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5 Things Organizations Can Do to Solve the DEI Challenge

Updated: Dec 17, 2022



 

Prof. Gary Fraser

Associate Dean of Diversity, Equity, and Inclusion and Professor at NYU Stern School of Business

HU-X Collaborator



 

For decades, many organizations in the United States have attempted to create a diverse environment that welcomes people who are underrepresented. Initially, this was with regard to gender and then race and ethnicity. Over time, other social identities such as an individual’s sexual orientation or their physical ability status were considered as well. While in most cases, these efforts were initiated in response to governmental laws and legislation, over time, diversity, equity, and inclusion (DEI) efforts have become ingrained as a way of operating for many organizations based on changing demographics and trends in our society.


However, these efforts usually have starts and stops, successes and failures, and a feeling of not accomplishing what was envisioned. Most, if not all organizations acknowledge they still have work to do. I have had many conversations with both corporate and non-profit organizations across a variety of industries, and I have yet to hear from one that claims to have figured out how to make their environment truly diverse, equitable and inclusive. Here are some of the top reasons why:


Not setting or evaluating metrics due to fear of legal challenges of having quotas

Most organizations succeed when they set goals and measure progress towards them. When there is a fear of goal-setting in an organization, it’s more difficult to celebrate milestones or accomplishments because no one knows what the original goal was. When the goal is to simply “further diversify,” without defining what is meant by diversification, there is usually a mixed reaction regarding success. A 2018 white paper published by Russell Reynolds, the international executive search firm, found that after surveying S&P 500 Chief Diversity Officers only 35% of those organizations measure demographic data (1). Simply put, you can’t achieve a goal if you don’t know your starting and finishing point.


Diversity is often regarded as a “nice to have” vs a “business imperative”

While there has been some improvement in most organizations compared to 50 years ago, many organizations struggle with a consistent balance of diversity, equity and inclusion. When some organizations seem to be gaining ground, in many cases they lose momentum. This could be driven by the loss of the Chief Diversity Officer to another organization, overall retention issues with populations that diversify the organization, or a decision not to continue to invest in diversification programs. The latter scenario (stopping or stalling the investment in diversification) is usually based on the investment as “nice to have” strategy versus a “business imperative” strategy. McKinsey & Co. has done research evaluating companies that were the most and least ethnically diverse and gender balanced within the same industry and found that the most diverse organizations financially out-performed the least diverse organizations by as much as 36% (2)! This indicates that organizations should consistently invest in diversification efforts, even in difficult financial times, since the investment may lead to better business performance – which makes the investment a business imperative.


Success is only based on input (new hires) versus retention, promotion, and inquiry

Most organizations typically have a strategy of hiring a diverse population into entry- level positions with the belief that and over time those individuals who help to diversify the organization will organically move up in the organization. Success oftentimes is related to the diversity of the new hires who may have just graduated from college or graduate school. Typically, organizations stop tracking what happens to the new groups that started together. Important questions are missing, such as: How many got promoted after 2 or 3 years? Do the demographics of those who got promoted first look the same as the hiring class? What about the demographics of those who have stayed with the organization versus those who left? Another question to ask is whether the same approach used with entry level hiring to diversify the organization is also used for experienced hires and more senior level positions?


Implicit/systemic bias prevents progress

It is estimated that as much as 85% of professional positions are gained through networking. As someone who used to run a graduate level career office, I can tell you we always recommended that our students incorporated networking as part of the job application and search process. Think about most of the positions you have had in your career, was there someone you knew, or got to know, that influenced your hiring decision? While the typical answer in most cases is “yes”, this doesn’t mean the process of networking is flawed, but it does mean it has bias. Most of our networks are relatively homogeneous, meaning they look like us and have similar experiences. This impacts who we hire, promote, and eventually retain in an organization. If you are wondering if your personal network is relatively homogeneous take a look at your LinkedIn network. From what you can tell from the information provided by your contacts, does it match the demographics of the geographic area you operate your business? Your customer base?


