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The Power of Diversity ROI Measurement Alignment – Part 1

Misaligned metrics, like cars out of alignment, can develop serious problems if they are not corrected quickly. Like the cars, they are hard to steer and don’t respond well to changes in direction. Alignment is a response to the new business reality where organizational business requirements are in flux and competitive forces are turbulent, and the bonds of employee loyalty and engagement can be challenging. Old “representation-focused” approaches to diversity metrics are not strategic or performance-driven.

Mis-Alignment

 

A familiar criticism of diversity and inclusion metrics is that they are often put together in a piecemeal fashion without a clear framework of how they are relevant to the current and future business needs of the organization. Many diversity and inclusion interventions have the best intentions, but they sometimes lack this alignment or linkage to the firm’s overall strategic direction. A great majority of the measurement approaches tend to focus primarily on “activities” rather than “evidence-based outcomes and targeted results.” They are usually not built on comprehensive business needs assessments that are targeted to solve real business challenges. I will weigh in on this topic with a few thoughts in a two-part analysis. In Part 1, I will discuss four of nine steps to improve the alignment of diversity metrics. In Part 2, I will outline the remaining steps of the methodology which cover a wide range of actions to build practical approaches to verify the organization’s strategic business needs.

I am fond of saying that “focusing on tactics without a strategic framework is like learning to run faster in the wrong direction.” You cannot make a strategic contribution without a tight alignment and linkage to the business objectives and success metrics of the organization. If you want to have your interventions resonate with the C-suite and line managers, they must be based in the real bottom-line needs that drive organizational performance. Whether it is diversity training to teach cultural competency skills, selling products to emerging market clientele, innovating new products and services for a global market, delivering health care services, serving governmental constituents, meeting a wide range of student needs, etc., strategically aligned diversity measurement strategies have the best chance at success and sustainability.

Let’s look at an example that helps to clarify this relationship. First, among the organization’s strategic objectives, you find a series of crucial performance areas. One of these focuses on an objective of improved customer service. Based upon the importance of this area to the business, the diversity organization has created a corresponding strategic objective to analyze and improve service across all demographic market segments.

In the second step, you determine that for service to be improved in these targeted markets, the critical success factor areas must include “improved communication,” “culturally appropriate interactions,” quick access, increased satisfaction and accurate information.

Finally, these critical success factor areas lead you to select diversity performance measures and indicators that support each critical success factor area such as the “percentage of multilingual service transactions delivered,” “number of rings to answer,” “percentage of favorable response on the diverse customer satisfaction survey,” etc. This type of alignment drives improved performance and gains top management support.

What Is Top Management Support?

Top management support is not a speech or a memo; it is real actions taken by the leadership function in an organization that undergirds building a successful diverse and inclusive work environment. It is not something nice that the president or CEO of the organization mentions in a speech. It is a continuing commitment backed up by words and deeds over a sustained period of time. It means a strong personal involvement on the part of management in shaping the diversity vision and accountability of leaders, employees and others. In a word, it requires commitment.

Diversity leadership commitment can be defined as demonstrated evidence and actions taken by leaders to support, challenge and champion the diversity process within their organization. It reflects the degree to which the organization’s leaders utilize behaviors that set the diversity vision, direction and policy into actual practice. It also reflects the individual level and degrees of accountability leaders have in forging an implementation strategy, and it analyzes the level of specific behavior they exhibit as a model diversity champion.

From an organizational change point of view, Diversity leadership commitment is the behavior that helps establish a direction or goal for change (a vision), provides a sense of urgency and importance for the vision, facilitates the motivation of others, and cultivates necessary conditions for achieving the vision. Diversity leadership commitment is critical to the diversity change process. It cannot be delegated or given just tacit consideration. It is clear that the CEO of the organization and heads of the main operating units have primary responsibility for breakthrough progress on diversity. If they do not hold themselves accountable for the leadership requirements to execute diversity initiatives, the change effort is doomed to failure.

Diversity officers and their staffs have a crucial role to play as facilitators of the diversity change process. Leaders alone cannot be held responsible for making it happen. As a unifying force, Diversity leadership commitment throughout the organization serves as a key lynchpin for success that is combined with the efforts of others to sustain forward progress.

Defining diversity performance measures that help sustain alignment can be broken down into three steps: first, identifying specific diversity objectives; second, determining where and how the organization must succeed to accomplish each diversity performance objective, spelling out the wheres and hows as a set of critical success factor areas; and finally, selecting diversity performance measures for each critical success factor area. These measures help determine if the organization is in fact performing well on its objectives. Diversity performance measures are the tools we use to determine whether we are meeting our objectives and moving toward the successful implementation of our strategy.

How Do You Begin the Alignment Process?

If you want to successfully align your diversity measurement process with the business strategy of the organization, you can utilize a nine-step method to improve and effectively calibrate your work.

Linkage Graphic using Puzzle Piece

Step 1: Start Thinking of Diversity and Inclusion Metrics as a Critical Part of the Business. It is important to discard the idea that diversity and inclusion is separate from the rest of the organization or can be addressed by simply implementing a series of well-intentioned activities. All diversity interventions must be measured and integrated with the ongoing operational activities of the organization. It requires conducting an analysis to set as top priority those metrics that help the organization meet its strategic objectives.

