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Category Archives: diversity analytics

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

A 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:

Assorted Medicine Pills in Caps

Small Doses to Bust Up Measurement Myths and Misconceptions

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. (Note: DROI® is a registered trademark of Hubbard & Hubbard, Inc., All Rights Reserved.)

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 Diversity ROI Certification, training and measurement workshops, etc.

Tools and Templates 4

Remember: “If there is no verified need you cannot calculate Diversity ROI Impact”

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 target population
  • Describe the exact nature of a performance discrepancy (Ideal versus Actual Performance)
  • Determine the cause(s) of the discrepancy
  • Recommend the appropriate solution(s)

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.

Linkage Graphic using Puzzle Piece

Develop Strategic Capabilities and Follow-thru

Small Dose-4: Build DROI® Discipline and Planning Focus
There is really no substitute for implementing a thorough approach to a DROI® evaluation process. The practice of Diversity ROI evaluation should be an “industry standard of professionalism and competence” in the Diversity and Inclusion field and discipline. To do otherwise sets us apart from other professional discipline such as Marketing, Sales, Operations, etc. that require standard metrics and analyses to determine their effectiveness and impact. Diversity ROI impact analysis 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.

Performance Measurement

Use Evidence-based Data for Credibility

Small Dose-5: Eliminate Any False Assumptions
Credible processes rooted in strategic performance-based sciences to calculate Diversity ROI have been in existence for over 30 years. Yet, Diversity practitioners have been slow to enroll and learn what it takes to be fully competent and capable in this scientific discipline. 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 that prevent them from being effective. 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.

Dr H Book Tower Graphic for Proposals

Sample Diversity ROI Resources by Dr. Hubbard

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? The next move is yours!

Dr. Edward E. Hubbard is President & CEO of Hubbard & Hubbard, Inc. and is recognized as the pioneer and founder of the Diversity Measurement and Diversity Analytics fields. He is the author of over 40 plus books including the ground-breaking “Measuring Diversity Results”, “How to Calculate Diversity Return on Investment”, “The Diversity Scorecard: Evaluating Diversity’s Impact on Organizational Performance”, “Diversity Training ROI”, “The Executive’s Pocket Coach to Diversity and Inclusion Management”, “Measuring the ROI Impact of ERGs and BRGs”, “The Diversity Discipline”, “The Hidden Side of Employee Resistance to Change”, and many more. Dr. Hubbard is available Keynote presentations, Strategic Diversity and ROI Consulting, Training, etc. He can be reached at edhub@aol.com.

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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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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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