Tag Archives: creating value from diversity

Dec 1 2017

“Searching For Measurement Processes And Best Practices: Key Steps to Building an Effective Diversity Measurement System” Part 1.

 

Measurement Graphic

Building an Effective Diversity ROI Measurement System

Copyright 2017 by Dr. Edward E. Hubbard. All Rights Reserved. President & CEO, Hubbard & Hubbard, Inc.

Although interest in measuring the effects of diversity has been growing, the topic still challenges even the most sophisticated and progressive diversity departments. 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. But where do they start? Well, I will weigh in on this topic with a few thoughts in a “two-part” analysis of this dilemma. In this segment (Part One), I will give an overview of a 5 step process to consider and highlight some key background issues. Part Two will detail each step of the 5-step process including possible diversity metrics, formulas, and suggestions.  Although measuring Diversity Return on Investment (DROI®) impact is not an exact science, there are a number of valid techniques, tools and reliable methods for translating business performance gains into tangible financial results that C-Suite executives will support and embrace. Let’s get started by addressing the fundamental question…

Can diversity be measured?

Before we look at what to measure, I’d like to address the concern some practitioners have about the validity of measuring diversity results. Some practitioners seem to believe that quantifiable and quality-based measures cannot be applied to the diversity implementation process or a diverse work culture. Others believe that diversity is not a business-focused activity, simply another form of affirmative action regulatory compliance. However workforce and market place demographics make diversity a business and customer issue, as well as a global competitive issue!

Regardless of the events that led to this conclusion or whether this subjective position is valid or not, the fact that the position exists and that some diversity professionals and other business people support it creates major problems. In particular, it sets managing and leveraging diversity apart from the rest of the organization. While peers in other organizational areas are focusing on metrics that reflect their contribution such as sales, reduced costs, profits, income and expenses, those implementing the diversity process often limit their discussion of diversity’s contribution to increased awareness, improved feelings, and increased satisfaction among work groups. Only a select few really show demonstrated, evidenced-based results of Diversity’s impact on organizational performance.

As a result, diversity is not taken seriously. Fewer managers support it in actual practice, such as, sending their workforce to be trained, using Diversity in potential alternatives to solve business unit and customer problems, etc. Even fewer managers structure their workforce to leverage its richness through teaming, implementing strategic partnerships to penetrate key ethnic customer markets, and so on. We know from current organizational practice that diversity initiatives often experience less management support than other business initiatives.

Hubbard & Hubbard, Inc.’s Seven-Level Diversity ROI Analysis Framework teaches Diversity & Inclusion Professionals how to analyze and build credible Diversity ROI performance solutions grounded in scientific processes and analytics which show a measurable, evidence-based  difference on the organization’s bottom-line. These value-added outcomes are reported showing ratios such as “Benefit-to-Cost”, “Payback Period”, “Diversity Return on Investment”, “Return on Expectations”, and more. Our copyrighted Diversity and Inclusion ROI Sciences® also include at least 10 different methods and “isolation processes” which highlight Diversity and Inclusion’s contribution verses all other contributors to the outcome.

Why is having an isolation technique important? This is necessary because you will often get asked: “How can you prove that it was Diversity and Inclusion that generated the value-added outcome”? A question this question prompts for me, for example, is “How can you prove that it was Sales that generated the revenue increase”? On the Sales side the reality could have simply been a case where three competitors dropped out of the organization’s market and the business gained new customers. The displaced customers were all looking for a new source to supply their needs and the Sales department increased Sales with no real “Sales” effort.

Using Diversity and Inclusion ROI Sciences® allows the C-Suite, the Board, and other stakeholder to appreciate Diversity & Inclusion’s value beyond Representation. The business case for Diversity and Inclusion can be difficult to make when the Diversity & Inclusion organization can’t credibly show there is something on the other side of the “equal” sign demonstrating that it produces real tangible value that is measurable based upon the investment made in D&I.

How Would this Situation Play Out in your Organization??