It is also important to get copies of the organization’s strategic business plans and mine them for ideas, impacts and consequences. Meet with key managers to talk about their plans. Determine where they will need diversity and inclusion support and ROI-based metrics to measure their success. You should also look for new technologies, organization changes, new product lines and new company directions.

Step 2: Learn the Business! Knowing the business is critical to the alignment process. If you want to talk with managers coherently about their challenges, you must know the business and how it affects their business, especially the financial end. It is crucial to know things such as company earnings per share, net profit as a percent of sales, gross profit margin, net income, etc.

It is important to talk with colleagues in the accounting and strategic planning departments about the state of the business. Study the annual reports and anything else you can get your hands on until you are comfortable with the company’s financial objectives and competitive position. Know the company’s ROI numbers, sales figures, operating profit, debt-to-equity ratios and cash flows.

You should be conversant about new business ventures and the company’s direction. Know your company’s products and services. Learn what’s selling, what’s not and why. Alignment requires that you are able to identify with line management priorities to build understanding and credibility.

Step 3: Develop Measurement Strategies and Activities That Line Managers Want.

Start identifying business and line department priorities first, then focus on diversity and inclusion priorities. This is called being other-centered. It improves the diversity metrics alignment by creating a business context for developing analytics solutions. Use your study of strategic plans, operating reports and talks with line managers to locate an appropriate set of metrics to evaluate your diversity interventions. It is critical to get customer input and feedback on proposed initiatives.

Step 4: Involve Top Management. Top management’s involvement is critical to the alignment process. Therefore, it is important to interview them and ask what organizational needs they consider important. You must complete research at all levels of the organization to create a comprehensive measurement strategy.

Develop a master plan by department, level or position to focus your diversity metrics strategy. This means conducting a utility analysis to determine which metrics are critical, important or nice to include to effectively assess the success of the diversity intervention. Use leaders and managers as much as possible as subject matter experts versus your own process knowledge to gauge the performance gap that exists. Once the specific gap is known, an appropriate diversity intervention can be designed.

In the next segment (Part 2), I will cover the remaining steps in the process and a wide range of actions and metrics to build additional approaches to align with the strategic business needs of the organization.

 

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Engaging in Fact-Based Diversity ROI

The roadblocks to measuring diversity and inclusion no longer exist. It is possible to evaluate so-called soft projects with a well-defined diversity ROI process and methodology.

de_1209_diversitybythenumbers_blog_v1_680x300jpgThere has been a shift from faith-based to fact-based investing. Soft functions such as a leadership development, employee engagement or diverse work team programs are often assumed to be making a difference. This suggests it would be difficult to measure and place a monetary value on the project, and more difficult to connect the particular initiative to a business impact measure.

Things have changed. These roadblocks no longer exist, and it is possible to evaluate so-called soft projects credibly with a well-defined diversity return on investment process and methodology. Executives want to see their organization engage in fact-based investing and show the monetary value of that investment with credible data.

For example, a study conducted by Chief Learning Officer magazine’s Business Intelligence Board involving 335 chief learning officers. It reveals interesting results describing the current and future use of ROI. According to the “2015 Measurement and Metrics” study, 36 percent of the CLOs use business impact data to show the impact of the training organization on the broader enterprise; 22 percent of the CLOs use ROI data for the same purpose.

Some 23 percent plan to implement ROI in the next 12 months, and 10 percent plan to implement it in the next 12- to 24-month time frame. Also, 17 percent plan to implement it with no particular time frame. This means almost 50 percent of the CLOs plan to implement ROI in the future. When that number is added to the current use, this suggests that 71 percent of CLOs are either using or plan to use ROI in the future. Diversity and inclusion leaders would be wise to make similar plans.

The study also revealed a desire to see the value of projects and programs before they’re implemented. Before the recession, this was not so much of a concern. However, since the recession, this is a typical request, particularly if the investment is large. If you are building a $4 million wellness and fitness center, you need to show the ROI in advance. If you plan to implement a $5 million diversity leadership development program, you might have to show the diversity ROI in advance. Forecasting in advance is important, allowing everyone to consider how the project works and how it delivers results.

Companies often struggle to evaluate whether their diversity and inclusion initiatives meet business needs and if they are worthwhile investments. Knowing how to construct and use diversity ROI-based metrics and predictive analytics is a mandatory skill and competency that all diversity and inclusion professionals must possess to be seen as credible. When diversity professionals are competent and capable of properly using such approaches — showing the costs versus benefits of major diversity and inclusion programs, this demonstrates the ultimate level of accountability. It demonstrates a value that executives understand, appreciate and desire.

The beauty of predictive analytics for diversity and inclusion is that it uses leading measures — intention and adoption — as a signal of results or impact. If leading indicators are below predicted success thresholds, adjustments can be made to realize desired results. This reduces risks associated with the investment and takes diversity measurement applications well beyond “faith-based” assumptions to “fact-based and evidence-based” diversity and inclusion outcomes.

