By Donald Fan, Sr. Diversity Director & Inclusion, Walmart
The challenge: Corporate America has been struggling in achieving sustainable progress in diversity, equity, inclusion (DEI) at workplace for decades.
The approach: Adopt futuristic thinking, growth mindset, innovative approaches, a DEI ecosystem, and agility to well-position today’s workforce for new challenges in the digital era.
The impact: DEI transformation contributes to outperforming competition and propelling business success in the disruptive digital world.
We all witness this dilemma that after so many years of committed efforts, corporate America is still facing stagnant progress, racial/gender discrimination, DEI fatigue, apathy, and disparity at the workplace, whereas majority of us believe DEI helps close the division, accelerate innovation, advance performance, and becomes a critical driving force to win in the digital era.
A recent research study, conducted by economists from University of Chicago and Stanford University, indicates that less than one fifth of C-suite executives at large publicly traded U.S. companies are women, only twentyfour of the CEOs at Fortune 500 companies are women, and only three are black. According to McKinsey, white women hold only 19% of C-Suite positions, while women of color only hold 4% of them. When Indra Nooyi retired from PepsiCo last year and Geisha Williams left PG&E, the list lost both the only Indian woman and Latina Fortune 500 leader in one fell swoop. There are no African American women leading a Fortune 500 company currently.
The same study by economists from University of Chicago and Stanford University also concludes that 50 years of economic history proves that inclusive workplaces make us all richer. The researchers estimate that if access to education was fully equal across groups and discrimination was to disappear, U.S. GDP per capita would grow by another 15 to 20 percent, making everyone better off.
That is where DEI efforts can contribute to the big picture. The puzzle here is HOW. As diversity, equity, inclusion (DEI) executives and practitioners, we keep asking ourselves 1) what are the major barriers that prevent us from achieving sustainable DEI progress in corporate America, and 2) how can we renovate the traditional DEI toolbox and make it relevant and current to this fast-changing world.
By adopting the Theory of Algorithms, a conceptual framework for solving a range of problems, this article attempts to identify some blocks and contemplate how we can revisit DEI in vision, strategy, and practice, to unleash its full power to drive business success.
- Define a Futuristic Vision: Drive a Culture Change, Not Play a Numbers Game
Philosophically, we must affirmatively answer this worthwhile question: Is DEI a compliance-based number game or a culture change that engages and includes everyone to attain equality and justice? The reality is that many companies have been pivoting on compliancebased diversity because it is driven by the historical context and government regulation through legal means.
Historically, diversity originated from government initiatives. With the Civil Rights Acts of 1964, it became illegal for businesses to practice discriminatory hiring or firing practices. This focus on the moral obligation to address the impact of traditional discrimination led to affirmative action programs that were introduced in the 1970s. Now companies in the U.S. with more than 100 employees are required to report their diversity data to the Equal Employment Opportunity Commission on an annual basis. If diversity is imposed through regulation and compliance, corporations tend to direct their attention to number chases.
The length of CEO tenure can impact DEI. According to a recent Equilar study, the median tenure of CEOs at largecap (S&P 500) companies was only five years. The frequent senior executive shifts negatively disrupt the continuum of corporate DEI efforts. An inclusive culture will stop this phenomenon because culture tells us what to do when the CEO is not in the room. We depend on committed CEOs for the sustainable DEI success by embedding DEI into the culture.
Diversity without equity and inclusion will not attract and retain diverse talent, get them fully engaged, foster innovation, or lead to business growth. That is why we witness the common “leaking bucket” pitfall with women and people of color (POC) talent. We must transition our focus on addressing the root – nurturing an inclusive culture and inclusive leadership to sustain diversity.
Compared to data-driven diversity tracking and reporting, fostering an inclusive culture is much harder to accomplish. It calls for an unwavering commitment, strategic planning, intentional actions, and unwavering grit. It takes all functions and levels within the organization to work collaboratively for a mindset and behavior change. DEI must be owned by every employee from individual contributors through the CEO and C-Suite.
