5. Rewire the system to rewire behaviors
Training is the most popular solution to increase workforce diversity. Research shows that nearly one-half of the midsize companies in the United States mandate diversity training, as do nearly all the Fortune 500. Not surprisingly, the effectiveness of diversity training has come under scrutiny, with some claiming a positive impact (increased diversity representation), while others are dismissive (citing backlash and even activation of stereotypes).
Diversity training programs come in many shapes and sizes: educational vs. experiential, voluntary vs. mandatory, inspirational vs. shaming. At its best (voluntary, experiential, inspiring, and practical), training raises awareness, surfaces previously unspoken beliefs, and creates a shared language to discuss diversity and inclusion on a day-to-day basis. These objectives are a positive and important first step in the change journey.
However, when it comes to behavior change, training is often only a scene-setter. The more complete story is that, to change people’s behavior organizations need to adjust the system.
Why? First, biases can only be reduced rather than completely eliminated, and it is difficult to control biases that are unconscious. Second, biases can be embedded into the system of work itself, causing suboptimal diversity outcomes. Strategies to rewire the system make it easier to tackle biases and create a more comprehensive and sustainable solution.
There are four steps to system rewiring:
- Using data to pinpoint leaks in the talent lifecycle. To do this, organizations can look at the profile of their employees from recruitment to retirement, coupled with data on inclusion experiences.
- Identifying and remodeling vulnerable moments along the talent lifecycle. These are points within specific talent processes where decision-makers are more susceptible to bias: for example, when decisions are discretionary and not subject to review.
- Introducing positive behavioral nudges, such as altering the default setting. In 2013, telecommunications firm Telstra introduced “All Roles Flex,” which made flexibility the starting point for all jobs rather than a special arrangement for some.
- Tracking the impact. Periodically review diversity and inclusion data to assess the effectiveness of changes made.
When the BMO Financial Group, one of the 10 largest banks in North America, introduced an initiative based on these steps along with a communications and education campaign, it achieved significant impact. First, a record 83.5 percent of people managers voluntarily completed the initiative’s learning module within the first few months of its launch, signifying the program’s value. Second, there was an unprecedented year-over-year increase in employees’ perceptions of inclusion (+2 percent) and of having a “voice” at work (+2 percent). In addition, the hiring rates of minority group candidates increased by 3 percent in 12 months.
The truth is, rewiring the system is equally, if not more, important than retraining behaviors.
6. Tangible goals make ambitions real
When it comes to diversity and inclusion, nothing ignites greater debate than goals, targets, and quotas. On the one hand, the setting of specific diversity goals has been found to be one of the most effective methods for increasing the representation of women and other minority groups. On the other hand, contentious arguments about targets vs. quotas, accusations of reverse discrimination, and fears of incentivizing the wrong behaviors have arisen around goal-setting efforts.
Our view is that tangible goals are important. (By goals, we mean measurable objectives set by an organization at its own discretion, as distinct from dogmatic quotas.) However, their impact is tied to four conditions: communication, coverage, accountability, and reinforcement.
First, leaders should be capable of communicating confidently about what tangible goals do and do not mean. As Andrew Stevens, former managing director of IBM Australia and New Zealand, observes: “[Goals] don’t guarantee a woman a job or promotion. What they do is to increase the probability that a talented woman will be considered alongside a talented man.” This is done by prompting decision-makers to cast a wider search for candidates beyond their default comfort pool of talent.
Second, tangible goals should incorporate measures of inclusion, not just diversity. If diversity is the only metric, the organization misses half the story. Leading organizations know this. The financial firm Westpac, for example, not only measures diversity outcomes, but also uses the annual employee survey to test whether individual “people leaders” are committed to the creation of a diverse-thinking workplace. In the United States, facilities and food management firm Sodexo includes a diversity and inclusion competency in its performance management process, and 40 percent of a manager’s scorecard is devoted to inclusive behaviors.