Anyone responsible for diversity and inclusion initiatives is also responsible for evaluation. The amount of evaluation you provide depends on the types of decisions your organization must make and the information needed to make those decisions. For instance, there are seven levels you can use in the Hubbard Diversity Return on Investment Evaluation Methodology to demonstrate initiatives’ performance impact:

  • Level 0: Business and performance needs analysis
  • Level 1: Reaction, satisfaction and planned actions
  • Level 2: Learning
  • Level 3: Application and behavioral transfer
  • Level 4: Business impact
  • Level 5: Diversity Return on Investment, benefit to cost ratio
  • Level 6: Intangibles

They provide a comprehensive “chain of impact” to demonstrate the specific diversity and inclusion affect link.

So, how do your diversity and inclusion efforts measure up? What are you doing to show that the diversity and inclusion initiatives you deliver add “evidence-based” and “fact-based” value to the organization and its bottom line in real measurable terms?

Sharing your ideas can provide a “teachable moment” for others. What challenges do you face? Let me hear from you, and I will provide a few recommendations. I look forward to hearing from you.

Dr. Ed Hubbard is the President & CEO of Hubbard & Hubbard, Inc., and recognized as the Founder of the Diversity Measurement and Diversity ROI Analytics fields. Dr. Hubbard is an expert in Organizational Behavior, Organizational Analysis, Applied Performance Improvement and Measurement Strategies, Strategic Planning, Diversity Measurement, and Organizational Change Methodologies. He holds a Practitioner Certification and Master Practitioner Certification in Neurolinguistic Programming (NLP), a Neuro-science discipline. Dr. Hubbard earned Bachelors and Masters Degrees from Ohio State University and earned a Ph.D. with Honors in Business Administration.

For more information about the Hubbard Diversity ROI Institute, log onto http://www.hubbardnhubbardinc.com/certification-workshps.html

Dr. Hubbard can be reached at edhub@aol.com.

 

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Diversity Training Pros Must Get to Know ADDIE

de_diversitybythenumbers_blogDEC_680x300Why should we evaluate diversity training? One primary reason is to determine if the benefits derived from the training program justify the costs. Some other reasons could be:
  • To determine how well the diversity training initiative met participants’ needs and to what extent the participants mastered the content.
  • To assess how much of the diversity training content, including newly acquired knowledge and skills, transferred to on-the-job behaviors.
  • To determine whether the results of the diversity training contributed to the achievement of organization’s goals.
  • To determine the initiative’s Diversity Return on Investment.
The ISD Process
ISD is a systems approach to analyze, design, develop, implement and evaluate any type of training. Each phase of the ISD process provides information that feeds directly into the next, as each phase must be completed before moving on to the next. If a phase is skipped, the process is not ISD.
Professionally created diversity training follows this five phased process: analysis, design, development, implementation and evaluation — commonly referred to as the “ADDIE model.” In ADDIE, analysis is the input for the instructional system; design, development and evaluation are the process; implementation is the output. These elements overlap somewhat, depending on the project, and because the instructional system is dynamic, there will be some sharing of duties.
Phase 1: Analysis
The analytical phase is sometimes referred to as a “front-end analysis,” “needs assessment” or “needs analysis.” An effective needs analysis answers the following questions:
  • What is the problem?
  • Is diversity training the answer to the problem?
  • What knowledge and skills should be included in the diversity training course?
  • Who needs to be trained?
Analysis is the data-gathering element of diversity training design. Here diversity instructional designers assemble all the information they can possibly gather about the strategic business problem or opportunity before they consider anything else.
Phase 2: Design
After the problems have been defined and trainees and course outcomes have been determined, it is time to begin the design phase. This phase develops a training blueprint that includes:
  • Learning objectives
  • Content outlines
  • Course structure
  • Training methods and media
Design is the blueprinting stage of instructional systems during which diversity instructional designers create the project blueprint with all the specifications necessary to complete it. During this stage, diversity instructional designers write the objectives, construct course content, and complete the design plan.
Phase 3: Development
The next phase of the ISD process is development of the diversity training course. The steps of this phase are:
  • Develop a draft set of training materials.
  • Pilot test the training materials with the target audience, and make necessary revisions.
  • Finalize training materials.
Materials production and pilot testing are the hallmarks of development. Everything from lecture notes to virtual reality is brought from design to deliverable. Before diversity instructional designers move from development to implementation, it is wise for them to do pilot testing to ensure deliverables do not need revision. The pilot testing process allows organizations to implement any necessary changes before expenses associated with materials development are realized. Pilot testing also helps designers feel confident what they have designed works.
Phase 4: Implementation
The implementation phase involves conducting the diversity training program and completing any related follow-up activities to ensure learning transfer on the job. At implementation, the design plan meets the leaner, and content is delivered. The evaluation process most diversity designers and learners are familiar with takes place in this element. Diversity training evaluation is used to gauge the degree to which learners meet objectives and facilitators or technologies deliver expected outcomes.
Phase 5: Evaluation
The final phase of the ISD process is to determine whether diversity training was successful. It will answer the following questions:
  • What is diversity training evaluation?
  • Why evaluate diversity training?
  • What are diversity training evaluation levels?
  • How is the diversity training analysis and diversity evaluation linked?
  • How is an effective diversity training evaluation conducted?
Evaluation doesn’t deserve to be listed last in the ADDIE model because it takes place in every element and surrounds the diversity instructional design process. Evaluation is a constant guard at the gate of failure.
The advantages of using an instructional system are numerous, the most important being the ability to design diversity projects quickly and efficiently. Nothing is left to chance or ignored when a diversity instructional designer stays within the ADDIE framework or other ISD models. It is my contention that an effective ROI-based diversity training evaluation cannot be completed unless the training design was built using ADDIE and a behaviorally specific competency model built on correctly structured objectives.
Do you know and use ADDIE?
 

