a coach who becomes a “go-to” resource in the company without necessarily having to take time out of their job to train. (Think about the “belt” levels in Six Sigma training.) Leverage time, availability, and roles to create leaders of the diversity and inclusion initiative throughout the company.

MeasurementCreate scorecards. Be sure you have a baseline of all metrics that are connected to diversity, inclusion and engagement. Your diversity scorecard should include representation numbers, recruitment statistics and sources, retention and promotion statistics, and termination and turnover numbers by population. Your inclusion scorecard should include all those activities designed to drive engagement. And your engagement scorecard should include any scores, sliced thoroughly by population, reflecting levels of satisfaction and engagement throughout the company.

CommunicationDevelop message maps. Most people in management or leadership roles would benefit from a well written, relevant, and succinct message to use when asked about your diversity and inclusion initiatives. Each job tier or rank needs a slightly different approach in order to make the message

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relevant and authentic.

Once these tools are created they can be used again and again, updated as needed as your initiative evolves.

Element 7: Spread the Work

Perhaps one of the most positive changes in the workplace over the last three years has been the evolution of the associate affinity group concept to an employee resource group relationship within many of our clients. The titles of these groups imply their value; that is, an affinity group is focused on its members while the resource group is focused on the organization as well. An affinity group provides resources to its constituents; a Resource Group provides a service to its constituents and to the overall company in general.

One of our clients has recently completed their merger with a major competitor. They did many things well, but as it relates to the topic of this article, there were three strategies that were extraordinarily powerful.

1. Because of their alignment with the performance equation mentioned earlier, they used their Diversity and Inclusion resources to support the efforts to increase the engagement of the people at the acquired company. This included creating direct connections between the affinity and resource groups of both companies to facilitate the blending of cultures.

2. The company financially supported the events of the resource groups that appealed to the broader population. For example, the women’s resource group sponsored a program on relocation strategies for families (including health and day care resources, schools etc.). Once registrations started to increase, the company funded the move to an external venue to allow over three hundred attendees to benefit.

3. Each of the resource groups nominated an individual to an ambassador program, whose primary responsibilities were to travel to multiple locations and represent the work of all resource groups in the company. The company funded the travel and living expenses for thirty ambassadors for ninety days to help deliver the message of inclusion and engagement to the newly acquired employees.

Employee resource groups, when chartered effectively, establish a transactional relationship with the organization that allows them to increase their value and contribution to the company in exchange for increased exposure and influence.

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Element 8: Make Promises You Can Keep; Keep the Promises You Make

Whenever we begin work with a client, one quick exercise we do is to visit their website from the point of view of a diverse candidate seeking employment. At the company’s opening page, we will type in the word “diversity” in the search bar to see what results are generated.

Remember that nearly one hundred percent of new hires will visit a company’s website before applying for and interviewing for a job. As a diverse candidate, an individual may seek to ensure that if hired, that candidate will not be the “test” subject, or “guinea pig” upon which the company can try out its inclusion strategies. It’s amazing to see how many companies indicate their best intentions without supporting those comments with strong outcomes. “We hope to become…” or “We endeavor to engage…” are admirable, but indicative that the organization is at some early point in their diversity and inclusion initiative. This isn’t to say you should represent your company as better than its current state. Rather, clearly articulate your policies, values, and most importantly, great work related to your diversity and inclusion initiatives. Brag about those awards and recognitions you have received. Feature testimonials that are real and authentic about people in your company experiencing inclusion efforts and increasing their engagements. Make promises you can keep.

But also be prepared to keep the promises you make. We have found that most employees who are feeling marginalized at work often will return to the website to see what they were originally promised. We are curious to see how the legal community will interpret website language as verbal contracts in the future.

Element 9: Move the Needle

From an historical perspective, many companies began their diversity and inclusion “journey” in response to litigation and legislation. There was a time when the expectation was that diversity should be “tolerated” in the workplace. Then we realized what it feels like to be tolerated.

We are at a time in this evolution where expectations for behaviors at all levels in most organization are constantly rising. “Tolerance” has now become Acceptance, and even Appreciation, as a result of the economic need to value the contribution of most instead of some. Leaving any talent on the table in this new global economy is unacceptable.

To that end, the leaders of any organization who want to complete the performance equation better than their competitor’s first need to target

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where they are personally, and where the company is overall, with respect to internalizing this work.

In the table below, we identify the three stages of commitment an individual moves through when faced with required change.

In this process, you can see that when faced with change, an individual weighs the consequence of not doing something against the benefit of doing something. In essence, we have learned that Compliance means doing what you are supposed to be doing when others are looking! Think about the decades of compliance-driven diversity initiatives that measured only representation, or diversity training that measured only the numbers of participants in the training programs. Early on we often heard a client declare success when they had run the highest percentage of people through their diversity training programs.

