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Category Archives: diversity alignment

The Power of Diversity ROI Measurement Alignment : Part 2

In part one; I discussed four of nine steps to improve the alignment of diversity metrics with the bottom line of the business. In this segment (Part 2), I will outline the remaining steps of the methodology which cover a wide range of actions and metrics to build practical approaches to verify the strategic business needs of the organization.

Let’s continue examining the remaining alignment steps…

Step 5: Develop Interventions that are Practical, How-To Approaches

A lot of organizations will say they have diversity measures in place. However, when you actually check them, you see that they are activity counts. They’ll look around and say they’ve established a council or have had a particular celebration on a particular day. And while those are important, senior leaders don’t always see these things as bottom-line outcomes. They’re not looking at how the Diversity process increased market penetrations in key ethnic markets or how the Diversity process has added ‘X’ number of customers. Progressive companies show how they have utilized diversity and inclusion technologies to integrate Diversity process into productivity improvement issues, product quality issues and innovation challenges.

To have credibility, Diversity interventions must be developed in a way that seamlessly integrate with key organizational priorities at critical levels and are designed in a way that employees can use them right away to improve the organization’s functioning. To accomplish this, it may require having the flexibility to move away from pure “academic images” of Diversity theory and venture into the realm of the “live-lab” of real organizational problems and challenges. It means working “hand-in-hand” with line managers as strategic business partners to solve some of the messy problems of performance improvement and change. As Diversity professionals, we must ask ourselves…who am I developing this intervention for…to go along with the latest fad that other organization’s are using or for my internal (or external) clients to help solve their real business challenges? These challenges must be verified with an effective Business Needs Analysis in order to show the benefits and ROI impact.

It is important to stay clear of theories and fads that are not strategically tied to producing organization-enhancing results. Sure, some of them can help create “out-of-the-box” thinking that may help produce new, practical approaches that could generate value. However, these ideas need to be well researched and tested for their practical strategic value and potential impact.

It is also critical to limit “Diversity and Inclusion speak” when working with internal clients and sponsors. As a Diversity professional, we should know the nuances of Diversity and Inclusion processes; however your audience does not have to be masters of it. It may take a while to gain credibility from their vantage point. This credibility will come faster when you are able to demonstrate specific, measurable results in quantitative and qualitative terms. The results and outcomes of the Diversity initiatives must show how the results are tied to the organization’s bottom-line impact. The results you obtain will improve your level of credibility, commitment and involvement, not the merits of theories and fads alone.

Step 6: Get a Handle on Diversity R.O.I. (DROI®)

DROI® is a registered trademark of Hubbard & Hubbard, Inc. All rights reserved.

It is absolutely essential to master the technologies of Diversity ROI (DROI®) analytics and measurement processes for all of the interventions you provide. It is critical to identify interventions, programs, and activities that have a measurable impact on organizational performance.

I have always thought of Diversity as a professional discipline and field of study. However, if it is to be taken seriously as a discipline and field of study, it must possess a structure, framework and critical components that are consistent with other serious disciplines. For example, if we examine the disciplines of Marketing, Sales Operations, and the like, we would find they all have well-defined competencies, proven theories, and applied sciences that under gird their application. These theories and sciences provide a recognized structure, strategy and a set of measurable standards to guide those who work in the field.

If we examine the disciplines that include doctors, engineers, lawyers, and others, they must be certified to practice their craft. There are also certifications for human resource professionals such as the PHR and SPHR certifications offered by the Society for Human Resource Management (SHRM) for Human Resource Professionals, the HPI certification for Trainers by the American Society for Training and Development (ASTD), or the CPT certification for Organization Development professionals offered by the International Society for Performance Improvement (ISPI).

The Hubbard Diversity Measurement and Productivity (HDM&P) Institute offers seven diversity certifications based in its Diversity ROI® and Diversity ROI Analytics® methodology:

  • Certified Diversity ROI Professional® (CDRP)
  • Certified Diversity Trainer® (CDT)
  • Certified Diversity Advisor® (CDA)
  • Certified Diversity Performance Consultant® (CDPC)
  • Certified Diversity Business Partner® (CDBP)
  • Certified Diversity Strategist® (CDS)
  • Certified Diversity Intervention Specialist® (CDIS)

These fields of study contain specific, identifiable roles that are performed, areas of expertise that allow a practitioner to build specialized concentrations of skills and knowledge within the discipline, detailed outputs produced by these roles, as well as a model of measurable competencies that define specific behaviors that enable the work to be completed with a high degree of accuracy and effectiveness.

As a professional discipline, Diversity ROI practices must align with key objectives and outcomes to operate with similar standards built on a solid framework of both concept and science. These practices must be delivered through the work of competent, credible Diversity professionals using clear standards of excellence linked to business performance. Using our talents and skills, based upon a competency-rich Diversity Discipline Framework™, Diversity professionals will be able to integrate the ideas underlying Diversity and Inclusion with specific measurement strategies and organizational systems theory to create a Diversity-enriched climate that utilizes diverse resources more effectively. Getting a handle on ROI means identifying units of measure for the interventions and activities that have a measurable impact on performance. We must consistently apply measurement sciences, track our interventions, and publish them as Diversity ROI studies such that they can be utilized as “best practices”.

