Grads of Life directors share and analyze strategies employers can utilize to ensure their DEI efforts are tied to measurable goals and outcomes.
Despite the significant increase in investments and commitments related to diversity, equity and inclusion in the last few years, many companies still don’t tie any of their DEI efforts to measurable goals and outcomes. When it comes to DEI, companies often struggle to integrate these three key components: efforts, goals, and outcomes. Some of the country’s biggest companies do publish outcomes data, typically related to workforce representation, in addition to a list of their efforts. But absent an intentional effort to unite all three key parts of the equation, DEI initiatives are vulnerable to looking more like window dressing, and less like real business decisions that lead to measurable change.
In every other area of business, it is standard fare to talk about how activities lead to outcomes, and how those outcomes stack up against goals. For example, a company might announce: We invested $10 million in new market research and saw a net return of $20 million in new sales, compared to our goal of $20 million. Because the company clearly defined its goal – and measured its outcome against that goal – they can be confident their new market research program led to a successful outcome. And what if the company’s goal was $40 million in new sales? Equipped with the knowledge that their efforts produced only half the anticipated revenue, they may decide to shift its strategy and try something different.
Going forward, we encourage you to ask yourself: how can we begin to bring some of the same foundational principles and rigor embedded in the rest of our business over to our DEI practice? In other words, how can we treat DEI like a core business strategy? Luckily, we need not start from scratch. There are several employers who have already begun to figure this out, and we can learn from their leadership.
First, set out a clear and actionable DEI ambition: What does DEI mean to your business? What are your specific goals? Bank of America, for example, set a very clear ambition for their efforts in consumer banking, including the Pathways program: “Ensure our workforce matches the communities in which we operate.” One technology company we recently worked with at Grads of Life had a DEI ambition to develop a product team that was focused on the experience of Black customers; to do so, they needed to diversify their own workforce. A third company has seen a major issue in retention and promotion outcomes for people of color within their organization, leading to a significant lack of diverse leaders and a gap in representation. Their primary goal is to fix the so-called “leaky bucket” to build a strong internal pipeline of diverse leaders who stay and grow in the company.
Next, determine what key performance indicators would demonstrate that you have achieved this ambition? How much would the retention rate need to improve for Black managers? How much would feelings of inclusion and belonging in certain units need to increase? What would representation look like at each level of leadership? KPIs can also go beyond the four walls of your company. If you can, work to establish KPIs that represent a true, comprehensive look at impact: impact to the employee, impact to the business, and impact to society. Many companies have begun to transparently share KPIs and changes in race and gender representation across levels (see Walmart, Intel, and Bank of America) and we applaud their leadership.
Finally, structure efforts to directly link to KPIs and the broader ambition as you would with any other comprehensive strategy. For instance, if you have an ambition of diversifying leadership, link the specific efforts of external recruiting, internal career pipeline building, sponsorship and mentorship, manager and leadership accountability, etc. directly to this goal, instead of listing these as disconnected efforts that exist across the company. Understanding how the components of your strategy reinforce each other ensures that those initiatives are linked directly to strategy and outcomes. While no company is running a full randomized controlled trial on the impact of these efforts, there is still salient and critical evaluation of effect and impact that companies can make.
We are seeing a trend to increase transparency in DEI data – but data showing current state and a laundry list of efforts does not tell a compelling story. Increasingly, stakeholders—investors, talent, even customers—will be asking for more. We expect this shift to link efforts and outcomes and to meaningfully tie DEI to business strategy to be the next major horizon.