We have seen that the more successful initiatives have leaders who are highly self-aware. That is, they know that many employees in the company want to be like those leaders. There are valued employees who want that leader’s position of influence, authority and power. There are those who want the leader’s economic security or equity position in the company. Whatever the driver, effective leaders know that others are watching and listening. Those leaders at Identification know that others who hold them in high regard will adopt that leader’s values, points of view and beliefs, as appropriate for them. As a result, leaders at this stage are strategic about what they say, how they say it, and to whom. The message maps, mentioned earlier, are this leader’s critical tool to ensure they are leading the company to higher levels of Internalization. This last phase is where leaders unconsciously make the critical connections talked about in the performance equation. They clearly see that engagement drives performance, and inclusion the engagement strategy.

In December of last year, a client contacted us in the middle of the month to share an event that she indicated was the culmination of a year of very hard and dedicated work. She emailed us an excerpt from the CEO’s year-end message to the company. In that excerpt, the CEO reflected upon the powerful results the company had generated as a result of the inclusion work over the past year. He talked about increased customer retention as a result of interactions with highly engaged employees. He talked about new markets penetrated as a result of managers and leaders working with the highest comfort levels with new and diverse cultures and geographic

Compliance Identification InternalizationTheprocessofobeyingacommandforthesakeofreceivingarewardofavoidingapunishment

Leadersinduceothers(whoholdtheleadersinhighregard)toadoptthesameattitudesasappropriateforthem

Individualstakethenewexpectedbehaviorashis/herown

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locations. He talked about innovative products that came out of think tanks both in and out of the US as a result of diversity well managed.

As we read the excerpt, we could see our client’s handwriting in the CEO’s message. She had spent a good amount of time over the year crafting the CEO’s speeches and comments. She had monthly meetings with him to coach him on ways to think about their diversity and inclusion work, and how to talk about it. Their marketing and communications group met with her frequently to ensure that his messages about this work were consistently worded. So we called to congratulate her on her continued efforts at articulating these messages so well for the CEO.

She laughed at our comments, and then laughed, delightedly, again. “I didn’t write it,” she said. “He did. All by himself.”

The client had moved the needle to Internalization for the CEO, and ultimately for the entire organization.

Element 10: Give Yourself Credit, Wherever You Are

In the diversity and inclusion space, there are some amazing practitioners who throughout their careers move from one company to the next, heaping one success upon another. They take what they have learned, what’s worked and what’s not, and leverage these experiences to create even stronger results in their new roles. When these champions land in the new company, there might be the expectation that they will compare where they just landed to where they came from. And by comparison, the new company may compare woefully to the other in terms of diversity and inclusion efforts and results.

One of these champions, a CDO at a technology company, has built a powerful reputation in the market as a diversity change leader. She has shifted cultures in very challenging environments, noticed by many around her in and outside of the company, for her results. She shared something with us that we feel is an important perspective upon which to reflect.

If you are successful today, this month, this quarter, in this volatile and tumultuous economy, then you are really good at what you do. You should give yourself credit for managing all the variables in the workplace: generational diversity, global impact, M&As, RIFs, negative press, desperation, terrorism, sustainability… the list goes on. Look back on all you have done, and be proud of being where you are.

Now look ahead, and try to imagine what could possibly happen next. Ask yourself, “Are you ready?”

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If you answer, “I hope so…” or “I think so…” then you are not ready. Hoping and thinking are not a strategy, especially in the face of the unknown. Creating a strategy that mobilizes your workforce, that builds their confidence and that fosters courage will prepare you for whatever comes your way. That is the new metric for today’s successful diversity and inclusion initiative.

We agree with the client whole heartedly. Diversity and inclusion training isn’t going away. It’s becoming part of the bigger plan to optimize talent in every organization. We are seeing it in every industry, in almost every location, worldwide.

As you review your efforts against these ten elements, acknowledge what has worked well for your organization, and what might work for you in the future. We hope these insights are enlightening and encouraging and are always happy to share more about what we have learned over the past three decades.

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About The Korn/Ferry InstituteThe Korn/Ferry Institute generates forward-thinking research and viewpoints that illuminate how talent advances business strategy. Since its founding in 2008, the institute has published scores of articles, studies and books that explore global best practices in organizational leadership and human capital development.

About Korn/Ferry InternationalKorn/Ferry International is a premier global provider of talent management solutions, with a presence throughout the Americas, Asia Pacific, Europe, the Middle East and Africa. The firm delivers services and solutions that help clients cultivate greatness through the attraction, engagement, development and retention of their talent.

Visit www.kornferry.com for more information on Korn/Ferry International, and www.kornferryinstitute.com for thought leadership, intellectual property and research.

© 2013 The Korn/Ferry Institute