“Evaluation, Reliability, and Validity: How Credible are Your Diversity Initiative Assessments of Progress and Results?”

Performance MeasurementEvaluation is a task that every Diversity Practitioner will face at one time or another. No matter what your role such as Trainer, Consultant, Chief Diversity Officer (CDO), Council Member, ERG/BRG Leader, etc., conducting an evaluation to assess key aspects of your Diversity and Inclusion initiatives is inevitable.

Two Definitions of Evaluation

People do not always agree on one definition of evaluation. Following are statements that reflect two different definitions:

  • “Evaluation is the systematic process of collecting and analyzing data in order to determine whether and to what degree objectives have been or are being achieved.”
  • “Evaluation is the systematic process of collecting and analyzing data in order to make a decision.”

Notice that the first ten words in each of the definitions are the same. However, the reasons-the “Why!”-for collecting and analyzing the data reflect a notable difference in the philosophies behind each definition. The first reflects a philosophy that as an evaluator, you are interested in knowing only if something worked, if it was effective in doing what it was supposed to do. The second statement reflects the philosophy that evaluation makes claims on the value of something in relation to the overall operation of a Diversity intervention, project, or event. Many experts agree that an evaluation should not only assess program results but also identify ways to improve the program being evaluated. A Diversity program or initiative may be effective but of limited value to the client or sponsor. You can imagine, however, using an evaluation to make a decision (the second definition) even if a program has reached its objectives (the first definition).

For some, endorsing Diversity Evaluation is a lot like endorsing regular visits to the dentist. People are quick to endorse both activities, but when it comes to doing either one, many Diversity Practitioners are very uncomfortable.

Evaluation: An Essential Element of Success

Evaluation is an absolutely essential ingredient when you are attempting to close performance gaps or improve performance. It is the only way to determine the connections between performance gaps, improvement programs, and cost-effectiveness. Evaluation is one of the most cost-effective activities in diversity performance improvement, because it is the one activity that, if applied correctly, can ensure success. It is often resisted, however, because of the fear that it could document failure. Evaluation is the process that helps us make decisions about the value of all the activities we have been engaged in and whether they are a worthwhile investment for the organization. Without systematic evaluation we are left with “wishful thinking” or self-service impressions that are often wrong and sometimes dangerous.

All evaluation studies must satisfy two criteria: reliability and validity. Establishing these criteria up front will help you communicate your expectations to the C-Suite and any vendors who deliver programs and assist in your Diversity initiatives. Reliability, the simpler of the two, requires all evaluation methods give the same results each time we measure. This protects you against measures that change constantly and produce different results every time they are used, because of the measuring instrument. Reliability is relatively easy to achieve, yet its importance is often overlooked. To overcome this you must utilize specific Diversity science procedures and instruments for measuring the aspects of Diversity performance and goal achievement that are reflected in the initiative’s objectives, strategies and the organization’s performance gaps. Next, you have to standardize these procedures such that they measure in the same way every time. These activities can be perfectly compatible with the way correctly designed Diversity initiatives are structured and administered.

The second criterion, validity, requires that all evaluations measure exactly and only what it is supposed to be measuring. This criterion is one of the requirements most often violated in Diversity performance and other assessments. For example, if we attempt to measure the amount of knowledge employees gained in a Diversity Competency Training program using a “Reaction” form that asks them how much they learned, the results will indicate how much employees “think” they learned, not how much they “actually” learned. Reaction forms too often report high amounts of learning when little occurred and vice versa (Clark, 1982). Consequently, training reaction evaluation could be reliable but not valid in these cases, because the actual results were the opposite of what the invalid instrument reliably reported! If the instrument reported the same invalid result each time it was used, it is still reliable—which is why we need both reliability and validity for all evaluation activities.

An example of a valid measurement of learning would be a Diversity competency problem-solving exercise or memory test (provided they represented the knowledge and skills the participants learned during the training. The more you make use of Diversity sciences and research evidence about the event being measured, the better your chances of for validity. Performance evaluation systems such as the Hubbard 7-Level Evaluation Methodology, integrates these approaches in the process.

Conducting a comprehensive Diversity Evaluation is the only true way to know if Diversity and inclusion programs or initiatives are delivering the outcome results expected by key stakeholders. It is essential that Diversity Practitioners master critical Diversity and Inclusion evaluation methods using technologies that are rooted in Diversity ROI® science. Why? Because the perceived value and credibility of what we do to be seen as a true Business Partner and Professional depends on it!

 

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Diversity ROI Measurement Skills in Small Doses: Moving beyond Excuses

CEOs Want to Know the Impact of Diversity ROI on Initiatives but Aren’t Getting It!

A recent study of CEOs analyzing what CEOs want from their Diversity organizations concluded that CEOs want to see the impact and ROI of their Diversity investments but instead receive only activity and satisfaction data. So, why aren’t Diversity & Inclusion Executives, Managers, Practitioners, etc. measuring their impact and sharing with their CEOs? After all, this is not exactly a revelation. Some of the leading reasons are lack of resources, lack of support from the CEO, lack of funding, lack of skills, etc. My take: these are all just excuses since there are a huge number of resources, books, workshops, etc., available. This strongly suggests that many Diversity Practitioners need a serious skill update or should excuse themselves out of the job. If they remain without these skills, at some point, they may face elimination and/or extinction.

