Diversity Scores: Rallying Behind Tallying

Assessing effectiveness is a business fundamental. Therefore, it should be no different for diversity and inclusion work.

When developing a set of measures, the right gauges will depend on the executive team’s decisions about organizational goals. Once those are established, diversity leaders can zero in on which actions and results to score.  

Generally, diversity and inclusion metrics may include any of the following:

Market share expansion

Corporate citizenship

Employee representation/retention

Fair hiring/promotions practices

Quality and speed of innovation

Innovation/productivity improvement

Supplier diversity

Customer satisfaction

Employer brand

Harassment-free environment

Business ROI

Executive involvement

Employee engagement

Year over year progress on any measure

For specialty industries, there may be additional measures, as companies that deal directly with the public often link inclusion goals to their strategic missions. For instance, medical and pharmaceutical companies might have targeted metrics to aid their efforts to reduce health care disparities between demographic groups. Or firms interested in energy conservation may work to minimize environmental injustice.

To begin, choose one or two areas where the company is already doing well or needs help. Then, choose three or four targets that will push the business to improve. Ensure each item is directly connected to one of the organization’s strategic priorities or core values — such as increased sales, corporate citizenship or becoming an employer of choice. Some of these items may lend themselves to quantitative metrics; others to qualitative measurement.

If “increased sales”are among the company’s top priorities, are sales leaders and staff required to develop cultural competence regarding newly targeted markets? If an insurance company wants to increase its number of Latino policyholders, then leaders, sellers and service personnel should study relevant cultural information, buying habits and other data associated with those potential customers.

Unless diversity work is directly linked to sales activities, it can be hard to demonstrate cause and effect. But it’s fairly easy to make a case that diversity initiatives do contribute to conditions that promote great customer service, create revenues or preserve profits. There are exceptions to this rule. Increased sales can and should be quantitatively measured in the following:

  • A sales team’s numeric goals have been set for expansion into certain neighborhoods or attracting new buyers from a certain demographic group.
  • Products or services have been created specifically for a targeted demographic.
  • The office of diversity and inclusion is itself a profit and loss center.

Some organizations have little respect for qualitative measures, or so-called soft measures, particularly in cultures with leaders who insist on hearing the business case for diversity. Not all hard measures have to be associated with revenue. Preserving profits and talent is just as important. Consider these metrics:

  • Employee engagement scores fell during the merger but went up by 40 percent after the town hall discussion about the difficulties of integrating two cultures.
  • Before launching the zero-tolerance initiative, grievance rates were 50 percent higher among LGBT associates than they are now.

Some measures represent process objectives. They infer actions to be taken or describe conditions to create. We will send representatives to the National Black MBA Association’s Conference,” or “We will run Spanish-language ads when recruiting in Texas.” Process measures describe work that must be done — but to what end? To clarify, link them to long-term desired business goals. It is legitimate to have both process and outcome goals, but do not confuse the two. Good process measures can be a subset of larger outcome targets: We are doing X (process) to get to Y (outcome).”

Partner with the business analytics group so that information and statistical processes have credibility. While pulling together the first snapshot of where the organization is, notice what systems and resources are or are not in place to make data collection easy and accurate, and strengthen weaker systems.

Implementing a diversity and inclusion scorecard should not come as a surprise. Announce plans to measure leader behavior and other aspects of organizational culture at least one fiscal quarter in advance so early adopters can make the required adjustments. Provide forums for discussion. Offer training for the expected skills. Review managerial results with departmental leaders throughout the year.

When people feel knowledgeable and supported, they engage in diversity and inclusion processes more willingly, and those behaviors are sustained with more concrete payoffs.