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By Barbara Frankel
At a recent benchmarking debrief of a company new to the process, the CEO and senior executives were quite surprised to realize how far behind they were. This company was a Stage One company without clearly defined diversity goals or best practices. The organization had recently bought benchmarking for the first time and this was its initial debrief, which was presented to its CEO and a 15-member executive committee. The CEO was very authoritarian and everyone in the room assessed his reaction before they asked or answered a question.
The information presented here was entirely new to him—and rather shocking. He thought the organization, which has a great deal of gender and racial diversity at the lower levels, was a diversity leader. As the benchmarking data demonstrated the comparative lack of diversity at management levels, especially at the top, he became appalled. At first, he doubted the veracity of the data, insisting there had to be more diversity at the top.
"Look around the room," I pointed out (politely). Indeed, the only non-white person in the room, out of 17 people, was an adviser who had been asked to help out.
He nodded his head. He got it. And so did everyone else in the room.
While this company has a handful of employee groups, they are not used for recruitment, retention, talent development or cultural competence with customers. The results of this—and their lack of a mentoring program—show up very dramatically. While Blacks, Latinos and Asians are more than 25 percent of their workforce, they are only 4 percent of their managers, and there are no Latinos and almost no Asians at the top two levels of this organization.
The CEO, who was leading the conversation, asked me numerous questions about ERGs at other companies and the results they had received. The organization also had never instituted formal mentoring with a cross-cultural component. He reviewed the best practices of other organizations that had done this—and the results in management promotions and retention—and had a rather dramatic reaction.
"We're going to make some changes and we're going to start with mentoring first," he announced, standing up and addressing the entire room. I was very impressed with how decisive he was and how quickly he grasped the importance of the subject matter to his business goals.
As I left the debrief much later than scheduled—to catch a plane for the next debrief—three of the executives ran up to me in the hall. They (all diversity proponents) were literally jumping for joy over his reaction. His interest and excitement, they said, was beyond what they had anticipated and would ensure that change really happened.
This "CEO Commitment"—as we call it in the DiversityInc Top 50 survey—isn't platitudes and photo ops. It's the real difference in moving the needle in a highly competitive arena (for talent, customers and suppliers). These two CEOs were very different leaders in very different cultures. But they both "got it" during the debrief and they both are ensuring that their organizations take the next steps. We will be there to help them, but if the CEO hadn't heard—and understood—the message, this progress wouldn't happen.
Read the first part of this article: Benchmarking With 2 CEOs
The Stages of Diversity Management
DiversityInc has been studying the four stages of diversity management for more than a decade. Most companies are in the first two stages, with companies that earn spots on the upper portions of The DiversityInc Top 50 Companies for Diversity list in Stage Three. We don't yet know any companies that are in Stage Four but a handful of very innovative companies are poised to break through to that stage.
Stage One: Celebration Focused
The company has begun to recognize the value of diversity and begins to have celebrations, such as Black History Month and Cinco de Mayo day in the cafeteria. The danger for these companies is in raising expectations with no corresponding gain in opportunities. They have a high level of regrettable loss (loss of talent, particularly from traditionally underrepresented groups) that could have been developed. They also have increasing difficulty in recruiting people from these groups and all younger people, who want a more inclusive environment, according to Pew Research reports.
Stage Two: Workforce Focused
The company has created a diversity plan—with actions, objectives and milestones. It has begun to show gains in the diversity of its workforce and has implemented employee-resource groups and, often, a structured mentoring program. The company now has a competitive advantage—with talent and reaching customers/clients—over competitors still in Stage One.
Stage Three: Marketplace Focused
The organization has metrics-driven accountability for its diversity-management efforts, often through its executive diversity council. Its human-capital and supplier-diversity metrics are well above average and it assesses and communicates clearly the value diversity management is bringing to the organization. The company exhibits cutting-edge diversity-management initiatives, such as innovative work/life programs that aid in retention and talent development, or clear linking of supplier-diversity efforts to community building. It is outpacing its competitors in reaching and developing talent and creating marketplace solutions. These companies outpace their competitors in raising cultural competency in marketing and sales efforts.
Stage Four: Out-Thinking Competition
These companies leverage diversity management to create, sponsor and nurture innovation. They provide thought-leadership and integrate cultural competency in all they do, from recruiting to customer service.
