Improving Performance: The Active Diversity ROI Evaluation Ingredients

There are a huge number of diversity, inclusion and training approaches available in the marketplace. They usually try to lure you in by highlighting their ability to address a particular problem or issue the organization is facing and promise to provide you with the things you need to achieve your organizational goals. As a diversity executive, the real trick is finding the solutions that work consistently to drive sustainability! If you want to implement a solution that delivers a measurable ROI or non-financial impact, you must be able to access a decision framework that is effective and drives results. The proposed solution must be able to connect to the roots of your organization’s DNA. Rather than advocating one specific product or service, a strategy I have found worth considering is thinking about the “active ingredients” that constitute an effective diversity intervention – then you can locate the effective features in the measurement and analysis approach you are reviewing to ensure it meets your needs.

It is important to have as much detail as possible when specifying the requirements of a diversity solution. Many projects run into difficulty, misunderstandings and differences in expected outcomes because the requirements are not planned and well-documented. These issues are often outlined in a diversity project proposal or in the project’s scope documentation. Regardless of the way it is developed, the following items should be included to achieve the best chance for success. More importantly, the diversity professional and the evaluation project’s sponsor need to reach an agreement about these key issues to create a sound strategic partnership and build accountability for the result.

Ingredient 1: Does the solution include a diagnostic approach and analytical alignment tools?

I have long advocated that “diversity and inclusion” should not be seen as a mere theory, but should be used as a performance improvement technology with its own set of ROI-based analytics and process improvement sciences. Driving business performance improvement requires that you have a detailed understanding of the diversity ROI evaluation methodology and how it works. It begins with initial planning, and continues with the implementation of a comprehensive data collection and evaluation process. The initial planning and analysis step is critical for generating a successful intervention. Many diversity practitioners trying to develop effective business solutions find out after the fact that they should have spent more time planning the strategic linkage and alignment of the diversity initiatives that will drive the business challenges and opportunities they are trying to affect.

Ingredient 2: Does the solution have objectives that are behaviorally specific?

When it comes to diversity evaluation projects, there are two sets of objectives. First, there are the objectives for the diversity evaluation project itself, indicating specifically what will be accomplished and delivered through the evaluation process. The other objectives are called the diversity initiative objectives and focus on the goals of the actual diversity initiative that will ultimately add value to the organization.

Every diversity evaluation project should have a major project objective, and in most cases multiple objectives. The objectives should be as specific as possible and focused on the diversity evaluation. Sample project objectives may focus on the following outcomes:

  • Determine if the diversity initiative is accomplishing its objectives.
  • Identify the strengths and weaknesses in the diversity initiative.
  • Determine the benefit/cost ratio and ROI of the diversity initiative.
  • Identify who benefited the most and least from the diversity initiative.
  • Gather data to assist in pursuing future initiatives.

As the list illustrates, the objectives are broad in scope, outlining from an overall perspective what is to be accomplished. The details of timing, specifications and specific deliverables come later. The broad diversity evaluation project objectives are critical because they bring focus to the project quickly. They define the basic parameters of the project and are often the beginning points of a discussion with those involved in the project.

Ingredient 3: Does the proposed solution have a clearly defined scope?

The scope of the diversity evaluation project needs to be clearly defined. The scope can pinpoint key parameters addressed by the project. The following list shows typical scope issues that should be defined:

  • Target group for the evaluation.
  • Location of the target group.
  • Time frame for the evaluation.
  • Technology necessary to conduct the evaluation.
  • Access to stakeholders.
  • Product line(s) to cover.
  • Type of diversity process/activity/competencies being evaluated or improved.
  • Constraints on data collection.

Perhaps the project is limited to certain employee or demographic groups, a functional area of the business, a specific location, a unique type of strategy or a precise time frame. Sometimes there is a constraint on the type of data collected or access to certain individuals, such as particular customers in a targeted market segment. Whatever the scope involves, it needs to be clearly defined.

Ingredient 4: Is the timing clearly defined?

Timing is critical in showing specifically when the diversity intervention activities will occur. This means not only the timing of the delivery of the final diversity ROI study report but also the timing of particular steps and events – including when data are needed, analyzed and reported and when presentations are made. The following list shows typical scheduled activities:

  • Diversity initiatives or solutions developed.
  • Diversity initiatives implementation started.
  • Diversity initiatives implementation completed.
  • Start of the diversity ROI evaluation project.
  • Data collection design completed.
  • Evaluation design completed.
  • Data collection begins.
  • Data collection completed.
  • Specific data collection issues (for example, pilot testing, executive interviews).
  • Data analysis completed.
  • Preliminary results available.
  • Report developed.
  • Presentation to management.

