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Barriers that Derail Diversity ROI Measurement Processes and What to Do About Them

Several years ago, I read a study concerning the value of “Training Evaluation” that has particular relevance for the challenges of evaluating all types of Diversity ROI interventions, including Diversity Training interventions. It was published by the American Society for Training and Development (ASTD). The study focused on the notion of “making training evaluations more effective and queried organizations regarding how well training evaluation was meeting business needs. Responses to the 26 questions led to disturbing conclusions. “The pursuit of excellence in learning evaluations continues, but so far few organizations think they have mastered them”. The report stated, “Only about one-quarter of respondents…agreed that their organization got a solid bang for the buck from their training evaluation efforts.”

The Accountability Trend Over the years, I have heard similar comments made by Diversity practitioners, CDO’s and unfortunately, by many CEO, key leaders, stakeholders, and sponsors about Diversity ROI evaluation efforts. Yet, the only way to determine that a Diversity initiative or skill development effort and diversity training are having the desired effect is to use formal evaluation processes and cost-benefit analysis methods. The results of these activities can confirm the positive effects of the Diversity intervention and identify improvements to make it better. It is imperative to “master” the processes to measure the impact of Diversity initiatives in order to have any credibility with the organization. Finance, Marketing, Sales, or Operations and the like, cannot get a “pass” on showing their results and effectiveness and neither should Diversity if we want to be taken seriously. Mastering Diversity measurement and evaluation strategies can contribute to maximizing an organization’s overall return on investment (ROI or return on mission (ROMtm), thus showing its value to the bottom-line.
For years, Diversity managers convinced top executives that the impact of diversity couldn’t be measured, at least at the monetary contribution level. However, today, many executives are now aware it can and is being measured in many organizations. Top executives are subsequently demanding the same accountability from their Diversity training functions. With the acceptance of ROI as a mainstream measurement tool for Diversity functions, the debate has shifted from whether ROI should be conducted to how it should be conducted on a consistent, standardized basis.

Barriers to Diversity ROI Implementation ROI is a familiar term and concept for managers, particularly those with business administration and management degrees. Today’s Chief Diversity Officer (CDO) who is aligned as a strategic business partner is more aware of bottom-line issues in the organization. They are pleased to see the ROI Methodology applied to the evaluation of Diversity performance improvement interventions.
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 a few that are consistently challenging for Diversity practitioners:

  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 6 levels). 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 is focused on results, impact, and/or outcomes.
  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 management requests alone or efforts to chase a popular fad or trend in the industry. If the intervention is not needed, the benefits from the program will be minimal. A DROI® calculation for an unnecessary program will likely yield a negative value. This is a realistic barrier for many Diversity interventions.
  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, often based on unrealistic assumptions and a lack of knowledge of the process, becomes a real barrier to many DROI® measurement efforts.
  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.
  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.

What to Do About Them To overcome these barriers, it will be critical to:

  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!
  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
  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.
  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.
  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 demand for DROI® analysis feedback, demonstrated credibility and intervention performance value ties to the bottom line.

Benefits of a DROI® Evaluation

The DROI® Methodology is the most accurate, credible, and widely used process to show the impact and results of a Diversity intervention. The Diversity Change Management team will know the specific contribution from a select number of programs. Preparing a DROI® study will determine if the benefit of the program, expressed in monetary values, has outweighed the costs. It will determine if the program made a contribution to the organization.
Calculating DROI® in different areas can show which interventions contribute the most to the organization, allowing priorities to be established for high-impact performance. Successful programs can be expanded into other areas-if the same need is there-ahead of other programs. Inefficient programs can be redesigned and redeployed. Ineffective programs can be discontinued. Using this process 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 survive for the long term. We can ill-afford to let the aforementioned barriers trap and derail us.