This is the 21st Century, with its emphasis on cutting edge as well as “State of the Practice” technological and analytical advances, yet Diversity Practitioners are using old-fashion measurement skills where the wheels immediately come off of their measurement system wagons. We haven’t been in the “Old West” of Diversity measurement for quite a few decades. State of the Art Diversity ROI processes have been here for quite some time.

 

Accountability Trends

Many enlightened business managers often take a professional business approach to Diversity, with ROI being part of the strategy. Top executives who watched their diversity budgets continue to grow without appropriate accountability measures have become frustrated with this approach. In an attempt to respond to the situation, they have turned to Diversity Return on Investment (DROI®). Top executives are now demanding DROI® calculations from Diversity departments where they were not required previously.
So, what factors prevent us from mastering Diversity ROI measurement? Here are a few excuses I hear that Diversity Practitioners say are consistently challenging and “Small Doses” to begin to address them:

Issue-1: Lack of Skills and Orientation
Many Diversity staff members neither understand ROI nor do they have the basic skills necessary to apply the process within their scope of responsibilities. Diversity ROI Measurement and evaluation is not usually part of the preparation for the Diversity job or taught as part of a university education focused on diversity. Also, the typical Diversity training program or intervention does not focus on results, but more on diversity awareness concepts, activities, or other issues. Staff members attempt to measure results by measuring learning only instead of the full range of Diversity performance intervention outcomes (at all 7 levels) that drive business. Consequently, this is a tremendous barrier to implementation that must be changed such that the overall orientation, attitude, and skills of the Diversity staff member are focused on business results, impact, and/or outcomes.

Small Dose-1: Build DROI® Skills and Measurement Orientation
Don’t wait until you are asked about the DROI® of your Diversity intervention to gain competency and business acumen in this area, start learning about DROI® today! Attend a Diversity ROI Webinar, Workshop, Read books on Diversity ROI, Use DROI® Tools, etc.

Issue-2: Faulty Needs Assessment
Many existing Diversity interventions are not based on an adequate needs assessment. Some diversity interventions have been implemented for the wrong reasons based on requests to chase a popular fad or trend in the industry. Even worse, they schedule training for everyone in the organization costing thousands or millions of dollars with NO measurable DROI®. If the intervention is not needed, the benefits from the program will be minimal or wasted. A DROI® calculation for an unnecessary program will likely yield a negative value. This barrier can be eliminated by training and certifying Diversity Executives and Practitioner in programs such as the Hubbard Diversity ROI technologies, training measurement workshops, etc.

Small Dose-2: Learn the Detailed Steps to Conduct a Comprehensive Needs Assessment
Needs analysis is the cornerstone of any Diversity performance analysis effort. It provides you with appropriate justification for either developing or not developing your Diversity intervention. You must conduct a needs analysis, no matter how abbreviated, before any Diversity intervention takes place.
The objectives of a needs analysis are to:
• Describe the exact nature of a performance discrepancy
• Determine the cause(s) of the discrepancy
• Recommend the appropriate solution(s)
• Describe the target population

Issue-3: FEAR
Some Diversity departments do not pursue DROI® measurement implementation due to fear of failure or fear of the unknown. Fear of failure appears in many ways. Designers, developers, facilitators, and program owners may be concerned about the consequences of a negative DROI®. They fear that the DROI® measurement process will be a performance evaluation tool instead of a process improvement tool. Also, the DROI® process will stir up the traditional fear of change. This fear is often based on unrealistic assumptions and a lack of knowledge of the process.

Small Dose-3: Overcome FEAR by Taking Action
The best way to overcome FEAR is by (a) taking action, (b) generating results, (c) evaluating the outcome, and (d) implementing improvements. FEAR is often based on a lack of knowledge so the antidote is to “learn” and “master” the DROI® skills and processes.

Issue-4: Discipline and Planning
A successful DROI® evaluation implementation requires much planning and a disciplined approach to keep the process on track. Implementation schedules, evaluation targets, DROI® analysis plans, measurement and evaluation policies, and follow-up schedules are required. The Diversity Change Management team may not have enough discipline and determination to stay on course. This becomes a barrier, particularly if there are no immediate pressures to measure the return. If the current senior management group is not requiring a DROI® evaluation, the Diversity Change Management team may not allocate time for planning and coordination. Also, other pressures and priorities often eat into the time necessary for an effective DROI® evaluation implementation. Only carefully planned implementation efforts succeed.

Small Dose-4: Build DROI® Discipline and Planning Focus
There is really no substitute for implementing a thorough approach to a DROI® evaluation process. It must be implemented using effective project planning and management skills as well as following the DROI® methodology according to each step in its design.

