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.

Diversity ROI Measurement Skills in Small Doses: Moving beyond Excuses

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

A recent 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:

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.

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 the Hubbard Diversity ROI technologies, training measurement workshops, etc.

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

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.

Small Dose-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.

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.

Small Dose-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 demands for DROI® analysis feedback, demonstrated credibility and intervention performance value that tie to the organization’s bottom line.

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?

Why Diversity Professionals Need Predictive and Other Analytics

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.

Over the past several years, diversity journals abound with volumes of information about the effect of a diverse workforce. The journal information is primarily from a talent representation point of view, focusing on organizational makeup of 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 eight years, I have been researching and developing a predictive analytics for diversity approach and framework that addresses all of the above questions and more. My goal 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.

What Are Analytics?
Analytics come in different types with a specific focus. They can be defined as follows:

  • Analytics: 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 the best course of action.

Descriptive diversity analyticscan help us understand human capital challenges and opportunities in utilizing a diverse workforce. On the other hand, 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 if they are worthwhile investments. Reasons given for not measuring diversity’s effect on business outcomes include statements such as, “It is too difficult to isolate diversity’s impact on results vs. the impact of other factors,” or “Evaluation is not standardized enough to compare well across functions.”

Sound business practices dictate that diversity 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 an approach that provides data to executives, including:

  • Predicting the success of diversity 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.
  • 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 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 help diversity and inclusion organizations move from an event-driven function to one that predicts success, measure performance against those predictions, and seen as returning significant shareholder value for the funds invested.

All told, the predictive 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.

Diversity Process Consulting or Intervention Consulting: How Do We Demonstrate Our Unique Value?

Building an Effective Diversity 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 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
  • 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.

 

With proper training and skill/competency development, one of the more critical roles a Diversity Practitioner and Professional can perform is that of a Diversity Performance Consultant/Technologisttm. This role in the Hubbard & Hubbard, Inc. Diversity Discipline Framework requires the Practitioner to design, develop and deliver or evaluate diversity performance solutions; maintain and apply an in-depth working knowledge in any one or more of the diversity performance improvement areas of expertise; take a disciplined approach to assessing individual and organizational effectiveness in the midst of collective mixtures of differences and similarities, diagnose causes of diversity tensions from differences, similarities and complexities, and recommend a set of interventions; as well as design solutions to improve diverse workforce performance and/or solutions to improve the organization’s performance.

 

I have always viewed Diversity ROI & Inclusion methods as “performance improvement technologies”. I am also a strong supporter of participatory approaches to performance improvement, from involving stakeholders in the identification of needs and their causal factors to determining solution alternatives, selecting the solution, planning and managing the change, and monitoring and evaluating the change. This active stakeholder participation is critical to the sustainable success of any Diversity & Inclusion (D&I) intervention, not only because we gain real buy-in from stakeholders, but also because part of what we do as rigorous Practitioners ultimately, is to change the way people think about and approach D&I performance solutions in organizations.

 

Diversity Intervention Consulting is primarily focused on a specific transaction, the provision of an intervention (e.g., Cultural Competency Skills for Leaders training), whether it is a specific process or product. In this case, the performance consultant, as “expert,” carries the bulk of the responsibility for delivering the intervention, but does not typically stick around for the consequences of such interventions. Partially rooted in the sociological tradition in new systems theory which views organizations as self-organizing social systems, Performance/Process Consulting provides a different approach. With a Performance/Process Consulting approach, however, the Diversity Performance Consultant/Technologisttm and the client are equal partners who share the responsibility for the desired change. There is a reduced chance of falling into fads or trendy solutions that may be insufficient or not fully applicable to the organizational realities, because both the Diversity Performance Consultant/Technologisttm and the client are partners in the change and its consequences. Both have a stake in the success of the intervention, and both learn lessons along the way. Moreover, they involve others in the organization, so that these lessons learned benefit more than just a few.

 

I am convinced that the real value of our work is much more than a roster of interventions (no matter how evidenced-based); rather, it is the paradigm shift that we contribute to in the course of our involvement with our stakeholders. Our ultimate value is in the sustainable and positive change of the organization’s performance system that is now able to operate at its goal or outcome level. While neither resource was utilized exclusively, it is certainly worthwhile for us to reflect on our own approach and determine whether we consciously or subconsciously assessed the situation to determine what balance or blend would be of most value for the given situation.

 

It is always helpful to review our Performance Consulting approach because of the wide range of relevant topics and ROI-based metrics that fit under the performance improvement umbrella. I am fond of saying that “focusing on tactics without a strategic framework is like learning to run faster in the wrong direction”. You cannot make a strategic contribution without a tight alignment and linkage to the business objectives and success metrics of the organization. If you want to have your interventions resonate with the C-suite and line managers of the organization, they must be based in the real bottom-line needs that drive organizational performance. Whether the organizational initiative is diversity training to teach cultural competency skills, selling products to emerging market clientele, innovating new products and services for a global market, delivering healthcare services, serving governmental constituents, meeting a wide range of student needs, improving the customer service experience, etc., “strategically aligned” diversity performance strategies have the best chance at success and sustainability.

