Posted on May 3rd, 2023

There is a loud cry about how Chief Diversity Officers are failing. As a pioneer in this space and as someone who has educated CDOS at some of the top organizations globally, I believe that this is incorrect. In fact, I wrote the seminal article in 2013 about why DEI efforts have failed. While some things have changed since then, much remains the same. 

http://www.gsworkplace.lbl.gov/DocumentArchive/DiversityReferences/The%20Diversity%20Factor.pdf.

This article is part of a larger research and application project I am undertaking. I will preview 5 of the reasons why organizations are failing CDOS as well as some advice as to how to correct this. First, many organizations still believe that DEI is HR and The CDO thus reports to HR. This is fundamentally flawed. While there are some aspects of H.R. that are a part of The CDO’s portfolio, the role should be a senior role that collaborates with not report to H.R. The position should be a C-level position as its responsibility across the enterprise must include: Supplier Diversity, Marketing and Messaging, ESG and business. In fact, simply relegating the role to H.R. is neither strategic nor is it sustainable. In fact, it sets the position and the effort for failure. Some people may think, why can’t HR take care of diversity, equity, and inclusion? Isn’t that HR’s job? Well, the simple answer is, most HR departments are not equipped to do so, nor have the time, skills, and staffing to tackle these crucial elements of today’s workforce. Therefore, with leadership’s support, hiring a Chief Diversity Officer is one way to ensure a company transforms into a work culture where all employees and customers are protected, feel safe, given an equal chance, and are treated with dignity and respect.

Second, many CEOS simply don’t have a vested interest in the success of DEI. They will talk about profitability without understanding the impact of DEI on profit and performance. A highly experienced CDO can help the organization develop strategies that lead to customer attraction and success. As this Forbes article points out. “A firm’s gender disparities can impact its profits immensely, and a study from McKinsey & Company shows how much. On average, companies that practiced gender diversity in executive teams outperformed peers by over 20%.” Moreover, In contrast, companies without diverse leadership teams are more likely to underperform than their counterparts, where minorities are underrepresented. Black female executives face a double bias and consequently lack representation the most. By giving these minorities an influential voice, firms could unlock the secret to new revenue opportunities. 

https://www.forbes.com/sites/theyec/2021/12/20/three-tips-for-boosting-business-profits-how-investing-in-diversity-increases-profitability/?sh=3d0253da66e8

Three. Diversity is seen merely as a cost center. Many private, public and non-profit organizations see DEI as merely a cost center. Just because an organization professes to value DEI as core to its mission does not mean that it values DEI. It is the Do what I say, not what I do. They beehive because of their legacy and sponsorship of DEIB events, they are committed. But, when it is time to customers costs, they start with DEIB. As Forbes notes, “The bulk of organizations cite diversity and inclusion as crucial and vital to improvement, but few have tactics to increase DEI that extend beyond hiring. Many are hiring a Chief Diversity Officer to ensure DEI is at the forefront of a company’s goals and missions. “ However, they still believe that DEIB is a cost center and does not and cannot drive revenue. By contrast, Human resources … human assets … human capital. Call it what you will, the collected “people power” or workforce value of an organization is an asset that is difficult to measure. Similar to measuring physical assets like the cost of machinery and equipment, HR measurements have focused on “tangible” items like cost of salaries, cost of benefits, training expenses — items that reflect the dollars an organization has invested in its Human Resources. assets.https://workplacexperts.com/resources/Image%20Makeover.pdf. Yet the committed organizations as they call themselves, do not allow DEIB Officers to change to shift how it sees itself, measures itself, and helps executives connect DEI practices to business results.

Fourth. Organizations have not developed sufficient quantitative and qualitative metrics that make the value proposition clear. Instead, they rely on the trite phrase of “the business case for Diversity.” Anyone who knows the history of this phrase know that it was a reaction term developed to ease the early critique of DEIB. The point was to try to fit business measures into DEIB. That has not worked. The value proposition answers the question what is the value of DEIB to the organization and how do we measure it. If DEIB was “the right thing to do” it would have already been done.

Fifth. DEIB is still reactionary. The DEIB Officer in many organizations still have a heft compliance role in their portfolio. That is an HR responsibility. The point is not to react to an incident, but to have strategies in lace to show and live the reality of DEIB. Compliance should never be a part of The CDO’s role. Instead, organizations must allow The CDO to identify how a diverse, equitable and inclusive workforce will support your organization’s business objectives. Once you identify those objectives, your DEI strategy needs to align with them. Do you strive to be more innovative? Do you want to focus on increasing your profitability? Perhaps you want happier employees to increase retention. Or better relationships with your vendors — the possibilities are vast.

Identifying the relationship between your DEI initiatives and your business goals will also help secure the necessary support from senior management. It’s also the time to set out who will be held accountable for supporting and engaging in your DEI goals, and how they will do so. Setting up diversity committees is a popular way to ensure someone is being tasked with the implementation of the chosen initiatives.

Conclusion.

This is a sample of the work I am doing with CDOS, CEOS, and others on DEIB and its importance. It is simply a preview as we continue on the journey. Please follow my page for updates as we progress.