Diversity ROI in Small Doses: Move Beyond Excuses

When asked what CEOs want from their diversity organizations, study after study concludes that CEOs want to see the effect and return on investment of their diversity investments but receive only activity and satisfaction data. So, why aren’t diversity and inclusion executives, managers and practitioners measuring their effect and sharing with their CEOs?

Some of the leading reasons are the lack of resources, support from the CEO, funding and skills. My take: These are all just excuses because there are a number of resources, books and workshops available . It suggests that many diversity practitioners need a serious skill update or they should excuse themselves out of the job. If they remain without these skills, at some point, they may face elimination. Top executives are now demanding diversity ROI calculations from diversity departments where they were not required previously.

So, what factors prevent us from mastering diversity ROI? Here are a few excuses I hear that diversity practitioners say are consistently challenging and small doses of how to begin addressing them:

Issue 1: Lack of Skills and Orientation

Many diversity staff members neither understand ROI nor have the basic skills necessary to apply the process within their scope of responsibilities. Diversity ROI measurement and evaluation is not usually part of the preparation for the diversity job or taught as part of a university education focused on diversity. Also, the typical diversity training program or intervention does not focus on results but more on diversity awareness concepts, activities or other issues. Staff members attempt to measure results by measuring learning only instead of the full range of diversity performance intervention outcomes that drive business. Consequently, this is a tremendous barrier to implementation that must be changed such that the overall orientation, attitude and skills of the diversity staff member are focused on business results, impact and/or outcomes.

Small Dose 1: Build diversity ROI skills and measurement orientation: Don’t wait until you are asked about the ROI of your diversity intervention to gain skills and business acumen in this area — start learning about diversity ROI today. Attend a webinar, workshop or read books on diversity ROI.

Issue 2: Faulty Needs Assessment

Many existing diversity interventions are not based on an adequate needs assessment. Some diversity interventions have been implemented for the wrong reasons based on requests to chase a popular fad or trend in the industry. Even worse, they schedule training for everyone in the organization, which costs thousands or millions of dollars with no measurable diversity ROI. If the intervention is not needed, the benefits from the program will be minimal or wasted. A diversity ROI calculation for an unnecessary program will likely yield a negative value. This barrier can be eliminated by training and certifying diversity in programs such as the Hubbard Diversity ROI technologies, training measurement workshops, etc.

Small Dose 2: Learn the detailed steps to conduct a comprehensive needs assessment.

Needs analysis is the cornerstone of any diversity performance analysis effort. It provides you with appropriate justification for either developing or not developing your diversity intervention. You must conduct a needs analysis, no matter how abbreviated, before any diversity intervention takes place. The objectives of a needs analysis are to:
• Describe the exact nature of a performance discrepancy
• Determine the cause(s) of the discrepancy
• Recommend the appropriate solution(s)
• Describe the target population

Issue 3: Fear

Fear of failure appears in many ways. Designers, developers, facilitators and program owners may be concerned about the consequences of a negative diversity ROI. They fear that the measurement process will be a performance evaluation tool instead of a process improvement tool. Also, the diversity ROI process will stir up the traditional fear of change. This fear is often based on unrealistic assumptions and a lack of knowledge of the process.

Small Dose 3: Overcome fear by taking action.

The best way to overcome fear is by (a) taking action, (b) generating results, (c) evaluating the outcome and (d) implementing improvements. Fear is often based on a lack of knowledge, so the antidote is to learn and master the diversity ROI skills and processes.

Issue 4: Discipline and Planning

A successful diversity ROI evaluation implementation requires much planning and a disciplined approach to keep the process on track. Implementation schedules, evaluation targets, diversity ROI analysis plans, measurement and evaluation policies, and follow-up schedules are required. The diversity change management team may not have enough discipline and determination to stay on course. This becomes a barrier, particularly if there are no immediate pressures to measure the return. If the current senior management group is not requiring a diversity ROI evaluation, the diversity change management team may not allocate time for planning and coordination. Also, other pressures and priorities often eat into the time necessary for an effective diversity ROIevaluation implementation. Only carefully planned implementation efforts succeed.

Small Dose 4: Build diversity ROI discipline and planning focus.

There is no substitute for implementing a thorough approach to a diversity ROI evaluation process. It must be implemented using effective project planning and management skills as well as following the diversity ROI methodology according to each step in its design.

Issue 5: False Assumptions

Many diversity staff members have false assumptions about the process that keep them from attempting diversity ROI. Typical assumptions include: (a) the effect of intervention cannot be accurately calculated and (b) operating managers do not want to see the results of diversity expressed in monetary values. They won’t believe it, (c) if CEOs do not ask for the diversity ROI because they are not expecting it, (d) chief diversity officer denial — “I have a professional, competent staff. Therefore, I do not have to justify the effectiveness of our programs” — and (e) learning or this type of intervention is a complex but necessary activity. Therefore, it should not be subjected to an accountability process, etc.

Small Dose 5: Eliminate any false assumptions.

Let’s face it — the diversity ROI evaluation process and its associated analytics are here to stay. It’s only realistic that diversity practitioners eliminate any false assumptions, wishful thinking and/or outdated measurement paradigms. In the future, there is likely to be even more demands for diversity ROI analysis feedback, demonstrated credibility and intervention performance value that tie to the organization’s bottom line.

Using these processes has the added benefit of improving the effectiveness of all diversity interventions we conduct. Only those diversity practitioners who can operate as full strategic business partners will have what’s needed to survive for the long term. Do you have what it takes to survive, thrive and drive real business performance using diversity and inclusion?