Let’s take a look at an example that helps to clarify this relationship. First, among the organization’s strategic objectives, you find a series of crucial performance areas. One of these areas focuses on an objective of improved customer service. Based upon the importance of this area to the business, the diversity organization has created a corresponding strategic objective to analyze and improve service across all demographic market segments. In the second step, you determine that for service to be improved in these targeted markets, the critical success factor areas must include “improved communication”, “culturally appropriate interactions”, quick access, increased satisfaction, and accurate information. Finally, these critical success factor areas lead you to select diversity performance measures and indicators that support each critical success factor area such as the “percentage of multilingual service transactions delivered”, “number of rings to answer” when a customer calls the organization, “percentage of favorable response on your diverse customer satisfaction survey”, etc. This type of alignment drives improved performance and gains top management support.

Both Diversity Process Consulting and Diversity Intervention Consulting can offer strategic value to the organization. The key is how well each Performance Consulting method meets critical needs of the business to drive its goals, outcomes and success. At what value level would stakeholders rate your internal Performance Consulting methods today? What do you need to do differently to enhance your role as a value-added business partner?

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 The Ohio State University and earned a Ph.D. with Honors in Business Administration. Dr. Hubbard is available for Keynote Presentations, Executive Briefings, Workshops, etc. He can be reached at http://www.hubbardnhubbardinc.com/contact-us.html

Three Critical Dimensions and Seven Levels that Turn Diversity & Inclusion Evaluation into Results

“Three Critical Dimensions and Seven Levels that Turn Diversity & Inclusion Evaluation into Results”

 

Evaluation is a task that every Diversity Practitioner will face at one time or another. No matter what your role such as Trainer, Consultant, Chief Diversity Officer (CDO), Council Member, ERG/BRG Leader, etc., conducting an evaluation to assess key aspects of your Diversity and Inclusion initiatives is inevitable.

Two Definitions of Evaluation

 

People do not always agree on one definition of evaluation. Following are statements that reflect two different definitions:

 

  • “Evaluation is the systematic process of collecting and analyzing data in order to determine whether and to what degree objectives have been or are being achieved.”
  • “Evaluation is the systematic process of collecting and analyzing data in order to make a decision.”

 

Notice that the first ten words in each of the definitions are the same. However, the reasons-the “Why!”-for collecting and analyzing the data reflect a notable difference in the philosophies behind each definition. The first reflects a philosophy that as an evaluator, you are interested in knowing only if something worked, if it was effective in doing what it was supposed to do. The second statement reflects the philosophy that evaluation makes claims on the value of something in relation to the overall operation of a Diversity program, project, or event. Many experts agree that an evaluation should not only assess program results but also identify ways to improve the program being evaluated. A Diversity program or initiative may be effective but of limited value to the client or sponsor. You can imagine, however, using an evaluation to make a decision (the second definition) even if a program has reached its objectives (the first definition). For example, for Non-Profits, Federal grants are based on the first statement, that is, whether the program has achieved its objectives, but the harder decision to downsize or change may be a consequence of the second definition of evaluation.

 

For some, endorsing Diversity Evaluation is a lot like endorsing regular visits to the dentist. People are quick to endorse both activities, but when it comes to doing either one, many Diversity Practitioners are very uncomfortable. In this blog, I want to reduce your discomfort by demystifying some important aspects of designing and conducting a Diversity ROI evaluation by helping you get to know a few Diversity metrics processes that matter in evaluation design.

In both for-profit and nonprofit organizations, organizations possess data (and information) that could help to evaluate a Diversity program or project. These data are the one thing that all evaluations have in common regardless of the particular definition of evaluation you embrace: “evaluation is the systematic process of collecting data that help identify the strengths and weaknesses of a program or project. The data may be as simple as records of attendance at training sessions” or, as complex as “showing test scores showing the impact of a new educational program on increasing students’ knowledge across an entire school system”.

 

Evaluating Efficiency, Effectiveness, and Impact

 

We can define Diversity evaluation even more closely as a process. The process is guided by the reason for doing the evaluation in the first place. An evaluation might be a process of examining a Diversity training program, in light of values or standards, for the purpose of making certain decisions about the efficiency, effectiveness, or impact of the program. To carry out this task, you need to understand the concepts of efficiency, effectiveness, and impact. Think of these three terms as the levels of a program evaluation.

 

“Efficiency” relates to an analysis of the costs (dollars, people, time, facilities, materials, and so forth) that are expended as part of a program in comparison to either their benefits or effectiveness. How is efficiency, or the competence with which a program is carried out, measured in a program? The term itself gives clues to what this is about. Diversity Practitioners would look at the efficiency with which details are carried out in a program. Diversity programs and initiatives often begin with recruiting, gathering materials, providing for space, setting up fiscal procedures, and so forth. In other words, the relationship between the costs and end products becomes the focus of an efficiency evaluation. Although very important, these aspects of efficiency have no bearing on the program’s effectiveness. If the investment in the program or project exceeds the returns, there may be little or no efficiency.

 

For example, let’s consider an assembly line facility that houses a rather substantial training and staff development department. As part of this department, ten instructors are responsible for ensuring that five hundred employees are cycled through some type of Diversity training every six months, for a minimum of twenty hours of training each cycle. The training revisits the employees’ basic knowledge of their job and introduces new concepts of Diversity that build additional competencies since the last training. The staff development department might work very efficiently by making sure that all employees cycle through in a timely fashion, in small enough groups to utilize the best of what we know about how adults learn. The students’ time on task is often not enough, however, and many of them do not retain much of what was covered in the training. Thus the program is not effective.

 

The department may be efficient in that it fully utilized the time of each of the available trainers, it stayed within the parameters of the staff development budget, it kept employee “down time” to a minimum, it used materials and equipment that were available, and it completed the Diversity and Inclusion training agenda for the company. Yet there may be an increase in cultural miscommunication incidents and generational conflict across levels because employees make simple, basic mistakes and assumptions about others who are different than themselves. The department’s training was efficient but not necessarily effective.

