Imagine it’s 3 p.m. on a Friday. Dana, the employee resource group (ERG) leader, gets good news: She’s been invited to give a presentation on the value of her ERG at her company’s next senior executive team meeting. At first, she’s elated. This is a great opportunity for her and her ERG. She starts to mull over all of her ERG’s activities. As she jots down notes, she becomes concerned that while they do a lot of things, it’s difficult to articulate the value those activities produce for the company.
Dana’s experience, while fictional, is common. According to Robert Rodriguez, president of DRR Advisors LLC, a management and diversity consulting firm, and author of Latino Talent, “While ERGs have grown in sophistication, the methods their leaders use to measure effectiveness, contributions and progress have not.” The problem is not that ERGs aren’t doing enough beyond their roots as “home and hearth” for underrepresented employees, but that they usually don’t organize their activities in close alignment with business needs. Or, they don’t establish metrics that enable them to convey what they’ve done or plan to do in a meaningful way.
ERG Focus and Metrics
This lack creates a challenge because, in the absence of full integration with multiple aspects of the business, “ERGs may be seen as clubs, rather than ways to build community, drive engagement and deliver business impact,” according to Renee Anderson, global head of diversity and inclusion at Novartis, a multinational pharmaceutical company. If ERG leaders want to have high-value impact, and they want recognition for their time and effort, they need to make sure they create value in a way that’s significant to their company by aligning to needs, and then create ways to easily communicate outcomes.
Many diversity practitioners within corporations, as well as consultants, have recognized this challenge and launched efforts to help ERG leaders address it. “Measure Employee Resource Groups to Yield Business Results,” an article published in October 2007 by the Society for Human Resource Management, explores in depth how ERG leaders can establish metrics to determine the value and impact their groups have on the larger business. Ask: In what specific and measurable ways does the group make the company more profitable? How does the network increase productivity by developing valuable skills in its members? How does the ERG impact talent attraction, engagement and retention?
Rodriguez took this line of study further with development of his ERG assessment system, the 4C Model, which organizes ERG activities into culture, communications, commerce and careers (Figure 1).
Rodriguez’s model recommends that diversity leaders also measure the positive impact ERGs have on their members’ careers. This is important because when group members see metrics that only focus on their impact on the business, but ignore benefits to them, they may feel used and unrewarded. The model recommends specific ways to drive value in each of four quadrants. For example:
• Culture: Education and awareness raising for non-ERG members in the company campus.
• Communications: Enhancing the company brand; creating opportunities for collaboration between the company and external groups.
• Commerce: Providing consumer/buyer insight; helping to penetrate new markets.
• Careers: Professional development for members; making members and ERG leaders visible to senior executives.
Arranged under the 4C model categories, here are a few examples of how some ERG leaders have driven and tracked value to specific stakeholder categories in a manner they can easily communicate.
• Enhance members’ careers. The concept of having a mastermind alliance was formally introduced by Napoleon Hill in his book, Think and Grow Rich. A mastermind group offers members a rich combination of peer brainstorming, idea sharing, accountability and support, all in a group setting designed to sharpen each member’s business and personal skills. Today, some refer to these groups as success circles, and ERGs are a perfect place from which to launch them.
Anderson offers an example of this type of group being formed at Novartis by members of the company’s Empowering Women to Impact Now ERG: “The success circle program creates groups of four to five peers from across functions that meet regularly to support each other in achieving goals and resolving business and leadership challenges.” Success circles provide participants with the opportunity and tools to practice key leadership skills such as coaching, giving feedback, presenting issues with clarity, problem solving, decision making, strategic thinking and reflection in a supportive and learning environment.
Mike Scannell, senior vice president and head of global inclusion at State Street Corp., a U.S.-based financial services holding company, said ERGs can act as development engines for their members. Scannell said an employee once told him that despite lacking formal leadership experience, “being part of a network has helped him build his leadership skills.” By launching efforts such as development circles within an ERG, as well as giving ERG members who are not in management roles the opportunity to practice and develop leadership skills, ERGs drive career value to their members.
