SEVEN STEPS TO MEANINGFUL DIVERSITY AND INCLUSION METRICS

In the world of business, metrics hold a special place—and rightfully so. The legendary Peter Drucker is well cited for pointing out, "you can't manage what you can't measure." When it comes to this concept, the success of diversity and inclusion (D&I) programs is no different. To drive and guide a successful plan to diversify an organization or businesses group and make them more inclusive, we need to be able to measure our progress.

A lot of D&I practitioners may gleefully note that there is no lack of metrics in the diversity and inclusion space—but which will move the needle on performance? Recently, i4cp assembled a collection of some of the top D&I metrics used by high-performance organizations—those considered leaders in profitability, revenue, market share, and customer satisfaction over a five-year period. The metrics and models to apply them in various situations filled eight pages. They include the following (available on the i4cp website):

Yet, as full of valuable metrics as these resources are, they are not exhaustive. There are countless other  metric sources out there for tracking your D&I initiatives. For example, various governments and governing entities measure different factors to ensure compliance with race, gender and ethnicity regulations. Magazines, consulting companies, and a host of other groups use their own metric systems to determine who will get recognition awards and ascend to the top of their employer of choice lists. And due to the need to measure along custom criteria, a number of private companies have metrics they use to measure their own programs against their own internal benchmarks. But here is my caveat: As wonderful as this cornucopia of metrics may seem, only some—and maybe none of those listed here—is suitable for your use.

Here’s why. In order to guide and drive the progress you specifically want, the metrics you select must accurately map progress in areas relevant to what you are trying to achieve. Here’s an example of a misguided metric approach: You promise your business management team to drive your employee resource groups (ERG’s) towards creating greater business impact this year, but the metrics you select to govern success only track—and thereby encourage—steady growth in ERG membership. While potentially a good metric to have for other reasons, what you are measuring—and as a result driving—is the wrong thing. Success proven by this metric might earn you a useful nod from a magazine or consulting company’s vanity list, but it does nothing to guide or increase ERG business impact. In turn, this approach is unlikely to satisfy your true audiences or drive their expectations for results.

So what should you keep in mind as you select your metrics? Below are seven steps to help guide the process:

  1. First, figure out what you are trying to achieve and have a clear picture of the needles you need to move to consider your efforts successful.  “The first question to answer prior to investing in any program or initiative is, Why?,” says Patti Phillips, Ph.D., President and CEO of ROI Institute and Chair of i4cp’s People Analytics Board. “The answer lies in opportunities for the organization to make money, save money, avoid cost, or do some greater good. Diversity and inclusion initiatives are powerful drivers for the business, but only if they are aligned with the business. Identifying metrics that define “why” is the first step.” This approach is foundational for a high-performance D&I program.

    For example, let’s say that the turnover of female top performers in your organization is costing $1.5 million and/or there is a clear relationship between the company’s female market share and the decline in female top performers. That present you with a compelling problem. In this case, one of your clear objectives might be to increase women in management from 30% to 50%, while simultaneously closing the 5-point gap between male and female turnover by increasing female retention. While both of those goals should be tracked as they progress, the real key is to circle back to their impact on the identified $1.5 million in costs and declines in market share.
  2. Determine exactly where you need to make improvements in order to reach your objective. In the example above, this could include hiring, engagement, better bias management, factors uncovered through focus groups, etc.
  3. Identify the actions you need to take to make those improvements, but always keep one eye on the original business imperative that initiates the talent intervention.
  4. Identify the signposts that indicate you are going in the right direction toward meeting your goal. For example, continuously track increases of female hires, promotions to management, and narrowing of turnover gaps.
  5. Have a set plan to measure your progress that includes what data should be examined and with what frequency (e.g., interim progress reports on increases of females in management and comparative turnover reports).
  6. Use the metrics data collected to adjust or course correct your actions as needed, maintaining focus on your original goals and ultimate success in addressing the business imperative identified.
  7. Upon reaching your objectives, return to step one and repeat this process to set and pursue your next goal, or adjust as needed to sustain the current improvements.

I once heard a funny story about an older man on the street one dark and foggy night who was watching a younger man carefully scanning the ground around a lamppost. He approached the younger fellow—who was conducting his slow, circling search—and asked, ”Are you looking for something?” The young fellow quickly replied, “Yes, I lost my watch.” The older man asked, “Where did you lose it?” To which the young man replied while pointing, “About 100 to 150 feet over there by that dark gray building.” Puzzled, the older man asked, “So why are looking over here?” Without missing a beat, the young man replied, ” Because, the lighting is better.” 

Unless you are simply looking to attach window-dressing to your D&I programs, my advice to you is to avoid adopting metrics because they are easily available. If you really want to drive progress and business results, make sure you’re in the right place to measure those things that are worth measuring.