Issue-5: False Assumptions
Many Diversity staff members have false assumptions about the DROI® process that keep them from attempting DROI®. Typical assumptions include: (a) The impact of intervention cannot be accurately calculated, (b) Operating managers do not want to see the results of Diversity expressed in monetary values. They won’t believe it, (c) If the CEO does not ask for the DROI®, he or she is not expecting it, (d) CDO denial – “I have a professional, competent staff. Therefore, I do not have to justify the effectiveness of our programs”, (e) Learning or this type of intervention is a complex but necessary activity. Therefore, it should not be subjected to an accountability process, etc. These false assumptions form perceptible barriers that impede the progress of a DROI® evaluation implementation.

Small Dose-5: Eliminate Any False Assumptions
Let’s face it, the DROI® evaluation process and its associated analytics are here to stay. It’s only realistic that Diversity practitioners eliminate any false assumptions, wishful thinking and/or outdated measurement paradigms. In the future, there is likely to be even more demands for DROI® analysis feedback, demonstrated credibility and intervention performance value that tie to the organization’s bottom line.

Using these processes has the added benefit of improving the effectiveness of all Diversity interventions we conduct. Only those Diversity Practitioners who can operate as full strategic business partners will have what’s needed to survive for the long term. Do You Have What It Takes To “Survive”, “Thrive”, and “Drive” Real Business Performance using Diversity & Inclusion?

 

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Why Diversity & Inclusion Professionals Need Predictive and Other Analytics

Challenges of Diversity Metrics

There’s a fair amount of buzz around Diversity measurement and analytics. Advances in software, newly-available data sources, and how-to manuals have made it easier gain access to Diversity measures. Although interest in measuring the effects of diversity has been growing, the topic still challenges even the most sophisticated and progressive diversity departments. Many Diversity professionals and practitioners know they must begin to show how diversity is linked to the bottom-line or they will have difficulty maintaining funding, gaining support, and assessing progress.

The Data-to-Wisdom Continuum

Over the past several years, Diversity journals abound with volumes of information about the impact of a diverse workforce, primarily from a talent representation point of view focusing on organizational make up covering race, rank, and gender (counting heads). Many of these Diversity professionals are working with inconsistent, basic information and have yet to move from being reactive to proactive and predictive. In short, they have made little progress along the data-to-information-to-wisdom continuum needed to provide sophisticated diverse workforce insights that are critical to strategic decision making. How would you respond to the following questions?

  • Do you struggle with defining or measuring the success of Diversity initiatives or other Diversity interventions?
  • Are you constantly fighting the battle to show and justify the value that Diversity initiatives or other Diversity interventions are bringing to your organization?
  • Does your organization view Diversity initiatives or other Diversity interventions as an expense versus an investment with predicted returns?
  • Do you need to link Diversity initiatives or interventions with the value it produces for your company?
  • Do you need a method of predicting (forecasting) the value of Diversity initiatives or other Diversity interventions to help decide whether to train and/or do something else?
  • Are your current Diversity evaluation efforts always after the fact–do you need a way to measure success using leading indicators that drive continuous improvement?

If you answered yes to any of these questions, then Predictive Analytics for Diversity is for you.

For the past 8 years, I have been researching and developing a new comprehensive “Predictive Analytics for Diversity” approach and framework that addresses all of the above questions and more. My goal often is to create the “next-level” of Diversity ROI-based tools that give Diversity professionals a competitive edge and alignment to drive business performance and results. The Hubbard Predictive Analytics for Diversity framework is designed for professionals looking to break new ground to demonstrate the strategic ROI value of Diversity and Inclusion, or breathe life into floundering Diversity initiatives that have little evidence-based value.

What are Analytics

Analytics come in different types with a specific focus. They can be defined as follows:

  • “Analytics” is the Science of Analysis
  • “Descriptive Analytics” tells what has happened in the past and usually the cause of the outcome.
  • “Predictive Analytics” focuses on the future telling what is likely to happen given a stated approach.
  • “Prescriptive Analytics” tells us what is the ‘Best’ course of action.

Descriptive Diversity analytics can help us understand human capital challenges and opportunities in utilizing a diverse workforce. Whereas Predictive Diversity Analytics, helps us to identify investment value and a means to improve future outcomes from Diversity interventions and initiatives.

Companies struggle with evaluating whether their programs meet business needs and whether they are worthwhile investments. Reasons given for not measuring Diversity’s impact on business outcomes include statements such as “It is too difficult to isolate Diversity’s impact on results versus the impact of other factors”, or “Evaluation is not standardized enough to compare well across functions”.

Sound business practices dictate that Diversity & Inclusion professionals collect data to judge progress toward meeting the organization’s strategies and annual multi-year objectives. The Hubbard Predictive Analytics Framework, for example, is a new approach that provides compelling Diversity & Inclusion (D&I) data to executives, including:

  • predicting success of the D & I intervention in the three areas of Intention, Adoption, and Impact and measuring to see if success has been achieved;
  • leading indicators of future adoption (transfer of the intervention outcomes) and Impact (business results);
  • making recommendations for continuous improvement; and
  • isolating Diversity and Inclusion’s impact versus the impact of other factors.

The beauty of Predictive Analytics for Diversity is that it uses leading measures (Intention and Adoption) as a signal of results (Impact). If the leading indicators are below predicted success thresholds, actions can be implemented to “make adjustments” so that the desired results are realized.

You can interweave outcomes and leading indicators into Diversity interventions during the design and delivery phases to enhance their predictive validity and consistency in achieving sustained benefits. Predictive Analytics practices helps Diversity and Inclusion organizations move from an event-driven function to one that predicts success, measures its performance against those predictions, and is seen as returning significant shareholder value for the funds invested.