 

When you examine the “effectiveness” of your Diversity and Inclusion initiatives, you are asking this question: “Did the activities do what they were supposed to do?” Simply put, an initiative’s effectiveness is measured in terms of substantive changes in knowledge, attitudes, or skills on the part of a program’s or initiative’s participants. Although the right number of participants may have been recruited and the best possible site may have been secured, the effectiveness test is this: Did the activities provide the skills to effectively handle Diversity and Inclusion-related situations! Did the participants gain the knowledge they need to work across generational differences? In another example, the same Diversity and Inclusion department staff may conduct a training session on a new approach to deescalate cultural conflict situations. The trainer may pretest all the employees as they begin their training session. Upon completion, the employees are post-tested and the results compared to determine whether their knowledge increased, decreased, or stayed the same. An increase in their knowledge would be an indication that the training was effective-it did what it was supposed to do. Yet two weeks after the training, when one of the employees was back at her job location, a situation arose in which she engaged in a serious altercation with another employee and failed to use the skills taught. She used her older, more comfortable procedure for addressing communication differences across cultures and caused a problem that put her and her coworkers at the risk of suspension. Here is an example of training that was effective-the worker passed all the posttests-but had little impact on changing the behavior of the employee.

 

Thus the impact that the program has had on the people or organization for which it was planned becomes an important evaluation consideration. “Impact” evaluation examines whether and to what extent there are long-term and sustained changes in a target population. Has the program or initiative brought about the desired changes: Are employees using the new procedures? Do your employees have more job satisfaction?

 

Evaluators frequently pay too little attention to assessing impact. One reason is that “impacts” often manifest themselves over time, and Diversity Practitioners have already turned their attention elsewhere before computing this aspect of the evaluation. The actual impact that training in new procedures might have in people’s everyday life often needs time to percolate and evolve. An attempt to collect impact data after allowing for this delay may run into a number of roadblocks such as learner turnover (you cannot find them), job or circumstance change (they no longer are in situations that demand heavy use of the skill taught), or lack of time or resources for the evaluator to conduct these follow-up activities.

 

Still, program and project sponsors are most interested in impacts. Whether a learner feels satisfied with the training or the training results in knowledge gain means little to a sponsor or employer if the learning doesn’t help the organization.

 

Evaluating Alternatives

 

The second philosophical statement that defines evaluation presents it as the process of delineating, obtaining, and providing useful information for the purpose of selecting among alternatives. Thus, it may not matter whether the program was efficiently conducted, effective, or had an impact on behavior or functions, Instead, the value of the evaluation is in its being able to compare one activity to another, one initiative or program to another, or one employee to another so that decisions can be made in the presence of empirically collected data. Diversity Search Committees perform this kind of evaluation. In the course of their work, they describe job candidates’ strengths, outline previous experiences, and acquire other useful information that makes it possible to choose among a number of candidates. A company planning to adopt and purchase a computer system will perform this kind of evaluation on all the systems it is considering. It will select the one that performs the best given the needs and resources of the company.

 

Identifying Areas to Improve

 

Finally, there is a third way of defining evaluation: Evaluation is the identification of discrepancies between where a program or initiative is currently and where it would like to be. For example, an organization’s multicultural marketing department may have as one of its goals at least one face-to-face focus group with emerging market customers per year. Currently, its Sales force sees fewer than half of the multicultural customers in a year. Records of face-to-face calls indicate the discrepancy between where XYZ Corporation is currently as opposed to where the organization wants to be.

 

Personnel evaluations often take on this definition as well. A new employee’s first evaluation may be an example of the first definition, that is, an evaluation against some minimal standard of performance. After this initial evaluation, certain performance goals are set for the employee (either mutually or by the supervisor or team. The next and all subsequent evaluations of the employee are compared with those performance goals or standards. The discrepancies are identified and remediation strategies are developed.

 

The Critical 7 Levels — Don’t Perform Your Diversity Initiative or Diversity Program Evaluation without Them!

 

Other levels of evaluation as defined by the Hubbard Diversity ROI Methodology refer to the eventual us of the evaluation data and who might make use of the results

Diversity Return on Expectations (DROEx®), for example, must be based on evidence and impact results. I have found it useful to first to distinguish the “evidence-based, outcome-focused” measures from other types of “activity only” measures. Anyone responsible for implementing Diversity initiatives is also responsible for evaluation. Whether you calculate the impact or not, from management’s and/or the stakeholder’s point of view, “you will always own the ROI of the initiatives you implement”. So, the amount of evaluation that you provide to meet expectations 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 effectively demonstrate your ROI impact and show a “chain of impact” to meet customer and stakeholder expectations that is evidence-based and credible:

  • Level 0: Business and Performer 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 initiative, then a Level 1 evaluation is sufficient. But, if your goal is to determine whether your diversity initiative is having a positive effect on job performance, then you will have to perform a Level 3 evaluation. This means you will also have to conduct Level 1 and 2 evaluations in order to assess the learning performance applications and Job impact at Level 3 (an example of the “DROI® Chain of Impact”). They provide the basis for determining whether participants demonstrated that they learned by putting these skills and attitudes to use (verified by a Level 3 evaluation).

 

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 to meet expectations. When Diversity Practitioners 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 to meet customer and key stakeholder expectations.

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, must include 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 C-Suite 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 which provide strategies detailing how diverse people interact and what drives their behavior to produce successful organizational outcomes.

