DE&I Misalignment: When 'Strategic Priorities' are not Strategic enough.

Introduction:

The joint paper by Harvard Business Review Analytic Services and SHRM provides essential insights for strategic-ally minded DE&I advocates.

Through a comparison of organisations as either DE&I leaders, followers, or laggards, the HBRAS paper clearly demonstrates the importance of executive support, actionable measurement, and accountability for DE&I success. The paper also reinforces the economic benefits of DE&I and addresses growing stakeholder inclusive expectations. Unfortunately, the research shows that many organisations are failing to track equity and diversity metrics. Furthermore, only a limited number of companies share any DE&I metrics with the Board. As such, there is clear evidence of a substantial differential between organisational and functional definitions of what constitutes strategic priorities. Likewise, DE&I actors appear to accept leadership support without inclusion nor accountability at the group strategic level. These behaviours work against the organisations best interest, given that strategic inclusion is proven avenue for realising both the economic and social benefits of DE&I.

Key functional findings:

• 65% of respondents say diversity, equity and inclusion is a high strategic priority.
• 67% of respondents say their organisation is, at best, only somewhat successful at creating a workplace that is diverse, equitable, and inclusive.
• 50% of respondents from DEI-laggard companies say a lack of leadership commitment hinders their diversity, equity, and inclusion efforts.
• 71% of leader companies say they have DE&I accountability at CEO level.
• DEI-Laggards are substantially behind leaders and followers in tracking DE&I metrics, with 51% of laggards not tracking equity, nor diversity (26%) at all.

Strategic misalignment:

Examining the statistics, it reveals an ongoing misalignment between HR objectives and overall organisational strategy. Approximately 48% of respondents come from the HR function, yet nearly 14% of all organisations do not track equity, and almost 13% lack any diversity tracking metrics. Additionally, of the 86-87% of organisations that track these metrics, only 52% of these share DE&I metrics with the Board or executive team at all and not necessarily as group strategic objectives. Therefore, at best, half (most likely substantially less) of organisations strategically prioritise DE&I at the board/executive level.

In addition, there appears a disparity between DE&I actors' perception of leadership support and their actual needs. Despite limited sharing of DE&I metrics with the board or executive team, only 5% of DEI-leader companies report a lack of leadership commitment hindering their efforts. This consistent strategic misalignment presents ongoing challenges for DE&I teams striving to achieve the well-documented economic benefits. It may be time to redefine what type of 'leadership support' is required for people leaders to be able to act in the best interest of the organisation.

Beyond the research:

It is crucial to acknowledge the misalignment between organisations' stated group purpose and their performance measurements beyond the scope of this research. Despite mentioning diversity, equity, and inclusion in their visions, missions, and value statements, many organisations fail to effectively integrate these principles into their strategic objectives and performance measures. This perpetuates a disconnect that exposes organisations to strategic risks, opportunity costs, and potential reputational damage from stakeholders. Like the opposition against "green-washing" in environmental sustainability (the "E" in ESG), a movement is growing against "diversity-washing" in the social aspect (the "S" in ESG). Stakeholders are taking action, represented by a range of colours including blue, pink, purple, and rainbow-washing, to challenge this inconsistency. When oppositional voices become strong enough, they can directly impact brand perception and erode competitive advantage. Boards and executive leaders will inevitably face accountability from stakeholders, including shareholders and regulators, for consciously disregarding potential bottom-line benefits of strategic inclusion. It is not a question of "if," but "when."

Conclusion:

The HBR paper is essential for DE&I advocates, emphasizing executive support, actionable measurement, and accountability for success. It reinforces DE&I's economic benefits and stakeholder expectations. Yet, a misalignment persists between HR objectives for DE&I and overall group strategy with only fractional sharing of DE&I metrics with Board and executive teams. Bridging this gap will become even more crucial, as "diversity-washing" opposition grows. Boards and leaders are not duly considering the strategic risk associated with overlooking the bottom-line benefits of inclusion within the group strategy. HR and DE&I leaders need to communicate a better case for how strategic inclusion is in the best interest of the organisation. In return, they need leadership support that incorporates inclusion into group strategy, both within strategic objectives and a more open and inclusive group strategy formation and implementation process. Strategic inclusion is an imperative, now more than ever.

Review Paper: Creating a Culture of Diversity, Equity, and Inclusion: Real Progress Requires Sustained Commitment.

Source: Harvard Business Review Analytical Services (HBRAS) and Society for Human Resource Management (SHRM), published in the Harvard Business Review, 2021. (see References below)

Citation: As cited in Perple Stratistics - Strategic Inclusion Statistics: Why Strategies (don’t have to fail). A ?collection of 100+ statistics, quotes and research links for strategic-ally minded people leaders to openly enable a new inclusive global strategic paradigm.

Subject/s: #diversityequityandinclusion #deistrategy #diversity #equity #inclusion #strategy #strategicinclusion #businesstrategy #humanresources #hr #hrstrategy #harvardbusinessreview #hbr?

References:

1. HBRAS – Harvard Business Review Analytic Services. (2021). Creating a Culture of Diversity, Equity, and Inclusion: Real Progress Requires Sustained Commitment. Harvard Business Review. September, 09, 2021.?Retrieved on 25th May 2023 from https://hbr.org/sponsored/2021/09/creating-a-culture-of-diversity-equity-and-inclusion

?2. John Myers (2023). Perple – People Performance Pty Ltd. Perple Stratistics – Strategic Inclusion Statistics: Why Strategies (don’t have to) fail. Retrieved on 23rd July 2023 from https://perple.com.au/resources/perple-stratistics_strategy-statistics_why-strategies-dont-have-to-fail.pdf

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