Third, tangible goals can only work when key decision-makers are accountable. By taking accountability for goals, leaders signal the importance of diversity and inclusion as a business priority and help focus people’s attention.
There has been an overemphasis on diversity, and an underemphasis on inclusion, as well as on the broader ecosystem of accountability, recognition, and rewards. The truth is, without appropriately crafted tangible goals, ambitions are merely ephemeral wishes.
Finally, tangible goals are most effective when combined with broader acts of recognition and reward. This powerful truth sits behind the success of global initiatives such as MARC (Men Advocating Real Change), the 30% Club, the CEO Action for Diversity & Inclusion, and MCC (Male Champions of Change)—each of which implicitly recognizes the seniority and influence of its members. Conversely, there is embarrassment when leaders are called out for their organization’s poor diversity and inclusion track record.
Our view is that tangible goals have often been bluntly crafted and poorly communicated. There has been an overemphasis on diversity and an underemphasis on inclusion, as well as on the broader ecosystem of accountability, recognition, and rewards. The truth is, without appropriately crafted tangible goals, ambitions are merely ephemeral wishes.
7. Match the inside and the outside
In 2015, Samsung launched its “Hearing Hands” commercial. Built around a day in the life of Muharrem, a hearing-impaired man, it revealed a new world in which Muharrem’s neighbors engage with him for the first time in sign language, allowing him to feel much more connected to his community. In 2017, TV2 Denmark launched its “All that we share” campaign with a commercial that starts with the physical separation of people into line-drawn boxes based on stereotypical differences, and ends with a single larger group who now understands their shared points of commonality. That same year, Nike ran a commercial entitled “Equality,” which promoted the message that if diverse athletes can be equal on the playing field, they “can be equal anywhere” because “worth outshines color.”
Each of these commercials went viral: 19 million views for Samsung, 4.5 million views for TV2 Denmark, and 5 million views for Nike. The question of why they were like cups of water spilled on dry earth underscores two compelling points.
First, customer diversity and inclusion have often been largely overlooked, with the lion’s share of attention devoted to employee diversity. And when customer segmentation is considered, it is more in terms of a customer’s financial profile than who customers are as people. As a consequence, services and products often reflect a stereotypical view of the customer. Lloyds Banking Group’s 2016 review of British advertising found that many minority groups were underrepresented in advertising, and only 47 percent felt that they were accurately portrayed. Similarly, Deloitte research from 2017 revealed that up to 1 in 2 customers from minority groups felt that their customer needs were often unmet over the past 12 months.
Second, customers are becoming, and starting to lean into, a sense of empowerment; they communicate what they stand for with their wallets and social media shares, and messages of equality have a pervasive appeal. Deloitte’s 2017 research found that up to one-half of customers had been influenced to make a purchasing decision in the past 12 months because of an organization’s support for equality—whether around issues of marriage equality, gender, disability, age, or culture. The purchasers did not come only from the groups directly targeted by the message (such as the hearing-impaired in the Samsung campaign); they included anyone who felt that the message of equality had spoken to their personal values.
The truth is that while many organizations have prioritized workplace diversity over customer diversity, both are equally important to business success. Moreover, customers are often more ready to support diversity and inclusion than organizations perhaps realize. But a word of caution: This is not about vacuous marketing. Commercials that lack authenticity will be shamed by the very customers they seek to attract.
8. Perform a culture reset, not a tick-the-box program
Our final truth is the most sweeping and underpins all seven truths above: Most organizations will need to transform their cultures to become fully inclusive. While an overwhelming majority of organizations (71 percent) aspire to have an “inclusive” culture in the future, survey results have found that actual maturity levels are very low.
What prevents the translation of these intentions into meaningful progress? Our experience suggests that organizations frequently underestimate the depth of the change required, adopting a compliance-oriented or programmatic approach to diversity and inclusion. For most organizations, change requires a culture reset.