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

 

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Using Diversity ROI Measurement Skills to Get a Seat at the Table

Introduction

As the Diversity and Inclusion industry climbs the ladder of recognition, relevance, and importance, more and more Diversity and Inclusion professionals want to learn how they can gain C-Suite access and earn a seat at the proverbial table of power. After all, it’s no secret that if you sit with the executive team, you become instrumental in strategic decision making-one of the best ways to influence change. In order to get the coveted seat, you must speak the language of business and focus on the critical business objectives and metrics, such as increasing revenue, decreasing costs, and reducing cycle time. There’s no doubt that we must communicate effectively and demonstrate our value to the bottom line. Diversity ROI metrics and performance improvement processes help us focus first on tangible outcomes, then on interventions. When people focus primarily on the intervention, such as the diversity content, the method, or the technology, it’s easy to be led astray by current fads, thus wasting valuable time and money. Instead, focus first on the desired outcomes and DROI® analytics to determine what kind of measurable diversity intervention, if any, is necessary.

Conducting glitzy Diversity training or other Diversity activities and implementing fad-based interventions can distract decision makers from what truly counts. The glitz may make things fun, louder and interactive, not necessarily better. Without a clear, data-based front-end analysis of organizational performance gaps, any intervention, including diversity training and the like, is a guess. Add in sophisticated Diversity intervention technologies without an adequate front-end analysis, including metrics, and it becomes an expensive and often complex guess. Systematic Diversity training design procedures, for example, includes DROI® analytics and metrics, needs assessments, objectives, targeted competency-based design, and multi-level evaluation processes. That framework provides a method to get the coveted seat at the table. Why? Because when used properly, that knowledge base can help companies increase revenue and decrease costs using Diversity and Inclusion practices that impact organizational performance outcomes. In other words, you can earn your seat at the executive table by applying what you already know as a Diversity ROI-focused professional. It’s successful because the DROI® metrics and processes you use are solidly based on the behavioral science research results about how diverse people interact and what drives their behavior to produce successful organizational outcomes.

Using Diversity ROI Measurement Sciences and Analytics

Measuring the ROI of Diversity initiatives requires Diversity professionals and practitioners understand and utilize the full range of measurement sciences and approaches Diversity and Inclusion has to offer. If our work is to be seen as credible and providing value to the organization, we must hold ourselves to a high standard whether or not the C-suite and others are asking for it. It is disheartening to know that although Donald Kirkpatrick’s “Four Levels” of training measurement has been around since the 1950’s, and a primary intervention in the Diversity and Inclusion field is diversity training, only a select few Diversity Professionals and Practitioners consistently use a comprehensive, Instructional Systems Design (ISD) research-based approach to diversity training evaluation. My books, “Measuring Diversity Results (1997)”, “How to Calculate Diversity Return on Investment (1999)”, “The Diversity Scorecard (2004)”, “Implementing Diversity Measurement and Management (2004)”, “The Diversity Discipline (2008)”, and “Diversity Training ROI (2010)” and others outline numerous approaches to measure the ROI impact of Diversity interventions. They are designed to give Diversity Practitioners business acumen and “how-to” measurement tools, templates, strategies and techniques to demonstrate C-Suite level analysis capability.

It is regrettable, yet understandable, that Diversity interventions and initiatives are attacked as “having little or no value for the money invested.” Many of the diversity measurement processes used by some practitioners can barely pass a true Level 1: Reaction, Satisfaction, and Planned Actions evaluation instrument test. A majority of the instrumentation found qualifies only as a basic “smile” sheet at best. This doesn’t mean that credible, research-based Diversity training and initiative evaluation does not take place in our industry, only that many Practitioners have not consistently utilized solid, DROI®-based measurement sciences to document their impact on the organization as evidenced from the feedback in a wide-array of surveys conducted over the years.

