Think about the most extraordinary contribution that diversity and inclusion (D&I) has made to your organization and its success. Now, imagine a future in which your organization identifies critical D&I levers that improve strategic business outcomes.
- Think about what you see in this future organization. What is different about your leadership and your culture? What is new about your staff? How has workforce capability grown? What changes have occurred in workplace structure, systems, processes, and rewards? What are the organization’s core values and key operating principles? How have engagement, productivity, and performance improved?
- Imagine the successes the business is experiencing. What is enabling business success? Do you have innovative products and service, new revenue streams, and new markets? What gains have you made in social responsibility and reputation? How have quality and safety improved? Are customers more loyal? Are acquisitions more successful? Have you increased the wealth of your shareholders?
- Finally, think about what measures your business is using to show the causal relationship between D&I strategies and financial performance and success.
This last point is where things start to become unclear for a lot of D&I practitioners. We often struggle with identifying and applying meaningful metrics for our work, and a fundamental challenge in our field is to reframe the evidence based relationship in order to empirically demonstrate the impact of diversity on business performance. However, we need to determine what metrics clearly demonstrate that D&I strategies are producing D&I outcomes that, in turn, deliver mission critical value, such as profit.
The field of D&I has built a foundation of measures that are helpful. When new professionals enter our field and ask, “How do you measure diversity?” we have some answers. We show them our scorecards and the criteria for D&I best practice awards. We may refer them to Hubbard and Hubbard, Scott Page, Virtcom, 20-First, Catalyst, McKinsey or others who write and consult on this topic. We tell them there will be a workshop about metrics at the next D&I conference. Indeed, we have numbers that include milestones of progress toward goals and objectives, and measures of efficiency and speed. These analytics contribute to our work allowing us to see patterns, trends, and outliers in our efforts to document participation in training initiatives or achieve balanced representation in management.
However, when I think about holistic measurement systems that show a causal relationship between diversity and revenue or innovation or quality, I often feel like I am seeing smoke in mirrors, shadows that are proxies for real value, skeletons that don’t flesh out the whole story, filters that prevent us from seeing clearly, and reflections rather than reality.
Part of the challenge is that some D&I impacts are not measurable in the language of the business world, and some D&I outcomes won’t have a clear, distinct causal relationship with business outcomes. Indeed, Albert Einstein made a valuable point when he said, “Not everything that counts can be counted, and not everything that can be counted counts.” However, good metrics provide insight that help us make good decisions about how to make the most of limited resources by focusing on efforts with the best return, so we have a responsibility to our businesses to improve evidence-based metrics when it is possible. Consider the following:
What is the actual impact on business of having 100% of employees attend diversity training? When you launched a women’s leadership speaker series, what amount of revenue did that generate? When you accomplished all of your annual goals for D&I, what specific impact did you have on business results?
- For those inclined to doubt the business case for D&I, are our current measures enough?
- Are we using antiquated roadmaps when we are trying to fly?
- What measures will tell the full value story of D&I?
These ideas challenge us as we strive for increased credibility, resources, and support for D&I by demonstrating the links between our diversity practices, their outcomes, and important outcomes to business.
Many of the Chief Diversity Officers I coach ask me what diversity practitioners measure. Although benchmarks can be helpful, I ask them to consider alternate questions that help identify what measurements meet the real requirements of their unique D&I strategy. These questions often include:
- 1) What business outcomes are critical to your organization’s success?
- 2) What D&I outcomes do your organization and its stakeholders need?
- 3) Do you need to show how your D&I outcomes are causing or contributing to positive business outcomes? If so, why?
- 4) How will you know if you are successfully meeting necessary outcomes?
- 5) What quantitative and qualitative metrics will inform you about how successfully you are progressing toward mission-critical outcomes?
- 1) What insight do you need from the measurements?
- 2) What decisions will you make based on the metrics?
- 3) How can you focus the way you share metrics to help decision-makers resource and commit to D&I?
- 4) What will it cost your D&I strategy, as well as your organization and its employees and customers, if you don’t measure the right things in the right way?
- 5) If you could easily measure what you believe is most valuable to measure, what would you measure and why? What might you stop measuring and why?
What mix of qualitative and quantitative data will you analyze to help you demonstrate the link between diversity and mission-critical business results?