 

If we examine any other professional discipline or field of study, like Medicine, Engineering, Accountancy, Science, etc., we expect that they are able to prove the efficiency, effectiveness, and impact of the solutions, programs and initiatives they what us to support. Why should Diversity and Inclusion be any different if we want our processes to have credibility and support?

 

Conducting a comprehensive Diversity Evaluation is the only true way to know if your Diversity and inclusion programs or initiatives are delivering the outcome results expected by key stakeholders to meet the needs of the organization. It is essential that Diversity Practitioners master critical Diversity and Inclusion evaluation methods using technologies that are rooted in Diversity ROI science. Why? Because the perceived value and credibility of what we do to be seen as a true Business Partner and Professional depends on it! Are you evaluating your Diversity and Inclusion initiatives and programs at this level?? What’s your department’s Brand and Credibility Image in your organization??

Resolve to Transform Yourself into an Evidence-based Diversity ROI Professional for 2015

Resolve to Transform Yourself into an Evidence-based Diversity ROI Professional for 2015

When it comes to setting goals for 2015 to improve your Diversity ROI and measurement methods, what are your resolutions for the New Year? What is your plan to improve your “Diversity Measurement Brand” as an effective Strategic Business Partner with critical expertise and capability? Are you familiar with the skills and capabilities needed to position yourself and your department as an effective, competent, evidence-based ROI resource the organization can call on this year?

Wikipedia defines a “New Year’s Resolution” as a tradition, most common in the Western Hemisphere but also found in the Eastern Hemisphere, in which a person makes a promise to do an act of self-improvement or something slightly nice, such as opening doors for people beginning from New Year’s Day.

Some additional examples include resolutions to donate to the poor more often, to become more assertive, or to become more environmentally responsible.

Popular goals include resolutions to:

  • Improve physical well-being: eat healthy food, lose weight, exercise more, eat better, drink less alcohol, quit smoking, stop biting nails, get rid of old bad habits
  • Improve mental well-being: think positive, laugh more often, enjoy life
  • Improve finances: get out of debt, save money, make small investments
  • Improve career: perform better at current job, get a better job, establish own business
  • Improve education: improve grades, get a better education, learn something new (such as a foreign language or music), study often, read more books, improve talents
  • Improve self: become more organized, reduce stress, be less grumpy, manage time, be more independent, perhaps watch less television, play fewer sitting-down video games
  • Take a trip

Often, it is quite a list. Some people are successful at achieving the goals they set while others sputter and can’t quite get off the blocks to run their race.

Success Rate

A 2014 comprehensive study commissioned by Australian comparison website finder.com found that of the more than 2,000 people surveyed, 42% of the participants set a New Years’ Resolution however, most failed at their goals. In fact, the study showed that almost two in three people (62%) didn’t succeed with their resolutions. Interestingly, out of those who did achieve their resolutions, three in four participants (76%) believed that sharing their goals, for example on a social networking service, helped them reach their target.

The most common reason for participants failing to complete their New Years’ Resolutions was setting unrealistic goals (35%), while 33% didn’t keep track of their progress and 23% of the group forgot about them. About one in 10 respondents claimed they made too many resolutions. Lessons learned from the Australian website finder.com.au offers sage advice about what to do and what not to do when planning your 2015 strategy.

In a Blog earlier this year, I mentioned that demonstrating effective, evidence-based D&I acumen is both an art and science: it results from using solid, proven, tested techniques (the science) of diversity ROI analytics and measurement strategies in an inspiring and engaging way (the art of diversity ROI analytics and measurement strategies). Rather than advocating one specific diversity intervention product or service, a strategy I have found worth considering is thinking about the active science-based ingredients that constitute an effective diversity intervention or solution — then you can match and locate the effective features in the measurement and analysis approach you are reviewing to ensure it meets your needs.

There are a huge number of diversity, inclusion, and training approaches available in the marketplace. They usually try to lure you in by highlighting their ability to address a particular problem or issue the organization is facing and promise to provide you with the things you need to achieve your organizational goals. As a diversity professional, the real trick is finding the interventions or solutions that work and work consistently to drive sustainability. If you want to implement a solution or intervention that delivers a measurable ROI or a measurable non-financial impact, you must be able to access a decision framework that is effective and drives results. The proposed solution or intervention must be able to connect to the roots of your organization’s DNA. This should be a critical area of focus for 2015.

Building a Recipe for Accountability and Success

To do this successfully, it is important to have as much detail as possible when specifying the requirements of a diversity intervention. Many projects run into difficulty, misunderstandings and differences in expected outcomes because the requirements are not planned and well-documented. These issues are often outlined in a diversity project proposal or detailed in the project’s scope documentation. Regardless of the way it is developed, the following items should be included to achieve the best chance for success for your 2015 initiatives. More importantly, the evidence-based diversity professional and the evaluation project’s sponsor need to reach an agreement about these key issues to create a sound strategic partnership and build accountability for the end result.

Ingredient 1: Does the Proposed Solution Include a Diagnostic Approach and Analytical Alignment Tools?

I have long advocated that diversity and inclusion should not be seen as a mere theory, but should be used as a performance improvement technology with its own set of ROI-based analytics and process improvement sciences. Driving business performance improvement requires that you have a detailed understanding of the diversity ROI evaluation methodology and how it works. It begins with some initial planning, and continues with the implementation of a comprehensive data collection and evaluation process. The initial planning and analysis step is critical for generating a successful diversity intervention. Many diversity practitioners trying to develop effective business solutions find out after the fact that they should have spent more time planning the strategic linkage and alignment of the diversity initiatives that will drive the business challenges and opportunities they are trying to effect.