The People-Profit Link

The link between people and profits is clear. Utilizing human capital assets is the primary vehicle to drive organizational performance and results. Thus, in a global economy and diverse world, developing a diversity competent employee base using a learning culture is vital for long-term, national and global success. Performance and profits are closely linked and require a comprehensive diversity analytics and measurement strategy to utilize human capital assets effectively. Skill development is one of several activities that must be undertaken to achieve an organization’s strategic business objectives. The only way to determine that skill development and diversity training are having the desired effect is to use formal training evaluation and measurement processes as well as ROI-based cost-benefit analysis methods. The results of these activities can confirm the positive effects of diversity training and development and identify improvements to make it better. Diversity training measurement and evaluation strategies can contribute to maximizing an organization’s overall return on investment (ROI or return on mission (ROM™), a crucial skill for anyone sitting in the C-Suite.

How You can Earn Credibility with the C-Suite

So, to gain a seat at the table, you need to do more than speak the language of business. You should play to your unique strength-an in-depth understanding of Diversity ROI and how it can successfully drive organizational performance. With continued efforts to learn, refine, and apply what’s already known about enhancing Diversity and Inclusion practices with ROI metrics, you can bring a unique and powerful perspective to the top management team that can make a measurable difference in the organization’s performance!

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

 

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Diversity Training ROI

Introduction

There seems to be a myth operating within some communities of practice, which suggest that the results created by diversity initiatives defy measurement. It is often presented with a belief that creating a measurable diversity process that drives business is something of a complex and mysterious art form. Organizations are looking for strategies to deal with increased competition, options for reducing cost, and increasing productivity to affect the bottom-line. Many diversity training evaluations use poorly designed “smile sheets” and focus primarily on attendance records that have very little to do with the business needs and specific performance requirements. I believe this must change.

Accountability is a key issue for diversity training just like any other business unit. Diversity training is only one of several initiatives that are undertaken to achieve an organization’s diversity objectives. Left without the effective practice of utilizing consistent, time-tested methods of Diversity training ROI evaluation practices, diversity organizations can become an easy elimination target for those who do not believe in its value. Consequently, the idea of being able to calculate the diversity return on investment (DROI®) of diversity training is mandatory if diversity is to take its place at the strategic partnership table.

Setting A Standard of Excellence for the Diversity Field

The lack of measurement practices for diversity sets diversity apart from the rest of the organization. Therefore if we, as diversity professionals, want to be effective communicators of value added to the bottom-line, we must build rapport with our audience using DROI® methods. The business case and rationale for diversity must be linked to strategic business objectives and initiative results must be displayed and communicated in organizational impact-related terms.

I am convinced that the only way to determine that diversity training and skills development are having the desired effect is to use formal training evaluation processes and cost-benefit analysis methods. The results of these activities can confirm the positive effects of training and development and identify improvements to make it better.

Benefits of Diversity ROI Evaluation

Evaluation can contribute to maximizing the organization’s return on training investment. Evaluation helps us to use measurement to make decisions (example: to stop, modify, or expand a process’ benefits). This implies:

  • Knowing what decision the evaluation data will help you make.
  • Measuring scientifically, using data collection methods and research designs that separate the effects your program is having from all other influences on your outcome variables.
  • Choosing the right measures for what your program is really trying to accomplish.

A Seven Level Causal Chain-of-Impact

I have found it useful to first to distinguish the “evidence-based, outcome-focused” measures from other types of “activity only” measures. Diversity ROI must be based on evidence and impact results. Anyone responsible for diversity training is also responsible for evaluation. The amount of evaluation that you provide depends on the types of decisions that your organization must make and the information needed to make those decisions. There are 7 levels you can use in the Hubbard Diversity Return-on-Investment DROI® evaluation methodology to demonstrate impact:

  • Level 0: Diversity 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 (DROI®), Benefit-to-Cost Ratio (BCR)
  • Level 6: Intangibles

For example, if your only requirement is to ensure that participants have positive attitudes toward the course, then Level 1 evaluation is sufficient. But, if your goal is to determine whether your diversity course is having a positive effect on job performance, then you will have to perform a Level 3 evaluation. This also means you will also have to conduct a Level 1 and 2 evaluation. They provide the basis for determining whether participants want to use what they have learned and have indeed learned the appropriate attitudes and skills.

