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 21^st 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:

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.

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.

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.

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.

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.

 

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