Sample measures which support a Diversity ROI measurement alignment strategy include covering key Diversity Scorecard perspectives such as:

Workforce Profile Perspective

  • Diversity Hit Rate
  • #/ % Minorities as Officials and Managers
  • #/% Diversity Survival and Loss Rate
  • #/% Turnover by Length of Service

Workplace Climate and Culture Profile Perspective

  • % Favorable Ratings on Cultural Audit Demographic Group
  • “Employer of Choice” Ratings versus Top 5- 10 Competitors
  • Retention Rates of Critical Human Capital
  • # and Type of Policies and Procedures Assessed for Diverse Workforce Impact

It is important to design evaluations and utilize metrics that are practical and reflect a systemic analysis. For example, use before and after measures which examine Diversity intervention results compared to key measures which are already established and utilized in the organization.

It is also imperative that you are cautious and careful with the procedure to demonstrate how you isolated the Diversity ROI value from all other possible interventions (that could have contributed to the organizational benefit).  Be careful what you take credit for. In a Diversity ROI study, it is important that you only list those outcomes you can control which demonstrate a “chain-of-impact” to the outcome. Diversity intervention outputs are “inputs” that fuel contributions to line results. There are usually many intervening variable in the outcome production process. Isolation techniques must include utilizing scientific processes such as control groups, time-series analysis, forecast estimates, etc., to attribute Diversity’s contribution to specific business outcomes and benefits (separate and apart from other contributors).

Step 7: Make Some “Hard-Nose” Decisions About What is Needed

It is essential to conduct a comprehensive Business Assessment or “Needs Analysis” to determine what interventions are necessary to meet the intent of the aligned business objectives.  For example, when evaluating an organizational challenge, a practitioner may be partial to a favorite diversity intervention regardless of the problem or need. It is crucial that a scientific approach is taken where effective data collection helps determine the appropriate response, not what the practitioner favors.  Performing a comprehensive Needs Analysis is the cornerstone of implementing a solid, credible performance improvement process. It helps practitioners make “hard-nosed” decisions and provides an appropriate justification for either developing or not developing a diversity intervention.  We must conduct a needs analysis, no matter how abbreviated, before any intervention development takes place.

If a Diversity Training intervention is required, for example, the objectives of the 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 learner population

In general, Needs Analysis consists of the following steps.

  • Step 1: Identify and describe the performance discrepancies.
  • Step 2: Determine the causes of the discrepancies.
  • Step 3: Identify those performance discrepancies that are based on lack of skill or knowledge. Then identify the skills and knowledge needed that is related to diversity and diversity competence.
  • Step 4: Determine whether diversity training or another intervention is a viable solution.
  • Step 5: Recommend solutions.
  • Step 6: Describe the performer’s and organization’s role in behaviorally specific terms that relate to diversity excellence and performance.

How Are Diversity Training Analysis and Evaluation Linked to Diversity Measurement Alignment?

A needs analysis establishes the criteria for measuring the success of training after its completion. A thorough needs analysis should answer the question:

“What good will training do?”

A thorough Diversity ROI training evaluation will answer the question:

“What good did training do and what was the Return on Investment (DROI)?”

An effective Diversity ROI training evaluation cannot be conducted unless a thorough needs analysis has been completed. We cannot determine what was accomplished by a Diversity training intervention or program unless we have first defined what the program was intended to accomplish. The Diversity training needs analysis provides baseline measures against which to judge our Diversity training efforts and will help us make the hard-nosed decisions about what is the best way to meet our internal/external client’s need.

Step 8: Get Away From a Program Orientation

Diversity is not a program; it is a process of systemic organizational change. Programs have a beginning and an end. However, people will never be finished with their differences. Therefore Diversity interventions and the metrics that support them must reflect a range that supports the systems and processes that drive real organizational performance.  The context for diversity performance is the organization’s business and its objectives. To be relevant and aligned, it is critical to think in terms of the business, its goals, objectives and its performance needs. It requires Diversity practitioners connect to and work in concert with all levels of the organization.

It is reported that many top and senior executives truly support their Diversity organizations and process, but feel they should play a stronger strategic role in the growth and development of the organization. They expect Diversity practitioners to help increase productivity and provide solutions that generate a stronger competitive edge. In effect, both top and line managers are seeking Diversity professionals who can function as “strategic business partners” to solve real business problems which have a bottom-line impact on the organization’s day-to-day and strategic priorities. To successfully align and link Diversity strategies with the organization’s strategic business plan, you must actively pursue top and line managers regarding their specific business problems and speak their language. For example, if we are working with the Finance department, we must be able to talk about their problems and potential solutions using Diversity in financial terms, impacts and consequences. If the problem is focused in the operations area, we must talk in operational terms, etc.

Step 9: Stick With It!

Developing a Diversity ROI measurement capability is a “skill”. And like any skill we must learn what it is, understand its applications, use it, study the feedback from its use and refine the skill until we build a level of competency. This is an expectation for anyone that offers themselves up as an “expert” in a particular discipline or field of study. We expect doctors, engineers, social scientists, technicians, etc., to have mastered their craft in order to trust the solutions and alternatives they suggest. The same is true for Diversity professionals. We must hold ourselves to a high standard whether or not our C-Suite executives and others ask for it.

A critical element of meeting that standard is a strategic alignment with the strategy, structures and systems that drive the organization’s performance. It is imperative to take advantage of learning and listening opportunities that broaden our understanding, build Diversity ROI capability as well as business acumen.

It’s not easy. It will take a lot of work and a heavy persistence for excellence at your craft. It requires that we possess an internal standard that says we do not accept being mediocre at our craft. Developing this expertise won’t happen overnight or without setbacks and frustrations, but it can be done and is worth the struggle. This means that as Diversity professionals, we must develop a “strategic alignment mindset” that places our Diversity ROI measurement efforts on par with any discipline that drives business results and success!

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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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