How to course correct:
• Obtain a strong commitment from the CEO and C-suite executives. The tone and message from the very top are determining factors for DEI success.
• Craft a narrative helps leaders articulate why DEI is a culture journey with shared interests. That requires everyone’s participation, rather than a silo call from the Chief Diversity Officer and Office of Diversity.
• Include the qualitative measures in the DEI scorecard that track the employees’ perception and experience of inclusion, such as an inclusion index (measuring the sense of belonging, uniqueness, and fairness) and a culture index (measuring the alignment between the employees’ experience and the corporate values practiced in the workplace).
• Transition DEI ownership to business areas and support business leaders with consultancy, expertise, resource, and tools. Hold business leaders accountable for advancing DEI, such as tying the DEI goals to their compensation and performance evaluation.
• Nurture an open environment to welcome and seek different voices, opinion and perspectives, in the meantime creating a compelling group identity that leads to greater cooperation and collective intelligence. The social neuroscientist Jay Van Bavel indicates in his research that diverse teams benefit the most from having a group identity. They can use their different insights to solve a problem together, without the conflict that normally would come from that.
- Design a Sustainable Strategy: Adopt Growth Choice, Not Margin Choice
The marginal choice eyes on the short-term needs and aims for incremental change. When the diversity numbers go down, the company strengthens its recruiting efforts to “buy” diversity. Marginal thinking leads to failure of achieving a culture change, continuous improvement, and sustainable progress. Whereas, growth choice invests in “growing” diversity in the incumbent workforce through purposeful development and eco-system that supports and advances diverse talent. Growth mindset helps transform “know-it-all” to “learn-it-all” as promoted by Microsoft’s CEO Satya Nadella; futuristic thinking that opens the door to non-stop advancement.
In the volatile and complex digital age, DEI becomes the strategic imperative and competitive differentiator. While advanced technology and new opportunities can accelerate business growth, there is no substitute for people. The innovation, new knowledge, soft skills, and agile nature that are wired into our human DNA will help us successfully navigate a rapidly changing marketplace. This long-term growth mentality will unleash the full potential of diverse talent and energize the company around agility, innovative thinking and continuous improvement.
To activate the growth choice, we must have a clear vision and map out a blueprint on what to achieve, where to bet, and how to win.
How to win the game:
• Form a DEI Executive Council to lead the journey, set objectives, connect all the touch points, and provide direction. Leverage their clout to invite and engage more leaders and employees to champion DEI efforts.
• Conduct prescriptive, descriptive and predictive analysis with leading and lagging indicators to better understand the DEI history, lessons learned, current challenges, and set up stretching goals for the future of work.
• Increase transparency of DEI data by granting access to business leaders. Leverage DEI data to uncover WHAT (issues that stand in the way), use insight and intelligence to explain WHY (root cause), and commit to HOW (SMART decisions to tackle the issues).
• Regularly converse with business leaders. Use Bayes’ theory to update our beliefs when we encounter new evidence and theories that conflict with what we already know. Validate pre-existing beliefs, while reviewing new evidence (data), by asking if the new evidence confirms our beliefs or if alternatives exist that better explain the challenges we are facing. Then focus on an action plan to tackle current missing links.
• Create an accountability system with explicit measures to gauge the progress on a regular basis. Neuroscience and psychological studies have demonstrated that it is not enough have evidence (DEI data) as an ace card. It takes a common motivation and shared purpose to move the needles.
• Link DEI with outcomes that matter to business leaders to secure buy-in and ownership.
• Convey the consistent message through all communication channels. Articulate the narrative at every possible venue and business meeting.
