Whether your organization is a leader or a laggard in Diversity, Equity and Inclusion is a reflection of how you benchmark against other companies, but also and more importantly, it’s a direct reflection on how your culture is experienced by your own employees.
How your leaders perceive your organization to be doing at inclusiveness is not an accurate indication of how well you are doing. Leaders are nearly twice as likely as their employees to believe they are creating empowering and inclusive environments. Korn Ferry would only qualify 5% of leaders globally as inclusive leaders. In a 14 country study, Catalyst found that 3/4 of employees felt their organization’s racial equity practices were not genuine. When DEI is perceived as performative, you lack trust and credibility in your leadership and culture.
Meanwhile, a Harvard Business Review Analytic Services Report found that only 1/3 of employees rate their organization as ‘very successful’ at cultivating an organization that is diverse, equitable and inclusive. But for those organizations that stand out as DEI leaders in creating an inclusive culture, two critical factors make the difference: “a commitment from leadership and a commitment to data.”
DEI Success Starts at the Top
Without senior leadership visibly steering DEI, your organization will be spinning wheels. DEI is not a human resources silo. It’s a core business function that permeates your organization. It requires broader executive prioritization and participation. The importance of executive leadership in fostering an inclusive environment cannot be overstated.
Also, a lack of executive leadership commitment drastically diminishes the impact of everything else you try to do - that and a lack of representation at senior leadership level are the biggest inhibitors to inclusive culture. According to HBR Data Analytics, 50% of respondents from DEI laggards say a lack of leadership commitment hinders their DEI efforts. Among DEI leader companies, it’s only 5%.
When DEI is wholeheartedly held up as a strategic priority by executive leadership, it both grounds and magnifies advancement towards an inclusive culture. This means top inclusive leaders are committing intentionally, actionably and measurably - and underpinning that commitment with frequent communication, transparency and accountability.
Among DEI Leaders:
- Executive Leaders are Held Accountable: Among DEI leaders, the CEO is as likely to be held accountable for meeting DEI objectives as the HR head (71 & 73%), with accountability happening throughout leadership ranks, too. In DEI laggards, the CEO is far less likely to be held accountable than HR (44% vs 64%). DEI laggards suffer from a lack of DEI accountability is not the case for DEI leaders (57% vs 19%).
- Executive Support is Visible: Over 3/4 of respondents in DEI leader organizations say that executive support is visible for improving DEI, compared to only 1/3 of people among DEI laggards.
- Executive Communication and Commitment is Consistent: Executives among DEI leaders are twice as likely as those at DEI laggards to regularly communicate the value of DEI (73% vs 38%). Not surprisingly, DEI Leaders are over 4x more likely than DEI Laggards to have a culture that consistently supports DEI (75% vs 18%). When the CEO sets the strategy and communicates DEI progress frequently, an organization is 6.3 times more likely to have a diverse leadership team and more likely to be an industry segment leader.
- Goals are More Often Set for Leadership Diversity: 72% of people in DEI laggards indicate that a lack of diversity at leadership level is holding the organization back. DEI leaders are more than twice as likely as laggards to be setting goals for levels of diversity among senior leaders and board members (44% vs 17%).
Beyond being a reflection of DEI leadership, companies in the top quartile of gender diversity and of racial and ethnic diversity in the executive teams are more likely to outperform on profitability than companies in the bottom quartile of each (by 25% and 36%, respectively).
If greater visible diversity at executive level is one of your goals, moving the needle first requires the commitment to intentional action from your executive leaders, regardless of their race or gender.
Support your DEI Program with the Right Data
Building a DEI program without executive leadership is like spinning your wheels; addressing DEI without good data is flying blind. DEI leaders focus on being data-rich and strategically well-informed in the continuous navigation of DEI strategy.
As with all core business functions, what you value, you measure.
So an essential component of, and complement to, executive commitment is regularly monitoring DEI metrics - to establish benchmarks, identify issues, create focused strategies, gauge progress, communicate to stakeholders and improve approaches, all underpinned by accountability.
Among DEI Leaders:
- DEI Data is Broader and More Granular: DEI leaders are over twice as likely as DEI laggards to track all three aspects of diversity, equity and inclusion (70% vs 30%). They are also far more likely to track diversity metrics across more categories - such as hiring (82% vs 57%), recruitment (75% vs 51%), retention (56% vs 28%), development opportunities (45% vs 10%), compensation (41% vs 17%).
- Data tracks Diversity, Equity and Inclusion: Going beyond diversity, DEI leaders are more likely to track employees’ experiences of different aspects of the workplace. DEI leaders are more likely than DEI laggards to track equity measures such as equitable support from leadership (56% vs 11%), participation in training (54% vs 19%), compensation (53% vs 26%), promotions (48% vs 16%), recognition and praise (43% vs 11%) and other comprehensive measures. Meanwhile, almost half of DEI laggards do not track inclusion metrics at all.
- Progress is Tracked More Frequently: Generally, just under half of DEI respondents measure progress towards diversity goals once or twice a year. But among DEI leaders, 45% measure quarterly and 18% measure monthly. DEI data dashboards equip leaders to understand trends and issues.
- DEI Data is Shared With Employees More: When it comes to sharing DEI data, what stands out the most is that DEI leaders are twice as likely as DEI laggards to share their DEI metrics with all employees (47% vs 24%), increasing transparency, commitment and accountability.
- Tracking DEI Data is Delivering Results: 2/3 of DEI leaders who track both equity and inclusion have seen improvements in both equity and inclusion over just two years, while only 1/4 of DEI Laggards saw improvements in either.
- DEI Data Experts Are Making a Difference: DEI leaders aren’t more likely to have employed a third party data expert (40% general), but they are three times as likely to report they have benefited from doing so - particularly in improving measuring and tracking of DEI, as well as developing DEI strategies and accelerating progress on DEI goals.
Up level Your Organization Towards DEI Leader Status
At Pulsely, we’ve witnessed these two critical factors of DEI leaders are intertwined. There can be a chicken and egg dynamic around top leadership commitment and DEI data. The right DEI data approach will compel your executive leadership to immerse in discussions about the challenges and rewards of DEI. On the other hand, leadership commitment is often a prerequisite to get the resources for obtaining the right data. We understand and balance that chicken-egg dilemma in our approach.
Remember that data alone will not make your organization a leader in DEI. It is not just about collecting data. It is critical to find the story in the data that reveals actionable insights about your diversity, equity and inclusion status. Most importantly, it is essential to present that data in a way that resonates with leaders, builds their commitment to DEI, and compels them to action.
It’s a simple formula to accelerate your organization towards becoming a credible DEI leader: committed leadership and compelling data. It’s our expertise to work to help you achieve both. Ready to level up your organization?