How to Get Started?

Where Do You Begin? Your first step in evaluating diversity training is to determine your major evaluation questions or objectives based upon a needs assessment or cultural audit conducted at the outset. The second step is to plan and conduct the appropriate level of diversity training evaluation. The following decisions are examples:

  • How satisfied are the participants with the course? What are their Planned Actions (intention to use)?
  • Do the participants believe they learned the values and skills that the course was intended to teach?
  • Can the participants demonstrate the values, knowledge, and skills that are taught in the course?
  • Do the participants report that they are using their diversity values, knowledge, and skills on the job?

What Standard Will You Set?

If full utilization of a diverse workforce and diversity is to be a reality in our lifetime, we must use every tool or resource available to fully monitor and communicate the effectiveness of this effort. When we start to show management exactly how much value diversity training programs can contribute to the process of building an inclusive work environment, then diversity-training initiatives will become a strategic requirement. A true commitment to diversity takes effort, time and money, none of which can afford to be wasted in a competitive marketplace. Our internal standards as professionals must compel us to measure our results without having to be asked.

So, how does your diversity training efforts measure up? What are you doing to show that the diversity training you conduct adds “evidence-based” value to the organization and it’s bottom-line in real measurable terms? I know that some practitioners are showing their impact. Let us hear about your success.

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

 

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Are Your ERGs/BRGs Struggling to Demonstrate their ROI Value?

Introduction

Companies discovered that one way internal resources can contribute to a company’s business objectives is to use them as an Employee Resource Group (ERG) or convert them to Business Resource Groups.

These groups have a primary focus to assist the organization in meeting its strategic business goals and objectives. There is growing pressure on both Employee Resource Groups and Business Resource Groups to show measurable results for their initiatives, programs, and company-sponsored events. As companies continue to look for ways to cut costs and improve financial returns there is increasing interest in establishing Business Resource Groups and transforming ERGs to BRGs that have the skills to measure the ROI of their initiatives. There is a book and other resources I have used that provide a comprehensive, yet practical approach for aligning, collecting, analyzing and reporting the ROI impact of all ERG and BRG initiatives.

Calculating Costs and Benefits

Taking the time to calculate the costs and benefits of an ERG/BRG initiative is an essential step in developing the Diversity Return on Investment calculation since it represents the denominator in the DROI formula. It is equally critical to pay attention to both the costs and benefits of any ERG/BRG initiative that you put in place. In practice, however, the costs are often more easily captured than benefits.

Today there is more pressure than ever before to report all initiative costs or what is commonly referred to as fully loaded costs. This takes the cost profile beyond the direct cost of ERG/BRG initiatives and includes the time all participants are involved in developing and participating in the initiative, including all costs, benefits, and other overhead. Taking the conservative approach to calculate diversity return on investment, you should plan to report fully loaded costs. With this approach, all costs that can be identified and linked to a particular ERG/BRG initiative are included. The philosophy is simple: When in doubt in the denominator, put it in (i.e., if it is questionable whether a cost should be included, the rule suggests that it should be included, even if the organizational costs guidelines don’t require it). When Diversity ROI (DROI®) is reported to your target audiences, it should withstand even the closest scrutiny in terms of its accuracy and credibility. The only way to meet this test is to ensure that all costs are included. Here is a link to the book I mentioned and other ERG and BRG ROI resources:

Link: http://www.diversitysuperstore.com/mm5/merchant.mvc?Store_Code=DS&Screen=PROD&Category_Code=ergbrg&Product_Code=MROI-ERG-BRG_Bk

A Seven-Stage Model of ROI Analysis

It provides a 7-stage model to generate ERG and BRG value to the bottom-line. This Diversity ROI approach can help ERGs and BRGs save time, resources and efforts when developing methods to measure and demonstrate the financial ROI impact their initiatives are having on the organizations bottom-line. It is a “must read” for any group that wants to highlight their success in performance improvement terms and impact!

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

 

 

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