Suppose the C-Suite announced that Sales are down in key growth markets, operational processes to meet customer expectations have broken down, and three major competitors have gained 40% of the organization’s market share. Question: Would you be prepared to show how utilizing Diversity and Inclusion can help solve these problems or would you say that’s a Sales, Marketing, and/or Operations problem. Would Sales, Marketing, and/or Operations even want your involvement? Would they view your potential Diversity and Inclusion perspective or contribution as “relevant” to solving these problems?

The Diversity ROI and HH Diversity and Inclusion ROI Sciences® methodology can assist Diversity & Inclusion Practitioners with the means to demonstrate their value and address these “real” business issues. The solutions can be addressed with Diversity and Inclusion processes that go well beyond “Representation”. They must show how to drive tangible financial business performance using Diversity and Inclusion strategic methods.  It’s probably a good bet that when Sales, Marketing, and Operations begin to approach the problem, they will have analytics, metrics, and other sciences of their disciplines to offer solutions that can be measured using solid Sales, Marketing, and Operations sciences. Over the last 30 years, Hubbard & Hubbard, Inc. has developed and applied a set of Diversity and Inclusion ROI Sciences® globally in a wide variety of industries with success. We know and have definitive ROI-based evidence that Diversity and Inclusion Practitioners can deliver on this value proposition with the right skill and competency set.

I’m not suggesting that measurement and sciences are the sole solution to Diversity’s acceptance into the corporate landscape. But measurement of results is a useful tool that allows the Diversity Practitioner to talk the language of other managers and top management. Remember Diversity and Inclusion efforts are not conducted in a vacuum. They are part of an organizational system of processes, activities, and events aimed at delivering “value”, “impact” or both.

Building a measurement system 

The creation of an effective Diversity measurement system and “best” practices cannot be a mechanical modeling exercise. It must be preceded by an inspection and utilization of basic business principles. It must focus on organizational and departmental strategic thinking as well as an assessment of business needs, goals, objectives and the desired quality of work-life. Developing the actual measures is easy compared to the amount of time that should be spent thinking about what is important to the organization’s strategic business objectives and the expectations of the Diversity measurement process.

Key steps to building an effective measurement system

Creating an effective Diversity measurement system and process that embodies these concepts involves at least five critical steps:

  • Review the Strategic Business Plan for Needs
  • Formulate Research Questions
  • Design the Study Methodology, Metrics, and Analytics
  • Collect and Analyze Data
  • Implement Solutions and Communicate Results

Each step in the process logically builds on the previous step which generates an evidenced-based framework that creates a “Best Practice” method for proving Diversity’s link to performance. In the next segment (Part Two), we will explore each step in detail and provide suggestions for their effective use.

Dr. Edward E. Hubbard Short Bio

Dr. Edward E. Hubbard is President and CEO of Hubbard & Hubbard, Inc., (http://hubbardnhubbardinc.com), Petaluma, CA, an international organization and human performance-consulting corporation that specializes in techniques for applied business performance improvement, workforce diversity measurement, instructional design and organizational development.

The Ohio State University awarded Dr. Ed Hubbard the Alumni Distinguished Achievement Award for 2017. In April, 2012 Dr. Hubbard was an honoree at the Inaugural International Society of Diversity and Inclusion Professionals Legends of Diversity Ceremony in Rio Grande, Puerto Rico where he received the Legends of Diversity Award for establishing the “Diversity ROI Analytics” and “Diversity Measurement Fields/Disciplines”. The American Society for Training and Development (ASTD) inducted Dr. Ed Hubbard into the prestigious “ASTD New Guard for 2003”. The July/August 2007 Issue of Profiles in Diversity Journal featured Dr. Hubbard as the “Diversity Pioneer” in Diversity Measurement.

Dr. Hubbard serves on the Harvard Business Review, Diversity Executive Magazine and Strategic Diversity & Inclusion Management (SDIM) magazine Editorial Advisory Boards.

Dr. Hubbard is an expert in Organizational Behavior, Organizational Analysis, Applied Performance Improvement and Measurement Strategies, Strategic Planning, Diversity Measurement, and Organizational Change Methodologies.  Dr. Hubbard earned Bachelors and Masters Degrees from Ohio State University and earned a Ph.D. with Honors in Business Administration.