Ingredient 2: Does the Proposed Solution Have Objectives That Are Behaviorally Specific?

When it comes to diversity evaluation projects, there are two sets of objectives. First, there are the objectives for the diversity evaluation project itself, indicating specifically what will be accomplished and delivered through the evaluation process. The other set of objectives are called the diversity initiative objectives and focuses on the goals of the actual diversity initiative that will ultimately add value to the organization.

Every diversity evaluation project should have a major project objective, and in most cases, multiple objectives. The objectives should be as specific as possible and focused directly on the diversity evaluation. Sample project objectives may focus on the following outcomes:

  • Determine if the diversity initiative is accomplishing its objectives.
  • Identify the strengths and weaknesses in the diversity initiative.
  • Determine the benefit/cost ratio and ROI of the diversity initiative.
  • Identify who benefited the most and least from the diversity initiative.
  • Gather data to assist in pursuing future initiatives.

As the list illustrates, the objectives are broad in scope, outlining from an overall perspective what is to be accomplished. The details of timing, specifications and specific deliverables come later. The broad diversity evaluation project objectives are critical because they bring focus to the project quickly. They define the basic parameters of the project and are often the beginning points of a discussion with those involved in the project.

Ingredient 3: Does the Proposed Solution Have a Clearly Defined Scope?

The scope of the diversity evaluation project needs to be clearly defined. The scope can pinpoint key parameters addressed by the project. The following list shows typical scope issues that should be defined in the project:

  • Target group for the evaluation.
  • Location of the target group.
  • Time frame for the evaluation.
  • Technology necessary to conduct the evaluation.
  • Access to stakeholders.
  • Product line(s) to cover.
  • Type of diversity process/activity/competencies being evaluated or improved.
  • Constraints on data collection.

Perhaps the project is limited to certain employee or demographic groups, a functional area of the business, a specific location, a unique type of strategy or a precise time frame. Sometimes there is a constraint on the type of data collected or access to certain individuals, such as particular customers in a targeted market segment. Whatever the scope involves, it needs to be clearly defined in this section.

Ingredient 4: Is the Timing Clearly Defined?

Timing is critical in showing specifically when the diversity intervention activities will occur. This means not only the timing of the delivery of the final diversity ROI study report but also the timing of particular steps and events — including when data are needed, analyzed and reported and when presentations are made. The following list shows typical scheduled activities:

  • Diversity initiatives or solutions developed.
  • Diversity initiatives implementation started.
  • Diversity initiatives implementation completed.
  • Start of the diversity ROI evaluation project.
  • Data collection design completed.
  • Evaluation design completed.
  • Data collection begins.
  • Data collection completed.
  • Specific data collection issues (for example, pilot testing, executive interviews).
  • Data analysis completed.
  • Preliminary results available.
  • Report developed.
  • Presentation to management.

Ingredient 5: Does the Proposed Solution Spell Out the Specific Diversity Intervention Deliverables?

This section describes exactly what the project sponsor or client will receive when the diversity intervention is completed in terms of improved competencies, reports, documents, systems and processes. Whatever the specific deliverables, they are clearly defined in this section. Most projects will have a final report, but they often go much further, delivering new skill sets, processes and suggested methodologies for improving the diversity process and business issues being addressed.

Ingredient 6: Does the Proposed Solution Clearly Utilize a Proven Science-based Methodology and Approach?

If a specific methodology is to be used for the diversity ROI intervention, it should be defined and state the scientific basis for its ability to obtain measurable results. A reference should be made to the appropriateness of the methodology, and how the methodology will accomplish what is needed for the diversity initiative to be successful. This helps prevent initiatives that are merely “fads” that do not and cannot generate the desired outcome. Just because participants enjoy the intervention doesn’t mean that you will have improved performance. It must be constructed with key ingredients to achieve its behaviorally stated objectives and measurable, evidence-based outcomes. A well-designed diversity intervention can produce both: an enjoyable process and measurable results.

Ingredient 7: Does the Proposed Solution Have Clearly Defined Steps?

The specific steps that will occur should be defined showing key milestones. This provides a step-by-step understanding and tracking of the diversity evaluation project such that at any given time the project sponsor or client can see not only where progress is made but also where the evaluation project is going next.

Ingredient 8: Does the Proposed Solution Spell Out the Resources Required for Success?

This section should define specific resources required to implement the intervention. This could include access to individuals, vendors, technology, equipment, facilities, competitors or customers. All resources that may be needed should be listed along with details regarding the timing and circumstances under which the resources will be needed.

Ingredient 9: Does the Proposed Solution Highlight Fully Loaded Costs and Benefits?

The cost section details the specific costs tied to different steps of the intervention process. There is often reluctance to detail costs; however, it is important to understand the different steps of the process and their relative costs. This cost outline should also be linked to driving the organization’s strategic objectives and mission. When calculating the diversity return on investment for a diversity initiative, all costs are considered. This includes not only development and implementation costs but also the costs of evaluating the program.

Ingredient 10: Does the Diversity Intervention Provide a Causal Chain of Impact to Demonstrate and Isolate Diversity’s Contribution to the Results Versus Other Contributors?

