A New Era of Diversity: From Compliance to Business Impact
The year 2009 has been a watershed year for diversity issues in the U.S. From the inauguration of President Barack Obama in January to the Supreme Court decision in Ricci v. DeStefano, diversity issues have consistently been top of mind for corporations this year.
Given the changing landscape and rising interest among i4cp member companies, we adopted a comprehensive strategy to investigate organizations' diversity approaches, one that includes benchmarking practices, extensive interviews and literature reviews.
In April of this year, a group of such companies met in Atlanta to form a Diversity Accelerator group. This group brainstormed the challenges their organizations were having in approaching diversity. Based on the discussion and interviews with these members, i4cp developed a survey instrument to further explore these issues.
i4cp also interviewed a number of non-member companies to get a better understanding of the state of organizational diversity issues. Overall, the community of diversity professionals has been extremely generous with its time and insight. As a preview of upcoming reports, here is a quick look at two of the highlights.
Non-HR professionals are leading more corporate diversity efforts
Based on interviews, having professionals from outside the HR function lead diversity initiatives is a growing trend. We spoke with professionals who started their careers in sales, communications, labor relations, and marketing as well as the more traditional HR, compliance and legal functions.
For the non-HR leaders, there were several common themes. For one thing, this work is much harder than they anticipated but also more rewarding. The challenge comes in two forms: pace and building a common understanding. Leaders who have spent the majority of their careers within the business find the pace of diversity progress painfully slow and frustrating. They clearly see the benefits of diversity initiatives and the value such initiatives can bring to their organization, but they have come to recognize that showing business results can be elusive and people metrics such as representation move slowly. The reward is playing an integral role in changing the culture, complexion and impact of the organization.
Another theme from this group is that they tend to recognize the importance of consistently and constantly framing diversity issues in a business-relevant context. They’re convinced that this approach leads to credibility, which leads to adoption and action.
One executive relayed the following story and advice. She was interviewing for a head of diversity position at another firm. After three interviews over a 13-month period, she asked the decision-maker point blank, "Is there something about my experience or credentials that is making you hesitate in making a decision to extend an offer?" The decision-maker welcomed the frank question and assured the candidate it was not her experience or expertise that was at issue but a desire to make sure that the candidate understood the organization’s values and history and would be a good fit for the organization.
With this new understanding, the candidate talked herself out of the job but offered the following advice to the would-be employer: If that is the issue, then you need to find an internal champion. It is easier to develop the diversity expertise than to understand the organizational nuances, she advised. "By selecting an internal candidate, you will find a ‘diversity convert’ to be both credible and highly effective," she said. This advice is potentially applicable to all organizations as a mechanism to get traction and achieve diversity goals.
Employee Resource Groups, or affinity groups, have become more common and effective
Employee Resource Groups (ERGs) - also known as Employee Networks or affinity groups - are corporate-sponsored associations that are united by the fact that members tend to share a similar attribute or interest. While open to all employees, traditionally ERGs were created around racial/ethnic or gender characteristics. Unfortunately, they developed a reputation of being mostly social in nature, and in some organizations they became viewed as a negative influence. These have been difficult legacies to overcome.
Today, the trend in ERGs is to diversify. For example, there are now groups associated with working parents, people with disabilities, veterans, new employees, and people from the same generation. They join the more traditional ERGs centered on issues such as gender, ethnicity, and sexual orientation. Another trend is for these groups to become more focused on business and career issues rather than social issues. Many have been transformed into business-relevant, action-oriented networks.
At financial services firm ING, an i4cp member company, the dollars spent to support the ERGs are achieving some of the highest return on investment of any people program investments, according to Laurin Cathey, head of multicultural affairs. ING has been recognized in many arenas for its work with ERGs, even winning the Catalyst Award in 2007. At ING, ERGs are critical to employee and leadership development. Each of the five ERGs is a branded unit that supports the ING external brand and the internal employee value proposition. Every unit has an executive sponsor, by-laws, elected officials and succession plans.
ERG participants and leaders benefit in various ways, including:
i4cp's 4-Part Recommendation:
Given the changing landscape and rising interest among i4cp member companies, we adopted a comprehensive strategy to investigate organizations' diversity approaches, one that includes benchmarking practices, extensive interviews and literature reviews.
