I am often asked, are diversity key performance indicators as relevant for higher education as they are for the private sector? My answer is always a definite yes. In some ways, these metrics are even more important since recruiting and retaining scarce resources such as diverse faculty members from key demographic groups can be even more challenging and harder to replace.
Interest in diversity and the return-on-investment associated with it is increasing. Diversity return on investment for higher education is no different. Several issues are driving this increased interest and its application to a wide range of diversity-related issues in higher education. Pressures from the board of trustees, donors and others to show the institution is well-run and cost-effective are probably the most influential drivers. Competitive economic pressures are causing intense scrutiny of all expenditures, including all diversity-related costs. In addition, diversity professionals in higher education know they must begin to show how the diversity process is linked to the bottom line in hard numbers. In short, they must calculate and report their diversity ROI.
Value-creating activities are not captured in the tangible, fixed assets of the institution. Instead, value rests in the ideas of people (intellectual capital) scattered throughout the institution, in faculty, staff, student and supplier relationships, in databases of key information, and cultures of inclusion, innovation and quality. Traditional financial measures were designed to compare previous periods based on internal standards of performance. These metrics are generally not helpful in providing early indications of quality or diverse workforce problems or opportunities. They tend to give us information about what happened “after the fact.”
Financial measures provide an excellent review of past performance and events in the institution. They represent a coherent articulation and summary of activities of the organization in prior periods. However, this detailed financial view has no predictive power for the future. As we all know, and experience has shown, great financial results in one month, quarter or even year are in no way indicative of future financial performance. In a diverse, competitive, global world, organizations cannot operate on financials alone. Having predictive power for the future is essential, which requires both “lead” and “lag” indicators of institutional performance.
Many institutions of higher learning have inspiring visions and compelling strategies, but are often unable to use those beautifully crafted words to align faculty, staff, student and community actions with the institution’s strategic direction. However, applying a balanced scorecard approach to its measurement strategy allows the institution to translate its vision and strategies by providing a new framework, one that tells the story of the institution’s strategy through the objectives and measures chosen. Rather than focusing on financial control devices that provide little in the way of guidance for long-term decision-making, the scorecard uses measurement as a new language to describe the key elements in the achievement of the strategy. These key measurement dimensions in an institution’s scorecard are called perspectives.
A sample list of perspectives I recommend for a balanced diversity scorecard in higher education include:
• Access perspective.
• Retention perspective.
• Excellence perspective.
• Faculty productivity perspective.
• Education effectiveness perspective.
• Financial impact perspective.
• Community partnership perspective.
Institutions of higher learning often find themselves competing for scarce resources, and in many cases it is the institutions that can demonstrate the most scorecard progress that have their budgets renewed or revitalized. In addition, these institutions must show their level of effectiveness and efficiency to sustain accreditation. Creating a workforce climate of faculty, staff, student and community diversity and inclusiveness helps drive institutional effectiveness and innovation. Showing progress against these outcomes requires a set of return on investment-focused analytics and measures that clearly highlight the actions taken and outcomes achieved.
Sample measures I often recommend for these perspectives include:
• Number or percentage of student-led conversions by group from partnerships.
• Year over year reduction in turnover of faculty (tenure track and non-tenure track).
• Number or percentage of student favorable response regarding usefulness of their education six months, one year and two years after job placement.
• Year over year increase in enrollments by group.
It is essential to show the link between the effective utilization of diversity and inclusion change processes and the ultimate success of the institution operating in a global multicultural society. If the institution is to take its job of educating the next generation of leaders seriously, it can ill-afford to utilize an operation and performance approach that has no connection to the diverse world in which we live. Each key performance indicator and metric used to show progress must be rooted in demonstrating effective recruitment, retention and use of diverse talent (faculty, staff, students and community members) and other resources.
How well do your higher education metrics measure up? What are some of the greatest challenges you face? Let us hear from you. We will highlight potential solutions in this blog.