Building a Financial Performance Mindset

As competitive pressures and globalization become more prevalent, measuring diversity ROI becomes a critical requirement. The ABCs for measuring diversity’s ROI contribution can be demonstrated using a six-step diversity contribution model developed by Hubbard & Hubbard. It creates a 30,000-foot view of diversity as a dollars and cents issue. To illustrate the use of the model, consider the following scenario:

You have a meeting with your senior leadership team to talk about the organization’s diversity initiatives. Recently, you attended a diversity ROI workshop and learned a financial approach to get management’s attention. There are five prerequisites and six steps. The prerequisites are:

1. Review your organization’s definition of diversity, its values and vision statements.
2. Understand how your organization does business and makes money. What keeps your senior leadership team up at night? What problems can diversity help them solve?
3. Ask participants to recall issues they have had to handle recently.
4. Review the steps of the diversity management contribution model.
5. Bring a calculator.

Once the prerequisites are complete, you are ready to implement the diversity contribution model approach. Start your presentation by explaining its purpose, briefly reviewing the organization’s vision, values and diversity definition. Present examples of diversity and its application to performance.

Next, ask the group to list the types of business and people issues they addressed in the last few weeks. Summarize the list by examining links to the diversity definition and values statement.

Next, ask the group, “What real or perceived diversity-related barriers seem to get in the way of employees doing their absolute personal best work?” Next, connect them to the stated vision, values and operational processes of the organization.

Finally, ask: “What percentage of an average eight-hour day is not spent on sales, marketing, production or mission-critical work due to real or perceived barriers in the workplace?” Gather percentages from the audience. Take the lowest percent and complete the following six steps.
Insert the percentage into the calculation’s first step. For the sake of this example, I will use 25 percent as my figure, with an average wage of $12 per hour, and a 5,000-person organization. To annualize the number, I will use 260 workdays in the year.

By the time you reach step six, the senior leadership team will be talking about diversity management in financial terms.