Eventually a diversity initiative or intervention should lead to some level of impact on the organization’s business. In some situations, the diversity initiative is aimed at softer issues, such as improving the diverse workforce climate, employee satisfaction, diverse customer group satisfaction and reducing diverse workgroup conflict reduction. In other situations, diversity initiatives are aimed at more tangible issues such as cost reductions, market share, revenue improvements, productivity and number of voluntary turnovers, all sorted by demographic group. Whatever the case, diversity initiatives and interventions should have multiple levels of objectives and must be able to demonstrate how the specific diversity intervention drove the improvement differences and results that were achieved. These levels of objectives, ranging from qualitative to quantitative, define precisely what will occur as a particular diversity initiative is implemented in the organization. These objectives are so critical that they need special attention in their development and use. The Hubbard Diversity ROI Model and seven-level chain of impact can assist you in generating diversity interventions with these characteristics.

Ingredient 11: Does the Diversity Intervention Have a Comprehensive Data Collection Process?

Data collection is the most crucial step of the evaluation process because without data, there is no evidence of the diversity initiative’s impact. During the data collection process, it is necessary to determine the participants’ reactions to and satisfaction with the diversity initiative (Level 1), their level of learning from the intervention (Level 2), the amount of application and implementation that happened as a consequence of the diversity initiative (Level 3), the resulting business impact (Level 4), and whether the initiative generated benefits and a return on investment (Levels 5 and 6). It is necessary to collect data from at least levels 1-4 because of the chain of impact that must exist for a diversity initiative to be successfully applied into the organizational system and provide value. To reap the benefits of the chain of impact, a key business problem that can be addressed by diversity must be identified during the Needs Analysis Phase (Level 0). It also requires that participants in the diversity initiative experience a positive reaction to the initiative and its potential applications. They must acquire new knowledge or skills to perform at an improved level that is a direct result of the diversity intervention. As application or implementation opportunities arise, there should be changes in their “on-the-job” behavior that result in a measurable, positive impact on the organization. The only way to know if the chain of impact has occurred up to this point is to collect data at all four levels. The diversity initiative will also generate benefits that are either quantitative or qualitative in the forms of benefit-to-cost, dollar return on investment and anecdotal impacts.

An effective evidence-based diversity ROI initiative must be built on a comprehensive, evidence-based planning and data collection model that incorporates appropriate scientific process and critical factual information. By utilizing these science-based techniques to plan and collect data, your diversity interventions and evaluation studies in 2015 will begin on a solid foundation that positions the initiatives for improved performance and organizational success.

Sample Resolutions for your 2015 Transformation Strategy could include any and all of the following:

  1. I will align my Diversity and Inclusion initiatives with my organization’s overall business strategies to drive its goals, objectives and outcomes.

      2. I will design and deliver better, more effective Diversity and Inclusion (D&I) initiatives using Diversity ROI approaches such as the Hubbard Diversity ROI Methodology and its 7-Level Evaluation framework. This Framework will consist of evaluating my initiatives at the appropriate level depending on the specific initiative’s and stakeholder’s requirements:

  • Level 0: Business and performer 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.

 

  1. I will support my organization’s greatest asset—it’s people—by providing clear pathways for development using Diversity ROI-based tools such as the Hubbard 7-Level Evaluation framework to generate a measurement “Chain of Impact” to gauge the strength of the linkage between my Diversity and Inclusion (D&I) initiatives and their impact on the organization’s bottom-line. I will use this feedback to determine whether the development objectives have been achieved.

 

  1. I will use technology to build innovative processes and improve performance using team-based measurement and evaluation processes as well as automated online calculators, Dashboards and Scorecards to generate consistency and a clear baseline to judge progress over time.

 

  1. I will use research-based ROI practices to improve the effectiveness of my Diversity training programs. This will include conducting Diversity ROI studies I can use as communication tools to demonstrate the effectiveness of our initiatives as well as build an enhanced “Brand image”.

 

  1. I will use Diversity measurement, Diversity analytics (predictive, etc.), and other data to measure and improve organizational and individual performance.

 

  1. I will be a better leader in 2015 by increasing my personal competency and skills in the area of Diversity ROI measurement and evaluation (through Diversity ROI training and Certification).

 

  1. I will apply a worldview to problem solving by learning “how to” implement Diversity ROI-based analytical case study initiatives across cultures globally.

 

  1. I will help others reach their full potential through specific development initiatives by monitoring measuring and evaluating individual performance and the degree to which targeted level improvement milestones have been reached.

 

  1. I will use creative tactics and measurement strategies to involve the learner and improve the retention impact of our organizational talent base.

 

Adopting the Diversity ROI Evaluation and Measurement Resolutions, mentioned above, for 2015 can be an excellent way to kick off the New Year! Wishing you all the best and much success in your transformation!

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Using a Diversity ROI Analytics Business Case to Show Diversity & Inclusion’s Payoff in Big $$$

Organizations depend on their diverse employees to grow their bottom line and achieve the aggressive goals needed to win in today’s global, fast-paced economy. They know the marketplace is full of a diverse group of customers, yet they do not always effectively utilize their diverse workforce members to create innovative, paradigm-shifting solutions.

This guide is designed to help you build your Diversity ROI Business Case to demonstrate value-added by aligning with key business goals and objectives:

  1. Market Share Improvement
  2. Improving Global Leadership and Management Capability
  3. Lowering Costs and Increasing Productivity
  4. Developing New Revenue Sources

Why should you concern yourself with effective Diversity ROI Measurement and Management? In the past, many managers answered this question out of a sense of the “right thing to do” or because they were seeing more and more people who didn’t look like them in the workforce, or merely felt they had to meet the organization’s requirement for working with diverse groups. However, today’s managers know that without effective diversity management capability, organizational effectiveness is in jeopardy. Being effective at managing a diverse workforce for example, helps to lift morale, improve processes, bring access to new segments of the marketplace and enhance productivity of the organization. In essence, it is good for business.

