How well does your existing Diversity measure(s) capture “strategic organizational drivers” that make a measurable difference in bottom-line organizational performance? For most organizations there will not be a very close match between the two lists. Even more important, in those firms where Diversity professionals think there is a close match, frequently, the senior executives do not agree that this second list actually describes how Diversity creates value. In either case, there is a serious disconnect between what is measured, what is important to organizational performance.
These questions are fundamental because new economic realities are putting pressure on Diversity to widen its focus from the traditional role of guardian of ethnic representation, social justice, and well-being to a broader, more strategic role as an important strategic business partner. As a primary source of production and performance impact, our economy has shifted from physical to intellectual capital (which comes in all diversity mixtures such as colors, backgrounds, genders, orientations, thinking styles, etc.). A good idea does not have a specific color, race, creed, gender, sexual orientation or physical ability. It’s just a great ideas and it can come from anyone! As a result, senior Diversity executives and managers are increasingly coming under fire to demonstrate exactly how they are helping the organization “organize, utilize, and support” this critically significant organizational asset to create improved performance and value.
Performance measurement in organizations is not something new, however, in the last 30 years or so, organizations have realized that financial measures alone are not sufficient for evaluating the success of an enterprise.
In the mid-1990s, the balanced scorecard concept was introduced; forcing executives to take a hard look at how many of their metrics were financial and then balance out their scorecards with non-financial metrics. The balanced scorecard approach also recommended that fewer metrics are better. The number of metrics that companies tracked had been increasing each year for many years, but Kaplan and Norton suggested that no one should have more than 15 to 20 metrics per scorecard. This is still a tough sell for analytical executives who love pouring over hundreds of charts each month.
The primary issue that Diversity must deal with is very hard for some to imagine and believe, that is, showing Diversity’s measurable impact on organizational strategy and the financial bottom-line. The ability to utilize a diverse mix of human and other resources to create unique blend of strategy focused solutions, by its very nature, creates an innovative competitive process that is difficult to copy – thus making it a competitive advantage (largely invisible to competitors).
Evolving the Diversity Scorecard’s Business Impact
Current Diversity Scorecards must evolve to move beyond simply counting heads. They must elevate their utility to a level that utilizes “Logic Model-based predictive analytics and processes which more accurately generate “Strategic Outcomes” and “Intended Transformational Impacts.
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 identify investment value and a means to improve future outcomes from Diversity interventions and initiatives.
Although most organizations have come a long way in introducing better metrics for Diversity on their corporate scorecards, there is still a great deal of work to be done. Even the best scorecards need improvement in some key areas to evolve to the next level of performance impact. Metrics on several Diversity Scorecards focus on counting activities, not producing outcomes and organizational transformations. There is a distinct difference between generating “outputs” from scorecard action plans and producing “Strategic Outcomes” and “Intended Transformational Impacts”. I define “Strategic Outcomes” and “Intended Transformational Impacts as “the planned, intended measurable result or effect of an action, situation, or event; something that follows due to a planned execution of actions which result in intended consequence (or unintended consequences) that add value and drives change.
My new book: “Evolving Your Diversity Scorecard. Maximizing Diversity Business Intelligence with Transformational Analytics” will help develop a Strategic Outcomes Scorecard using Diversity Transformational Analytics® to drive organizational change and “next level” impacts (based upon a “Logic Model” framework).
Logic models are extremely effective tools for planning, describing, managing, communicating, and evaluating a program or intervention. They graphically represent the relationships between a program’s activities and its intended effects, state the assumptions that underlie expectations that a program will work, and frame the context in which the program operates. Logic models are not static documents. In fact they should be revised periodically to reflect new evidence, lessons learned, and changes in context, resources, activities, or expectations. Our system and approach to Logic models increase the likelihood that a Diversity and Inclusion intervention effort will be successful because they:
• Communicate the purpose of the program and expected results.
• Describe the actions expected to lead to the desired results.
• Become a reference point for everyone involved in the program.
• Improve program staff expertise in planning, implementation, and evaluation.
• Involve stakeholders, enhancing the likelihood of resource commitment.
• Incorporate findings from other research and ROI-based initiatives.
• Identify potential obstacles to program operation so that staff can address them early on.
Evolving the Diversity Scorecard requires that we ask key strategic measurement questions and perform specific actions along the Logic Model path to create transformational outcomes, impact and change. This is not a generic, random process. It involves possessing specific Transformational Analytics knowledge, skills and competencies to correctly drive each outcome phase (Initial, Intermediate, and Long-term) to achieve the desired change effect and impact. To gain the tremendous benefits that Diversity and Inclusion offers, our Scorecards and other measurement tools must take full advantage of “next level” practices such as the Hubbard Diversity Measurement Sciences and Analytics® to ensure better predictive accuracy to deliver strategic Diversity outcomes and transformational impacts. These methods provide the knowledge, skills, competencies, and tools to achieve excellence in implementing these paradigm shifting processes. As Diversity professionals, our utility, organizational value, brand reputation, credibility, and success will depend on our capability to demonstrate critical evidence-based impacts of Diversity initiative success. To this end, our Diversity scorecards must keep pace to display, track, and manage these results. Let me know what you think. Dr. Ed.
This article is based upon excerpts from the upcoming book: “Evolving Your Diversity Scorecard”: Maximizing the Use of Transformational Analytics to Drive Organizational Performance by Dr. Edward E. Hubbard, Ph.D. It is scheduled for release Spring 2019. Dr. Ed Hubbard can be reached at firstname.lastname@example.org.