Creating value by applying effective inclusion metrics is a framework for success that empowers leaders to better understand and manage their firm’s most valuable asset — their people.
When an organization’s values are in alignment with their “people brand promise,” value is created via brand equity, which can be used to drive sustainable competitive advantage and superior financial performance.
Inclusion is the invisible thread that ties the elements of an organization’s culture together. Inclusiveness, or using the information, tools, skills, insights and other talents that each individual has to offer, often results in measurable, mutual benefit and gain for all. It also provides everyone with opportunities to contribute their thoughts, ideas and concerns. If present, inclusiveness results in people feeling valued and respected. When applied effectively, it can increase engagement, improve products and service delivery, and enhance financial performance.Therefore, it makes sense that programs promoting inclusion have a measurable effect on an organization’s bottom line and on workforce productivity.
How can a diversity executive report to the CEO or board of directors that the organization is now 5 percent more inclusive than the year before and quantify what effect that statement has on the bottom line? In the absence of direct measures, it’s often necessary to rely on indirect observations to determine goals achievement. Metrics such as engagement scores, retention rates, productivity measures and diversity representation at various tiers often must be combined to create a broader picture of an inclusion strategy’s impact on the overall organizational culture.
To effectively create an evidence-based measure of inclusion, use a multifaceted approach. There are several prerequisites to craft the process. To measure inclusion, diversity executives should:
1) Review the current definition and drivers behind an organization’s inclusion initiative. Make sure they describe the desired cultural effect as well as the employee behaviors required to achieve desired results. Establish a definition for inclusion that spells out some measurable elements and is understood across the entire organization to maintain focus and help develop metrics.
2) Align the organization’s inclusion definition and drivers with strategic goals. If the organization needs to improve its talent pipeline, weave inclusion initiatives into existing talent management functions. If increasing innovation is critical, promote inclusion programs that will facilitate knowledge sharing. Both of these goals may require raising awareness of the employment brand by competing to become an employer of choice.
3) Formally measure initiative impact to ensure programs are having an effect. Select or develop metrics that circle back to, or align with, the original drivers. By carefully articulating outcomes, organizations can define measures that assess the effect of their inclusion strategy. For a concept as ephemeral as inclusion, multiple qualitative, quantitative, effectiveness and efficiency metrics may be required to imply success or indicate the need for a course change.
To measure the return on investment for inclusion, the definition of inclusion at work must be crafted in behaviorally specific terms that are measurable. This aligns your work to show the “chain-of-impact” that links the change to your initiative’s outcomes.
A critical aspect of inclusion is to explore whether employees feel they are being included and respected in the organization, and if not, to what degree are they excluded. In addition, it would be vital to collect specific examples regarding what contributions are not being utilized and the consequences and cost for this lack of inclusion. As a result, inclusion ROI values can be generated in dollars and cents to illustrate the cost and effect of poor inclusion practices.
Once effective solutions are in place to create a truly inclusive work environment, diversity executives could report to the CEO or board of directors that the organization has actually generated a 5 percent more inclusive environment than the year before and quantify what effect that statement has on the bottom line with greater confidence and credibility.