In profit-making organizations, maximizing the difference between revenues and costs optimizes performance. This same goal exists in many non-profit organizations, except that the result is called surplus instead of profits. The question therefore is: “How are workforce Diversity and its management related to revenues, costs, or both?” To answer this question we can explore several concepts and strategies that illustrate the impact of diversity on business performance. These concepts and strategies include items such as marketing strategies, problem-solving strategies, creativity and innovation that can be viewed as important factors in revenue generation.

Marketing Strategies and Market Share Improvement

We live in an increasing global world that is diverse. Whether your business includes marketing financial services, computers, telecommunications products, social services, health care equipment, manufacturing processes, engineering expertise, and the like, expertise in addressing a diverse customer market (Business-Consumer Archetype) will be essential to your success. For example, an automobile manufacturer in Japan cannot afford to ignore the fact that nearly half of all new car buyers in the United States are women. This is true regardless of the gender make up of car buyers in Japan. Likewise, no reasonable person in the consumer-goods industry can afford to ignore the fact that roughly a quarter of the world’s population is Chinese and immigration to the United States from mostly Asian and Latin American countries is occurring at a rate of more than a million people per year.

We know that in the United States, Asians, African-Americans, and Hispanics combined now collectively represent over a $Trillion dollars annually in consumer spending. The Selig Center for Economic Growth (from the University of Georgia Terry School of Management) estimates and projections of buying power for minorities—African Americans, Asians, Native Americans, and Hispanics—definitely share in driving business success, and together wield formidable economic clout. As these groups increase in number and purchasing power, their growing shares of the U.S. consumer market draw avid attention from producers, retailers, and service providers alike.

The buying power data presented here and differences in spending by race and/or ethnicity suggest that one general advertisement, product, or service geared for all consumers increasingly miss many potentially profitable market opportunities. As the U.S. consumer market becomes more diverse, advertising, products, and media must be tailored to each market segment. With this in mind, new entrepreneurs, established businesses, marketing specialists, economic development organizations, and chambers of commerce now seek estimates of the buying power of the nation’s major racial and ethnic minority groups.

In a Business-Consumer Archetype (B to C), your diversity measurement strategies and analytics must be “Relationship/Brand Focused”. They must measure your organization’s ability to build customer intimacy knowledge and “use it” in measurable ways to generate outcome-based results that add revenue and other value to the bottom-line. Sample Diversity measurement strategies must focus on areas such as: Cultural Competence, Market Share, Brand, Relationship/Service-based outcomes, etc.

Sample metrics may include:

  • % Market Share
  • $ Share of Wallet by Demographic Group
  • #/% Diversity Competent Leaders/Managers by Demographic Group
  • #/% New Products generated by Demographic Group and for Demographic Groups
  • Improvement in Average Speed of Problem Resolution using Diverse Work Team Suggestions
  • % Favorable Response on Diverse Customer Satisfaction Surveys

In a Business-Business Archetype (B to B) on the other hand, your Diversity Measurement strategies and Diversity Analytics must be “Relationship/Product/Process Focused”. Sample Diversity measurement strategies must focus on areas such as: Innovation, Creativity, Process Improvement, Relationship/Service-based outcomes, etc.

Sample metrics may include:

  • Consultative Selling-Culture/Style Match
  • Customer Relations Effectiveness using Diverse Workforce Suggestions
  • Creativity (Competitive Edge Generation) – # Patents Generated by Demographic Group
  • Innovation (Diverse Work Team)
  • Cycle-time Reduction – Process speed to market
  • Solution Set Match-to-Problem (Improvements generated by diverse team)
  • Cost Reduction (strategic Diversity)

Research to prove the value of Diversity and Inclusion must clearly demonstrate a “causal chain of impact” working through seven levels of analysis as well as isolate Diversity and Inclusion’s contribution from other possible contributors. These processes and sciences are embedded in in the Hubbard Diversity ROI Methodology and the Diversity High Impact Mapping process.

Improving Global Leadership and Management Capability

If an organization plans to sell or deliver goods and services in a diverse marketplace, it must be fully capable of effectively utilizing its diverse workforce in key strategic ways. For instance, it is important from a public relations point of view to be viewed as a company that is known for managing and utilizing its diverse workforce assets well. There are a number of well-publicized ratings for “The Best Company for Working Women and Working Mothers”, “The Most Admired Company” and the “The Top 50 Companies for Women and Minorities”. This fuels a public relations climate where workforce talent and consumers make choices about the organizations they would work for and buy from. This line of thinking is also supported by a study of stock price responses to publicity that changed either positively or negatively on an organization’s ability to manage diversity. Many studies have found that announcements of awards for exemplary efforts resulted in significant positive changes in stock prices while announcements of discrimination suits resulted in significant negative changes in stock prices.

In addition, organizations can gain a lot from the insights of its diverse workforce to understand the cultural effects of buying decisions and mapping strategies to respond to them. Depending on the product or service delivered by the organization, many employees may also represent part of the firm’s customer base! A good reputation inside the organization can help product and service sales outside the organization. Another key marketing strategy includes tapping employee network or resource groups. They can be an excellent resource for focus groups, feedback and ideas for honing the organization’s reach into diverse marketplace opportunities.