Benefits of Predictive Analytics for Diversity

The area of human capital analytics and “big data” has been around us for a while, yet I have found few Diversity professionals who are ready to step up to the challenge and opportunities that utilizing Predictive Analytics for Diversity offers. The greatest strength of a Predictive Analytics approach for Diversity is the active involvement of stakeholders setting their own intentions and measurement of adoption rates. This adds a high level of credibility to the practice of forecasted Diversity outcomes. To reap its benefits, it requires a genuine commitment to implementing a “science-driven”, rigorous approach to demonstrate Diversity’s value as a worthwhile business investment.

In addition, predictive analytics practices involving Diversity and Inclusion must implement measurement approaches based upon “utilization” (making heads count) not merely representation (counting heads). The presence of Diversity alone does not ensure progress, the strategic utilization of Diversity does. Diversity’s ability to add investment value and improved capability means, at least to some degree, the ideas, creativity, new perspectives, etc., generated from a diverse workforce have been applied and have generated a modicum of benefits. Predictive Analytics for Diversity and Inclusion offers tremendous insights into the value of a Diversity and Inclusion initiative’s approach and creates “informed-choice” decision making potential.

A recent monograph published by The Conference Board cited that organizations begin their analytics journey by using data at hand. Most organizations have access to an employee head count that decision makers can use to manage staff cost. This usage is akin to organizations that simply use head count data to reflect race, rank, and gender to ensure ethnic Diversity is present at all levels. Other organizations, however, use people data to make real-time staffing decisions to help drive revenue and performance. MIT Sloan Management Review, in collaboration with IBM Institute for Business Value, describes a continuum representative of organizational capability with analytics. They conducted a survey of more than 3,000 business executives, managers, and analysts from organizations around the world. Based on “how thoroughly their organization had been transformed by better uses of analytics and information,” the authors segmented respondents’ organizations into three categories:

1) Aspirational organizations that use analytics to justify actions. The focus is primarily on efficiency rather than revenue growth, and they have limited ability to capture and analyze data to make decisions.

2) Experienced organizations that build on what they learned at the aspirational level and use analytics to guide actions. They focus on revenue growth, with less focus on efficiency. While they still lack an understanding of how to leverage analytics for business value, they are moderately skilled at capturing, aggregating, and analyzing data to make decisions.

3) Transformed organizations are highly skilled in analytics across functions. They use analytics as their competitive differentiator. These organizations focus more on revenue growth and less on cost than either the aspirational or experienced organizations. Data analysis includes the most rigorous approaches to make decisions using insights to guide future strategies as well as day-to-day operations. According to the MIT study, organizations described as transformed are “three times more likely than aspirational organizations to indicate that they substantially outperform their industry peers.”

Applying this three-tier framework to your organization’s use of analytics for Diversity, what level of practice and application does its use of metrics reflect: Aspirational, Experienced, or Transformed? Are you ready for the full implementation of Predictive Analytics for Diversity and Inclusion as an integrated practice in your organization’s Diversity measurement strategy?

Beyond these benefits, you may be wondering why should Diversity professionals learn these new analytic skills? No one is really asking us to provide measures other than “representation”, “rank” and “gender”. Looking at a few numbers helps to answer this question. Let’s start with intangibles for example – organizational assets that are not physical in nature. Intangibles include intellectual property, knowledge, reputation, etc. These sorts of assets represent an ever-growing percentage of the average organization’s market value, increasing dramatically from 9 percent of market value in 1980 to 65 percent today.

And what do all forms of intangibles have in common? They’re created by people. A few decades ago, if you wanted to increase your company’s value, you focused on managing your physical assets – plants, equipment, etc. Today, if you want to increase value, you need to manage your people – your human capital.

This, more than anything else, explains why analytics are now an essential strategic Diversity professional competence area. Executives and boards of directors are always focused on company value. Today, that means they need to be focused on their people. Some companies and Diversity practitioners recognized this earlier than others, and some companies have done a better job managing their people. How have those companies fared? Extraordinarily well!

A Boston Consulting Group study from 2012 found that companies appearing on the Fortune “100 Best Companies to Work For” list at least three times in a ten-year period cumulatively outperformed the market by an average of over seven percentage points per year for ten straight years.

All told, the numbers certainly support the world’s current fascination with analytics – and suggest that focus will continue to intensify in the years to come. Are you on board? If so, you will find an informative body of knowledge and insights waiting for your use to drive strategic performance improvement and success for your organization!

 

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Diversity Process Consulting or Intervention Consulting: How Do We Demonstrate Our Unique Value?

Building an Effective Diversity Measurement System

The creation of an effective Diversity measurement system and “best” practices cannot be a mechanical modeling exercise. It must be preceded by an inspection and utilization of basic business principles. It must focus on organizational and departmental strategic thinking as well as an assessment of the desired quality of work-life. Developing the actual measures is easy compared to the amount of time that should be spent thinking about what is important to the organization’s strategic business objectives and the expectations of the diversity measurement process.