ERGs also can create opportunities for high-potential members to gain exposure to senior executives. In addition to developing skills and having mentors, high potentials need sponsors to help them get to the next level. ERGs can create opportunities for members to connect with senior people who are in a position to sponsor them. “Our Women in Leadership ERG created an innovative developmental program for high-potential women in the field force by exposing them to senior leadership through a retreat that includes lessons on strategic thinking, facilitation and presentation skills and business acumen,” Anderson said. By tracking promotions and development for members participating in this type of program, ERGs can show their contributions to employee/member development.
• Support the company’s commercial interests. As the U.S. becomes more multicultural and diverse, some companies have a strong need to understand how their outreach efforts resonate with multiple audiences. ERGs within these companies support these efforts by acting as a source for in-house focus groups. Anderson said Novartis’ Network Indian Cultural Exchange (NICE) ERG has helped the sales and marketing groups shape the company’s outreach tactics.
“NICE participated in ride-alongs with sales representatives to provide insight into the needs of Indian customers and help shape and discuss best practices for engaging them. Based on the involvement by members of this ERG, sales and marketing groups improved their customer interactions through better understanding of cultural norms and nuances that helped patients be better served.” Letters of commendation from salespeople can be used as evidence of the value created in this area.
Novartis’ Russian Culture Club, founded by a member of its cardiovascular team who is a Russian-American, recognized an opportunity to approach this demographic group differently with regard to the company’s cardiovascular portfolio. Following conversations with other Russian-American employees, they proposed repackaging a direct-to-consumer TV advertisement aimed at the mass market for this demographic. It was re-filmed in Russian with different actors who were more demographically appropriate.
“The real insight we gained from our Russian-American associates was that the Russian-American population in the U.S. tends to watch certain television channels most frequently, allowing us to more directly target where the ads ran. The pilot was very successful and provided important insights that continue to inform our strategy,” Anderson said. Something as simple as comparing pre- and post-campaign repackaging sales results can demonstrate this ERG effort’s value.
• Increasing the company’s ability to create an inclusive culture. Some ERGs engage in external partnerships with professional membership organizations, and this can help an organization in a number of ways, such as expanding talent sources and increasing diversity within the corporate culture. One way State Street meets this need is by having its ERGs connect with external organizations. These connections can introduce potential candidates who feed diversity into the company’s talent pipeline. “At State Street our Latin-American Professionals network is connected to ALPFA, and our Black Professionals network is likewise connected to the National Association of Black Accountants,” Scannell said. “As with any talent pipeline, it’s important to note how these ERGs can help to introduce potential candidates to the organization.” Gathering new hire, promotion and related demographic data pre- and post-association can illustrate value.
• Help the company create a stronger internal community. ERGs often help build cross-function or cross-division bridges that promote a one-company, inclusive atmosphere as various elements of the company evolve. For example, Scannell said State Street’s ERG supports its mergers and acquisitions efforts by acting as a bridge into the company for employees in the companies the organization acquires, as well as assisting the HR team with new employee on-boarding. “The ERGs basically act as a welcoming committee for new employees,” Scannell said. Well-placed questions in an employee engagement survey can be used to assess the value from these ERG efforts.
ERGs Can Drive Measurable Business Value
According to John Magee, founder of cultureinfluencesbusiness.com, an organization that specializes in converting differences into assets, “Combining the inherent strengths of its members is the primary task of any human organization and therefore, in a global, multicultural company, that primary task becomes combining the inherent strengths of its multiple cultures within and across many national borders.” ERGs can help company leaders and employees weave an inclusive thread that binds disparate internal and external elements together into efficient and competitive processes that positively impact employees and the business.
By making use of tools such as the 4C model, ERG leaders can fine-tune their approach and focus on areas challenging organizations today in a way that creates measurable value — value they can proudly and confidently communicate while claiming the credit for their vital contributions to organizational effectiveness.
Joe Santana is senior director of diversity for Siemens USA. He can be reached at firstname.lastname@example.org.