Ingredient 5: Does the proposed solution spell out the specific diversity intervention deliverables?

This section describes exactly what the project sponsor or client will receive when the diversity intervention is completed in terms of improved competencies, reports, documents, systems and processes. Whatever the specific deliverables, they are clearly defined in this section. Most projects will have a final report, but they often go much further, delivering new skill sets, processes and suggested methodologies for improving the diversity process or business issues being addressed.

Ingredient 6: Does the proposed solution clearly utilize a proven sciences-based methodology and approach?

If a specific methodology is to be used for the diversity ROI intervention, it should be defined and state the scientific basis for its ability to obtain measurable results. A reference should be made to the appropriateness of the methodology, and how it will accomplish what is needed for the diversity initiative to be successful. This helps prevent initiatives that are merely fads that do not and cannot generate the desired outcome. Just because participants enjoy the intervention doesn’t mean you will have improved performance. It must be constructed with key ingredients to achieve its behaviorally stated objectives and measurable, evidence-based outcomes. A well-designed diversity intervention can produce both: an enjoyable process and measurable results.

Ingredient 7: Does the proposed solution have clearly defined steps?

The specific steps that will occur should be defined, showing key milestones. This provides a step-by-step understanding and tracking of the diversity evaluation project such that at any given time the project sponsor or client can see not only where progress is made, but also where the evaluation project is going next.

Ingredient 8: Does the proposed solution spell out the resources required?

This section should define specific resources required. This could include access to individuals, vendors, technology, equipment, facilities, competitors or customers. All resources that may be needed should be listed along with details regarding the timing and circumstances under which they will be needed.

Ingredient 9: Does the proposed solution highlight fully loaded costs and benefits?

The cost section details the specific costs tied to different steps of the intervention process. There is often reluctance to detail costs; however, it is important to understand the different steps of the process and their relative costs. This should also be linked to driving the organization’s strategic objectives and mission. When calculating the diversity return on investment for a diversity initiative, all costs are considered. This includes not only development and implementation costs but also the costs of evaluating the program.

Ingredient 10: Does the diversity intervention provide a causal chain of impact to demonstrate and isolate diversity’s contribution to the results versus other contributors?

Eventually a diversity initiative or intervention should lead to some level of impact on the organization’s business. In some situations, the diversity initiative is aimed at softer issues, such as improving the diverse workforce climate, employee satisfaction, diverse customer group satisfaction and diverse workgroup conflict reduction. In other situations, diversity initiatives are aimed at more tangible issues such as cost reductions, market share, revenue improvements, productivity and number of voluntary turnovers, all sorted by demographic group. Whatever the case, diversity initiatives and interventions should have multiple levels of objectives and must be able to demonstrate how the “specific diversity intervention” drove the improvement differences and results that were achieved. These levels of objectives, ranging from qualitative to quantitative, define precisely what will occur as a particular diversity initiative is implemented. These objectives are so critical that they need special attention in their development and use. The Hubbard Diversity ROI Model and seven-level chain of impact can assist you in generating diversity interventions with these characteristics.

Ingredient 11: Does the diversity intervention have a comprehensive data collection process?

Data collection is the most crucial step of the evaluation process because without data, there is no evidence of the initiative’s impact. During data collection, it is necessary to determine participants’ reactions and satisfaction to the diversity initiative (Level 1), their level of learning from the intervention (Level 2), the amount of application and implementation that happened as a consequence of the initiative (Level 3), the resulting business impact (Level 4), and whether the initiative generated benefits and a return on investment (Levels 5 and 6). It is necessary to collect data from at least levels 1-4 because of the chain of impact that must exist for a diversity initiative to be successfully applied and provide value.

To reap the benefits of the chain of impact, a key business problem that can be addressed by diversity must be identified. It also requires that participants experience a positive reaction to the initiative and its potential applications. They must acquire new knowledge or skills to perform at an improved level that is a direct result of the intervention. As application or implementation opportunities arise, there should be changes in their “on-the-job” behavior that result in a measurable, positive impact on the organization. The only way to know if the chain of impact has occurred is to collect data at all four levels. The diversity initiative will also generate benefits that are either quantitative or qualitative in the forms of benefit-to-cost, dollar return on investment and anecdotal impacts.

An effective diversity ROI-based evaluation initiative must be built on a comprehensive planning and data collection model that incorporates appropriate evaluation objectives and critical factual information. By utilizing these techniques to plan and collect data, your diversity intervention and evaluation studies will begin on a solid foundation that positions the initiative for improved performance and success!