Lowering Costs and Increasing Productivity

Revenue increases can also show up due to improvements in diverse work team problem solving and decision-making. Diverse work teams have a broader and richer base of experience to draw on in solving organizations problems and issues. The presence of minority views creates higher levels of critical analysis of assumptions and implications of decisions. In addition, it also generates an increase in the number of alternatives from which the group chooses. Problem solving benefits from diverse work groups do not happen by simply mixing people together who are culturally different. The improved outcomes heavily depend on a diversity-competent manager “utilizing” key diverse insights and experiences of the total group.

In one study, researchers found that properly managed and trained diverse work teams produced scores that were six times higher than homogeneous teams. Researchers also found that it is important how a diverse team uses its diversity. For example, those diverse teams that recognized and utilized their diversity had higher productivity. Even when the team was diverse, if that diversity is not used effectively, it can cause process problems that result in lower team productivity. The essential variable is a Leader’s or Manager’s ability to “effectively manage and utilize the team’s diversity”.

Developing New Revenue Sources

Creativity and innovation can be vital to an organization’s ability to perform. New product introductions, advertising, process re-engineering, quality improvements and the like are examples where these skills are required. Diverse work teams have also been found to promote improved creativity and innovation that generates revenue. In her book “The Change Masters”, Rosabeth Moss Kanter notes that highly innovative companies have done a better job of eradicating racism, sexism, and classism; tend to have workforces that are more race and gender diverse, and take deliberate steps to create heterogeneous work teams with the objective of bringing that diversity to bear on organizational problems and issues. Many organizations such as Pepsico for example, with the introduction of Guacamole Chips, and other innovations, created a plethora of new product SKUs generated by utilizing their diverse Employee Resource and Business Resource Groups.

As the buying power of diverse consumer segments including women, Hispanics, African Americans, and the lesbian, gay, bisexual and transgender community continues to grow, these segments represent a marketplace opportunity too big for retailers and consumer product manufacturers to ignore, according to “The Changing Consumer and the Workforce Imperative” Report. “This report focuses on how the retail and consumer products industry can unleash our multicultural workforces to achieve results that benefit our employees, our communities and our companies,” said Network Chair Michelle Gloeckler, senior vice president for merchandising execution at Walmart Stores. “Research for this project began at last year’s NEW Multicultural Workforce Conference and the results were previewed at this year’s conference in March. The Network believes that diversity and inclusion is critical to the future of our business.”

The report, based in part on one-on-one interviews with more than two-dozen leading U.S. consumer goods and retail executives, explores the correlation between workforce diversity and the ability of the consumer goods and retail industries to engage the changing U.S. consumer.

“Cultural connections are critical to understanding what drives purchasing decisions and brand loyalty across different market segments,” said Alison Paul, immediate past president of the Network of Executive Women, and vice chairman and U.S. retail sector leader, Deloitte LLP. “Making these connections rely on retailers’ and manufacturers’ ability to not only become more culturally aware-which are increasingly table stakes–but harness and value diverse perspectives as a source of innovation.”

Consumer insights most often come from those who share a consumer’s cultural experience, the report concludes. As such, recruiting, retaining and advancing a diverse workforce are integral to creating a brand/consumer connection, as consumers feel most comfortable doing business with companies whose employees mirror their communities.

According to the report, consumer product manufacturers and retailers may be able to achieve an inclusive culture by first understanding the bottom-line business opportunity, then making a commitment to diversity that touches all company departments. Top management should view workforce diversity not as a stand-alone program, but as an essential element for business survival. Achieving cultural competency involves leadership commitment and communication, employee accountability, strong talent recruiting and retention programs, progressive succession planning, diverse supplier relationships, and effective ROI measurement and analysis processes that capture impacts and results.

Appealing to a carefully segmented, diverse market is no longer only a niche opportunity for adventurous store managers and edgy entrepreneurs: Multiculturalism is fast becoming a retail and consumer goods industry opportunity too big to ignore. The same is true for “B to B” organizations as well. A diverse workforce serving a broadened customer base is a critical success factor because, as market research further demonstrates, a diverse workforce improves service outcomes and enhances financial performance regardless of the specific archetype.

Embracing Diversity as a way of thinking is the most effective response for business leaders and an important driver of an organization’s innovative engine. This means Diversity and Inclusion, and the archetypes that drive its constant performance, need to be brought to the forefront of your value proposition and ingrained in the organization’s cultural DNA. It must become a branded component of how you do business. When an authentic, inclusive culture is at work, a diverse workforce becomes capable of producing a broad range of original and engaging ideas that is simply not possible among homogenous employee populations. At the top of the organization, this can translate into more apt and financially rewarding decision-making.

The Diversity ROI Business Case highlighting the link between “Diversity and Inclusion Utilization” and Business Performance, not merely acquiring “Representation” alone, can be made by utilizing Diversity ROI processes and practices. From a Diversity ROI standpoint, Diversity measures and analytics must capture the outcomes and impact of these Diversity and business strategies in a way that demonstrates compelling evidence of Diversity’s contribution to the organization’s business objectives and results. By using tools such as the Diversity ROI 7-Level Chain-of-Impact, the Hubbard Diversity ROI Methodology, the Diversity High Impact Map, a ROI-based Diversity Scorecard, etc., a strong business Diversity ROI Business Case can be made in dollars and “sense” that clearly shows Diversity and Inclusion as “great for business”!

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. Dr. Hubbard is available for Keynote Presentations, Executive Briefings, Workshops, etc. He can be reached at http://www.hubbardnhubbardinc.com/contact-us.html