Are your company’s Diversity, Equity and Inclusion actions working?
Ask yourself, are your company’s Diversity, Equity and Inclusion actions working? Really working? Have you seen exponential leadership growth for women, people of color and other under-represented groups in your organization? Do you get excited when you compare your numbers from 10 years ago to today? My guess is, if yours is like most companies, DEI gets a lot of lip service and very little action. It’s time to reframe your DEI efforts.
Make no mistake, every company agrees that “DEI is important to our company’s success.” For the most part, the business case for diversity has been taught and accepted as a crucial piece of a winning strategy in the marketplace. In fact, some companies have been working diligently at it for years! They even have a web page featuring a diverse cross-section of happy people touting how well it works. But what results do they have to show? I’m talking about real, tangible business results. When a millennial or Gen Z recruit clicks on your company’s Leadership tab, chances are high that they will see a bunch of older, white, male faces looking back at them. This is not only discouraging, but it’s also hurting your company’s chances of reaching its long-term business goals.
One Step Forward, Two Steps Back
If you think I’m wrong, look no further than the Women in the Workplace 2022 report from LeanIn.org and McKinsey & Company. Not only have women failed to advance since the report was launched in 2015, but in many companies, the number of women in the pipeline and in leadership positions has actually moved backward. Why?
Simply put, women are hired into roughly 50 percent of all entry-level positions. Then, as they move up, their numbers start to shrink within the organization, a phenomenon known as the broken rung. The leaky pipeline begins with a woman’s very first job.
For every 100 men promoted from entry-level to manager positions, only 87 women are promoted and only 82 women of color are promoted. As a result, men significantly outnumber women at the manager level, and women never catch up, creating the pipeline crisis. The study also found that women at all levels are walking away. Some are pursuing opportunities at other companies, others are starting their own companies and some women are opting out of the workforce entirely.
What Makes Women Walk Away?
Three key areas contribute to the departures. These are things that happen over and over again in a woman’s career, their effects building up over time until she leaves your company for what she hopes will be greener pastures elsewhere.
- Harassment and microaggressions
- Having their judgment questioned
- Being mistaken for someone junior
For the most part, these roadblocks are actually very easily fixed within your organization with awareness and a commitment from leadership. And the payoff of having women stay engaged and committed to your company is huge. Why wouldn’t you tackle them?
Finally, the study noted that women early in their careers are committed and ambitious and when they see senior women leaving an organization, they are prepared to do the same.
The Talent Pipeline Remains Unchanged
Here is what the talent pipeline looked like in 2022:
The very bad news is, this graphic is relatively unchanged since 2015 when McKinsey started tracking the data.
If I sound angry, I am! I’ve done this work for almost 20 years, and I’m shocked that leaders continue to accept failure and fail to hold managers accountable when it comes to fixing the pipeline of talent, especially when hiring and retaining talent is so critical to business success right now. We know where the choke points are. They haven’t changed. So continuing to have this problem means that either your DEI efforts aren’t working or your leadership really doesn’t care.
I actually think it’s a combination of both. And the truth is, most companies do not track their results in a meaningful quantitative way as they would any other business element. Therefore, no achievable goals are set, there is no accountability in the system and no one holds anyone accountable. Finally, very few companies are willing to share their DE&I results publicly. It’s a vicious circle.
Diversity Fatigue is Real
Most companies have been at DE&I for many, many years. This has led to a general belief that there is Diversity Fatigue in most companies. Of course there is diversity fatigue! We’ve been talking about DE&I for 20 years, and we are not seeing any progress. This is not acceptable in any other business goal we tackle. If it were anything else, we’d say, “If it’s not working, fix it!”
Now, for all of the DEI practitioners out there — many of whom are my closest friends — I’m not trying to put you out of a job. I believe in this work wholeheartedly. It is important. However, I know that, like me, many of you are frustrated, and you want to see more action taken. No one wants to work hard for an important goal and see no progress — that’s like banging your head against the wall. My recommendation is to reframe and overhaul DE&I, not abolish it.