Key steps to building an effective measurement system

Creating an effective Diversity measurement system and process that embodies these concepts involves at least five critical steps:

  • Review the Strategic Business Plan for Needs
  • Formulate Research Questions
  • Design the Study Methodology
  • Collect and Analyze Data
  • Implement Solutions and Communicate Results

Each step in the process logically builds on the previous step which generates an evidenced-based framework that creates a “Best Practice” method for proving Diversity’s link to performance.

With proper training and skill/competency development, one of the more critical roles a Diversity Practitioner and Professional can perform is that of a Diversity Performance Consultant/Technologisttm. This role in the Hubbard & Hubbard, Inc. Diversity Discipline Framework requires the Practitioner to design, develop and deliver or evaluate diversity performance solutions; maintain and apply an in-depth working knowledge in any one or more of the diversity performance improvement areas of expertise; take a disciplined approach to assessing individual and organizational effectiveness in the midst of collective mixtures of differences and similarities, diagnose causes of diversity tensions from differences, similarities and complexities, and recommend a set of interventions; as well as design solutions to improve diverse workforce performance and/or solutions to improve the organization’s performance.

I have always viewed Diversity ROI & Inclusion methods as “performance improvement technologies”. I am also a strong supporter of participatory approaches to performance improvement, from involving stakeholders in the identification of needs and their causal factors to determining solution alternatives, selecting the solution, planning and managing the change, and monitoring and evaluating the change. This active stakeholder participation is critical to the sustainable success of any Diversity & Inclusion (D&I) intervention, not only because we gain real buy-in from stakeholders, but also because part of what we do as rigorous Practitioners ultimately, is to change the way people think about and approach D&I performance solutions in organizations.

Diversity Intervention Consulting is primarily focused on a specific transaction, the provision of an intervention (e.g., Cultural Competency Skills for Leaders training), whether it is a specific process or product. In this case, the performance consultant, as “expert,” carries the bulk of the responsibility for delivering the intervention, but does not typically stick around for the consequences of such interventions. Partially rooted in the sociological tradition in new systems theory which views organizations as self-organizing social systems, Performance/Process Consulting provides a different approach. With a Performance/Process Consulting approach, however, the Diversity Performance Consultant/Technologisttm and the client are equal partners who share the responsibility for the desired change. There is a reduced chance of falling into fads or trendy solutions that may be insufficient or not fully applicable to the organizational realities, because both the Diversity Performance Consultant/Technologisttm and the client are partners in the change and its consequences. Both have a stake in the success of the intervention, and both learn lessons along the way. Moreover, they involve others in the organization, so that these lessons learned benefit more than just a few.

I am convinced that the real value of our work is much more than a roster of interventions (no matter how evidenced-based); rather, it is the paradigm shift that we contribute to in the course of our involvement with our stakeholders. Our ultimate value is in the sustainable and positive change of the organization’s performance system that is now able to operate at its goal or outcome level. While neither resource was utilized exclusively, it is certainly worthwhile for us to reflect on our own approach and determine whether we consciously or subconsciously assessed the situation to determine what balance or blend would be of most value for the given situation.

It is always helpful to review our Performance Consulting approach because of the wide range of relevant topics and ROI-based metrics that fit under the performance improvement umbrella. I am fond of saying that “focusing on tactics without a strategic framework is like learning to run faster in the wrong direction”. You cannot make a strategic contribution without a tight alignment and linkage to the business objectives and success metrics of the organization. If you want to have your interventions resonate with the C-suite and line managers of the organization, they must be based in the real bottom-line needs that drive organizational performance. Whether the organizational initiative is diversity training to teach cultural competency skills, selling products to emerging market clientele, innovating new products and services for a global market, delivering healthcare services, serving governmental constituents, meeting a wide range of student needs, improving the customer service experience, etc., “strategically aligned” diversity performance strategies have the best chance at success and sustainability.

Let’s take a look at an example that helps to clarify this relationship. First, among the organization’s strategic objectives, you find a series of crucial performance areas. One of these areas focuses on an objective of improved customer service. Based upon the importance of this area to the business, the diversity organization has created a corresponding strategic objective to analyze and improve service across all demographic market segments. In the second step, you determine that for service to be improved in these targeted markets, the critical success factor areas must include “improved communication”, “culturally appropriate interactions”, quick access, increased satisfaction, and accurate information. Finally, these critical success factor areas lead you to select diversity performance measures and indicators that support each critical success factor area such as the “percentage of multilingual service transactions delivered”, “number of rings to answer” when a customer calls the organization, “percentage of favorable response on your diverse customer satisfaction survey”, etc. This type of alignment drives improved performance and gains top management support.

Both Diversity Process Consulting and Diversity Intervention Consulting can offer strategic value to the organization. The key is how well each Performance Consulting method meets critical needs of the business to drive its goals, outcomes and success. At what value level would stakeholders rate your internal Performance Consulting methods today? What do you need to do differently to enhance your role as a value-added business partner?

Dr. Hubbard is an expert in Organizational Behavior, Organizational Analysis, Applied Performance Improvement and Measurement Strategies, Strategic Planning, Diversity Measurement, and Organizational Change Methodologies. He holds a Practitioner Certification and Master Practitioner Certification in Neurolinguistic Programming (NLP), a Neuro-science discipline. Dr. Hubbard earned Bachelors and Masters Degrees from Ohio State University and earned a Ph.D. with Honors in Business Administration.

 

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