In April of this year, a group of such companies met in Atlanta to form a Diversity Accelerator group. This group brainstormed the challenges their organizations were having in approaching diversity. Based on the discussion and interviews with these members, i4cp developed a survey instrument to further explore these issues.
i4cp also interviewed a number of non-member companies to get a better understanding of the state of organizational diversity issues. Overall, the community of diversity professionals has been extremely generous with its time and insight. As a preview of upcoming reports, here is a quick look at two of the highlights.
Non-HR professionals are leading more corporate diversity efforts
Based on interviews, having professionals from outside the HR function lead diversity initiatives is a growing trend. We spoke with professionals who started their careers in sales, communications, labor relations, and marketing as well as the more traditional HR, compliance and legal functions.
For the non-HR leaders, there were several common themes. For one thing, this work is much harder than they anticipated but also more rewarding. The challenge comes in two forms: pace and building a common understanding. Leaders who have spent the majority of their careers within the business find the pace of diversity progress painfully slow and frustrating. They clearly see the benefits of diversity initiatives and the value such initiatives can bring to their organization, but they have come to recognize that showing business results can be elusive and people metrics such as representation move slowly. The reward is playing an integral role in changing the culture, complexion and impact of the organization.
Another theme from this group is that they tend to recognize the importance of consistently and constantly framing diversity issues in a business-relevant context. They’re convinced that this approach leads to credibility, which leads to adoption and action.
One executive relayed the following story and advice. She was interviewing for a head of diversity position at another firm. After three interviews over a 13-month period, she asked the decision-maker point blank, "Is there something about my experience or credentials that is making you hesitate in making a decision to extend an offer?" The decision-maker welcomed the frank question and assured the candidate it was not her experience or expertise that was at issue but a desire to make sure that the candidate understood the organization’s values and history and would be a good fit for the organization.
With this new understanding, the candidate talked herself out of the job but offered the following advice to the would-be employer: If that is the issue, then you need to find an internal champion. It is easier to develop the diversity expertise than to understand the organizational nuances, she advised. "By selecting an internal candidate, you will find a ‘diversity convert’ to be both credible and highly effective," she said. This advice is potentially applicable to all organizations as a mechanism to get traction and achieve diversity goals.
Employee Resource Groups, or affinity groups, have become more common and effective
Employee Resource Groups (ERGs) - also known as Employee Networks or affinity groups - are corporate-sponsored associations that are united by the fact that members tend to share a similar attribute or interest. While open to all employees, traditionally ERGs were created around racial/ethnic or gender characteristics. Unfortunately, they developed a reputation of being mostly social in nature, and in some organizations they became viewed as a negative influence. These have been difficult legacies to overcome.
Today, the trend in ERGs is to diversify. For example, there are now groups associated with working parents, people with disabilities, veterans, new employees, and people from the same generation. They join the more traditional ERGs centered on issues such as gender, ethnicity, and sexual orientation. Another trend is for these groups to become more focused on business and career issues rather than social issues. Many have been transformed into business-relevant, action-oriented networks.
At financial services firm ING, an i4cp member company, the dollars spent to support the ERGs are achieving some of the highest return on investment of any people program investments, according to Laurin Cathey, head of multicultural affairs. ING has been recognized in many arenas for its work with ERGs, even winning the Catalyst Award in 2007. At ING, ERGs are critical to employee and leadership development. Each of the five ERGs is a branded unit that supports the ING external brand and the internal employee value proposition. Every unit has an executive sponsor, by-laws, elected officials and succession plans.
ERG participants and leaders benefit in various ways, including:
- getting exposure to the ING leadership team
- building annual business plans and budgets for their organizations
- getting a chance to develop leadership skills in relatively low-risk environments
- having added opportunities to demonstrate their ambition and develop skills
- supporting ING’s external outreach and community development.
i4cp's 4-Part Recommendation:
- Understand and articulate the business purposes for diversity. Although the legal and ethical reasons for diversity should not receive short shrift, it often helps to know how diversity can be leveraged in areas such as marketing, sales, innovation and strategy.
- Audit business processes and communications to ensure alignment with diversity realities. Organizations can quickly get a reputation of merely providing lip service for diversity unless their actions support their rhetoric. It is important for diversity to be perceived as "how we do business" rather than "on top of everything else."
- Seek out internal business advocates and recognize their efforts in supporting the overall diversity strategy. Also, recognize managers who attract, select and develop diverse staff.
- Where and when it makes sense, tap into the talent available in ERGs. These networks can have a positive impact on the business as a whole.