It’s Time to Reframe DEI with RTE&A
I have heard lots of different stories and analogies regarding Diversity, Equity and Inclusion. A simple one I like is Diversity is about the mix, Inclusion is about making the mix work and Equity is ensuring that everyone “in-the-mix” is treated fairly. The problem is that this definition lacks tangible metrics that companies are willing to track, measure and discuss. Setting metrics and holding people accountable to them are what makes the dream work!
Replace Diversity with Representation
We must track, set goals around and measure Representation. Take a look at the LeanIn/McKinsey chart and compare it to your organization. What does your company look like when you cut by job grade, race and gender? Just look at where you are today — it’s that simple. Publish your numbers and hold leaders accountable for moving them in a positive direction. You don’t have to mandate “women in 50 percent of roles,” but you can set goals to move more women forward, fix choke points and track your progress over time.
You must also do this at a Divisional Level. This shines a spotlight on who is actually working hard to advance under-represented groups and who isn’t. By taking this cut, you now know which leaders are embracing this work and which ones are giving it lip service.
Replace Equity with Transparency
To begin to have true Equity, companies must tell the truth. This means publishing your data in your annual report. Publish your representation goals and who is being promoted and who is being left behind. Publish your pay equity analysis annually. In the past, companies have been afraid to be transparent. But it begs the question, “How are we going to progress if we don’t know where we are?”
The day is coming when more governments will mandate this kind of transparency. So far, about a dozen states and municipalities have mandated salary transparency laws, including California, Colorado, Washington and New York City. Companies in the jurisdictions are generally required to post salary ranges indicating the minimum and maximum pay. But more importantly, millennials and Gen Z expect it. Unlike previous generations, these two groups openly discuss the salaries they are making. And these are the groups that contain your best talent and potential for future business growth. Senior leadership needs to be reaching them with a representation message that allows them to see themselves leading the company one day.
Smart companies are already demonstrating Transparency. Today there are a handful of companies leading the way. To benchmark your progress and gather ideas, review Deliotte’s Transparency report.
Replace Inclusion with Engagement
Many companies are already doing engagement surveys. The problem is that they are not using the information correctly. If you want to measure Inclusion, find out who is Engaged and who is not. Most companies fail to cut their scores by gender, race and tenure. So, what you get is basically a homogenized number, which in most companies is driven by the engagement level of white men.
If you cut the numbers, you can determine which groups have the lowest Engagement (these are probably the people who are least included). Once you know, again, you can cut this at a Divisional level and hold people accountable for improving engagement.
Adding a new letter “A”
The rationale for reframing DE&I is simple. It is to make people accountable for results, just as we do in every other aspect of business.
A is for Accountability. The No. 1 problem with the current definition of DE&I is that there is little to no accountability built into the model. Very few companies or leaders are held accountable for any meaningful change.
It’s Not a Journey
I’m tired of people saying their company is on a Diversity Journey. Journey is a soft, non-tangible word that does not belong in business. I was in sales for 20 years, and I never went on a “sales journey.” If I didn’t hit my targets and goals, I was fired. It’s that simple.
A journey also implies meandering movement without a clear goal or an endpoint. You can’t get somewhere if you don’t know where you’re going.
We must commit to publishing diversity goals. We must put tangible measures and SMART diversity goals into the Performance Management process. We need to hold leaders accountable for tangible results, and we must be completely transparent in our efforts.
It is both that simple and that hard. It is time for Representation, Transparency, Engagement and Accountability to replace DE&I. Once we set these tangible initiatives in place, then we can implement training programs on managing inclusion, leveraging differences and Allyship. But we have to fix the basics first, and it begins with setting a brand-new paradigm.
This requires one more “A” on your part – you must take Action today!
Related article: Advancing Women Is Not A Journey. It Demands Strategy.