 

Jun 18 2016

Engaging in Fact-Based Diversity ROI

The roadblocks to measuring diversity and inclusion no longer exist. It is possible to evaluate so-called soft projects with a well-defined diversity ROI process and methodology.

de_1209_diversitybythenumbers_blog_v1_680x300jpgThere has been a shift from faith-based to fact-based investing. Soft functions such as a leadership development, employee engagement or diverse work team programs are often assumed to be making a difference. This suggests it would be difficult to measure and place a monetary value on the project, and more difficult to connect the particular initiative to a business impact measure.

Things have changed. These roadblocks no longer exist, and it is possible to evaluate so-called soft projects credibly with a well-defined diversity return on investment process and methodology. Executives want to see their organization engage in fact-based investing and show the monetary value of that investment with credible data.

For example, a study conducted by Chief Learning Officer magazine’s Business Intelligence Board involving 335 chief learning officers. It reveals interesting results describing the current and future use of ROI. According to the “2015 Measurement and Metrics” study, 36 percent of the CLOs use business impact data to show the impact of the training organization on the broader enterprise; 22 percent of the CLOs use ROI data for the same purpose.

Some 23 percent plan to implement ROI in the next 12 months, and 10 percent plan to implement it in the next 12- to 24-month time frame. Also, 17 percent plan to implement it with no particular time frame. This means almost 50 percent of the CLOs plan to implement ROI in the future. When that number is added to the current use, this suggests that 71 percent of CLOs are either using or plan to use ROI in the future. Diversity and inclusion leaders would be wise to make similar plans.

The study also revealed a desire to see the value of projects and programs before they’re implemented. Before the recession, this was not so much of a concern. However, since the recession, this is a typical request, particularly if the investment is large. If you are building a $4 million wellness and fitness center, you need to show the ROI in advance. If you plan to implement a $5 million diversity leadership development program, you might have to show the diversity ROI in advance. Forecasting in advance is important, allowing everyone to consider how the project works and how it delivers results.

Companies often struggle to evaluate whether their diversity and inclusion initiatives meet business needs and if they are worthwhile investments. Knowing how to construct and use diversity ROI-based metrics and predictive analytics is a mandatory skill and competency that all diversity and inclusion professionals must possess to be seen as credible. When diversity professionals are competent and capable of properly using such approaches — showing the costs versus benefits of major diversity and inclusion programs, this demonstrates the ultimate level of accountability. It demonstrates a value that executives understand, appreciate and desire.

The beauty of predictive analytics for diversity and inclusion is that it uses leading measures — intention and adoption — as a signal of results or impact. If leading indicators are below predicted success thresholds, adjustments can be made to realize desired results. This reduces risks associated with the investment and takes diversity measurement applications well beyond “faith-based” assumptions to “fact-based and evidence-based” diversity and inclusion outcomes.

Anyone responsible for diversity and inclusion initiatives is also responsible for evaluation. The amount of evaluation you provide depends on the types of decisions your organization must make and the information needed to make those decisions. For instance, there are seven levels you can use in the Hubbard Diversity Return on Investment Evaluation Methodology to demonstrate initiatives’ performance impact:

  • Level 0: Business and performance 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, benefit to cost ratio
  • Level 6: Intangibles

They provide a comprehensive “chain of impact” to demonstrate the specific diversity and inclusion affect link.

So, how do your diversity and inclusion efforts measure up? What are you doing to show that the diversity and inclusion initiatives you deliver add “evidence-based” and “fact-based” value to the organization and its bottom line in real measurable terms?

Sharing your ideas can provide a “teachable moment” for others. What challenges do you face? Let me hear from you, and I will provide a few recommendations. I look forward to hearing from you.