- Execute with Agility: Pivot on a Holistic Ecosystem, Not Standalone Programs
While conversing with Dr. Frank Dobbin, co-author of the Harvard Business Review article “Why Diversity Programs Fail”, we discussed the research findings based on three decades’ data from more than 800 U.S. companies and hundreds of line managers’ and executives’ interviews. Dr. Dobbin pointed out “It shouldn’t be surprising that most diversity programs aren’t increasing diversity. Despite a few new bells and whistles, courtesy of big data, companies are basically doubling down on the same approaches they’ve used since the 1960s—which often make things worse, not better. Companies have long relied on diversity training to reduce bias on the job, hiring tests and performance ratings to limit it in recruitment and promotions, and grievance systems to give employees a way to challenge managers. Those tools are designed to pre-empt lawsuits by policing managers’ thoughts and actions.” I agree many of today’s DEI programs are developed with the one-size-fits-all approach, mandatory requirement, or the command and control style. They are more based on fixing others’ beliefs. Because they do not aim to touch people’s heart and nudge for behavior change, they are doomed to fail from the start.
We know that standalone DEI programs and raising awareness do not change people’s mindset and behavior. Take the unconscious bias training as an example, Dr. Brian Nosek, professor of psychology at the University of Virginia, indicates in his study of reviewing the state of evidence for implicit bias and implications pursuing effective strategies for DEI: “There is little evidence supporting the effectiveness of implicit bias training in improving diversity and inclusion.”
To close the gap between the conventional wisdom and effective outcome, we must rethink and redesign DEI programs by propelling mindset and behavior change, growing curiosity, and teaching management with ways to solve complex problems in the digital age. Purposefully establish an ecosystem where every programmatic effort builds on the success of previous ones. And more importantly, we need to integrate DEI into the talent lifecycle through the well thought-through policy, process, procedure, and practice.
How to bend the curve:
• Utilize design thinking, offer resourceful and supportive platforms that attract, motivate and retain a large base of employees, rather than standalone start-stop programs. Some examples include a mentoring/sponsorship platform with well-curated content and discussion guides, an ERG/BRG platform with executive support, a system of development with well-targeted learning and upskilling opportunities, and a social media platform where employees can share their stories, ideas, and experiences.
• Adopt an agile approach, develop and distribute action-based tool (minimum viable product) to help managers advocate DEI and make better decisions. For example, craft a de-bias card for each talent decision scenario (hiring, talent review, promotion, performance evaluation, succession planning) with implicit bias callouts, standard procedure reminder, and strategy to mitigate the bias.
• Create more immersive learning opportunities to encourage everyone to learn from people with different backgrounds to better understand their experience, and point of view. Leverage movie, social incident, historic site visit, TED talk and other resources to drive open and honest conversations in the team. Sarah Cliffe, editorial director at the Harvard Business Review, advised in her article “Race at Work” that educating ourselves about others’ experience is the first step to help close the racial equity gap in the workplace.
• Instead of pushing a mandatory DEI training, provide an education curriculum and menu for employees to choose and pull based on their personalized need. This approach helps reduce the sense of imposing and elevate a sense of ownership and relevance.
• Teach inclusive leadership (characteristics, competencies, behaviors), including how to role-model it dayin-day-out and how to lead a diverse team effectively and efficiently.
• Make DEI an integral part of every business and people decision, rather than an afterthought. Ensure we have the process and procedure in place to make it real. The goal of this effort is to infuse DEI as part of the DNA of our business.
To sum up, all the recommendations and lessons learned can be categorized into the four DEI success factors:
- Strong leadership commitment and role-model from the top
- Design thinking and new approaches relevant to today’s business challenges and employees’ career aspiration in the digital era
- Accountability with game-changing indicators that drive sustainable progress
- Broad engagement cross functions and levels to co-own and co-lead DEI journey
To leverage DEI to propel the bottom lines of planet, people, profit today and tomorrow, we must re-think and revisit the conventional wisdom and so-called best practices adopted in the past. We must constantly explore and experiment new ways of thinking and working.
We can achieve that goal because we believe in what we do, and our collective commitment and efforts will get us there.