If any, or all, of these reasons impact your organization, here are the 5 things an organization can do to solve their diversity, equity, and inclusion challenge:

1. Setting the right organizational intention

Intention-setting relates to what an organization envisions for itself. With regard to diversity, equity, and inclusion, there needs to be an organizational mindset away from DEI as “the right thing to do” to “the right thing to do to make our organization better.” This shifts the strategy, decision-making, and execution because it moves goals from optional to expected. This mindset allows organizations to look at every step in the human resource process rather than just hiring, similar to the way a manufacturing company looks at every step of the production process. This also allows metrics and other factors that are typically used in program and process evaluation to come into play.

2. Recognize that most organizations have systemic bias

Until organizations recognize that there is systemic bias present with an effort to eliminate it, true sustainable progress cannot be made. A perfect example of this is how most organizations recruit new hires. Typically, they choose a set of colleges and universities based on past hiring success, the number of alumni in the organization, or measures of selectivity. The problem with these approaches is that they all lead to bias in the organization without factoring in if that set of institutions will deliver the gender, race, or ethnic diversity that is needed to further diversify the organization. This is just one example of systemic bias. Many organizations have implicit bias training or diversity and inclusion workshops to help address this. The main problem with this approach is that it sends the message that one or two workshops can eliminate these issues when in reality DEI efforts should be seen as an ongoing process and journey that everyone participates in. This leads to the next point:

3. Establish that DEI is everyone’s responsibility in an organization

Many organizations rely on their Chief Diversity Officer to drive the strategy and execution of their DEI effort. While this sounds like the right approach, it’s rare when a CDO has a full team or operating unit reporting to them to execute against any strategy that is created. It’s commonplace for many DEI leaders in organizations to suffer from burnout due to lack of human capital and other resources like an adequate budget, and most importantly, a community approach to DEI. For an organization to truly succeed in DEI, it has to be a collective effort where everyone plays a role.

4. Change the mindset from “Culture Fit” to “Culture Enhance”

Culture Fit” is an overused term in most organizations. It is typically used to indicate that someone should be brought into an organization without really explaining specifically why. The other problem with a “culture fit” mindset is that everyone has their own personal definition of what that term means. Does someone fit the culture because they are creative, funny, or intellectual? Or is it because they went to the same school, or grew up in a similar area as other employees? Can “culture fit” be determined after spending 30 minutes interviewing someone? Moreover, the term “culture fit” also assumes that a culture is perfect and doesn’t need to grow or improve. I always suggest that organizations evaluate candidates on their ability to enhance a culture. A “culture enhance” mindset most likely will bring in new ideas based on individuals having different lived experiences and ways of identifying.

5. Grow individual and organizational Intercultural Competence

Intercultural competence is the ability to understand and adapt to all the different ways we may identify socially. This includes gender identity, race, ethnicity, nationality, religious beliefs, sexual orientation, as well as socio-economic status, body size and type, and ability status and many other areas. Typically, if we have not been exposed to some aspect of diversity, we don’t make the effort to explore these differences in a way that we can become “competent’’ in understanding critical nuances. All organizations should approach the effort to grow intercultural competence as a community effort. This means rather than creating affinity groups for the sole purpose of supporting its members, affinity groups are also asked to help educate those who may be different. If an organization creates an expectation that its members invest in each other and learn about what makes us unique and different, it will build community in a much stronger, and sustainable way. All organizations should approach the effort to grow intercultural competence as a community effort.


So, what’s the ultimate real benefit of these five approaches to DEI? A stronger sense of belonging between all members of an organization, versus only some. This type of inclusive environment can lead to better retention and perhaps increased productivity. Another important benefit is a feeling of psychological safety – defined as mutual respect and trust among team members. This can lead to better performing and more efficient work teams. These are just two of the many benefits of taking a very different approach to how DEI is currently managed in organizations.


I am happy to collaborate with HU-X because we collectively have the capability to help companies figure out how they can move toward a more sustainable approach to diversity, equity, and inclusion and make the work experience a human experience for all.

  1. A Leader’s Guide: Finding and Keeping Your Next Chief Diversity Officer, Russell Reynolds Associates (2018)

  2. Diversity Wins, McKinsey & Co. (2019)


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