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. Dr. Hubbard is an expert in Organizational Behavior, Organizational Analysis, Applied Performance Improvement and Measurement Strategies, Strategic Planning, Diversity Measurement, and Organizational Change Methodologies. He holds a Practitioner Certification and Master Practitioner Certification in Neurolinguistic Programming (NLP), a Neuro-science discipline. Dr. Hubbard earned Bachelors and Masters Degrees from Ohio State University and earned a Ph.D. with Honors in Business Administration.

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

Dr. Hubbard can be reached at edhub@aol.com.

Nov 2 2015

What Are Your Inclusion Metrics?

Inclusion Graphic

Creating value by applying effective inclusion metrics is a framework for success that empowers leaders to better understand and manage their firm’s most valuable asset — their people.

When an organization’s values are in alignment with their “people brand promise,” value is created via brand equity, which can be used to drive sustainable competitive advantage and superior financial performance.

Inclusion is the invisible thread that ties the elements of an organization’s culture together. Inclusiveness, or using the information, tools, skills, insights and other talents that each individual has to offer, often results in measurable, mutual benefit and gain for all. It also provides everyone with opportunities to contribute their thoughts, ideas and concerns. If present, inclusiveness results in people feeling valued and respected. When applied effectively, it can increase engagement, improve products and service delivery, and enhance financial performance.Therefore, it makes sense that programs promoting inclusion have a measurable effect on an organization’s bottom line and on workforce productivity.

How can a diversity executive report to the CEO or board of directors that the organization is now 5 percent more inclusive than the year before and quantify what effect that statement has on the bottom line? In the absence of direct measures, it’s often necessary to rely on indirect observations to determine goals achievement. Metrics such as engagement scores, retention rates, productivity measures and diversity representation at various tiers often must be combined to create a broader picture of an inclusion strategy’s impact on the overall organizational culture.

To effectively create an evidence-based measure of inclusion, use a multifaceted approach. There are several prerequisites to craft the process. To measure inclusion, diversity executives should:

1) Review the current definition and drivers behind an organization’s inclusion initiative. Make sure they describe the desired cultural effect as well as the employee behaviors required to achieve desired results. Establish a definition for inclusion that spells out some measurable elements and is understood across the entire organization to maintain focus and help develop metrics.

2) Align the organization’s inclusion definition and drivers with strategic goals. If the organization needs to improve its talent pipeline, weave inclusion initiatives into existing talent management functions. If increasing innovation is critical, promote inclusion programs that will facilitate knowledge sharing. Both of these goals may require raising awareness of the employment brand by competing to become an employer of choice.

3) Formally measure initiative impact to ensure programs are having an effect. Select or develop metrics that circle back to, or align with, the original drivers. By carefully articulating outcomes, organizations can define measures that assess the effect of their inclusion strategy. For a concept as ephemeral as inclusion, multiple qualitative, quantitative, effectiveness and efficiency metrics may be required to imply success or indicate the need for a course change.

To measure the return on investment for inclusion, the definition of inclusion at work must be crafted in behaviorally specific terms that are measurable. This aligns your work to show the “chain-of-impact” that links the change to your initiative’s outcomes.

A critical aspect of inclusion is to explore whether employees feel they are being included and respected in the organization, and if not, to what degree are they excluded. In addition, it would be vital to collect specific examples regarding what contributions are not being utilized and the consequences and cost for this lack of inclusion. As a result, inclusion ROI values can be generated in dollars and cents to illustrate the cost and effect of poor inclusion practices.

Once effective solutions are in place to create a truly inclusive work environment, diversity executives could report to the CEO or board of directors that the organization has actually generated a 5 percent more inclusive environment than the year before and quantify what effect that statement has on the bottom line with greater confidence and credibility.

Dr. Edward E. Hubbard, Ph.D. is president and CEO of Hubbard & Hubbard Inc., an international organization and human performance consulting corporation that specializes in techniques for applied business performance improvement, workforce diversity measurement, instructional design and organizational development. Dr. Hubbard is the author of more than 40 business related books (22 books covering the topic of Diversity ROI) and is recognized as the creator and founder of the Diversity Measurement and Diversity Analytics fields. He is the recipient to the “Legends of Diversity Award” given to only 18 people in the world. He can be reached at edhub@aol.com.