The Evolution of the Diversity-Equity-Inclusion (DEI) and Sustainability Functions: Three Parallels

One of the many benefits of being in leadership search for more than 20 years is the unique opportunity to observe trends and parallels across industries and functions. With a focus on recruiting Diversity-Equity-Inclusion (DEI) executive leaders over that period, we have seen the evolution of that role in terms of professional experience sought, reporting structure, team sizes, budget variations etc.?Today, as we are increasingly being sought to support the recruitment of sustainability, climate, environmental and ESG leaders, we are noting many parallels and wondering how the evolution of the DEI function might provide lessons for the evolution of the social responsibility and sustainability functions?

Our first awakening to these parallels was in 2008 – in fact, we wrote a publication that year entitled “Corporate Social Responsibility: The Evolution of a Role (Lessons to be Learned from the Diversity Function)”.?We were proud of it, our clients read it and nodded sagely - and then the financial crisis happened and CSR dropped down the list of priorities as the economy struggled and organizations reduced workforce.?

Fast forward nearly 15 years and DEI, social responsibility, sustainability, climate and ESG are central to almost every talent conversation as a new generation ascends to leadership positions.?

In the past 18 months we have recruited Chief Diversity Officers for organizations as diverse as KeyBank, the Metropolitan Museum of Art, Fannie Mae, and large private philanthropies.?Our client list also includes environmental behemoths such as NRDC and the Sierra Club, as well as clean energy funds and research institutes addressing climate change. But, as inflation and interest rates rise, the stock market wobbles and organizations begin to reduce workforce, we are reminded again of the parallels between the development of these two critical functions.?What can we learn from the past?

Our hope is that sharing the lessons we’ve learned will help lead your organization toward greater success.

Understanding the roles

Both the DEI and Social Responsibility functions add enormous texture to organizations, bringing alignment and dexterity from the top down. But to truly understand how parallels can provide lessons, we must first understand the roles.

One immediate parallel is the wide variety of titles given to these functions – for the sake of this piece we will use the nomenclature of Chief Diversity Equity Inclusion Officers (CDEIOs), and Chief Sustainability Officers (CSOs)

CDEIOs plan, guide, counsel and advise an organization’s leadership and employees on building and sustaining a diverse, equitable and inclusive culture. This requires collaboration across management functions in order to create, implement, and oversee programs designed to ensure fair and equitable treatment of employees.

The role of a CSO, varies based on the organization. Generally, this leader is responsible for?creating and managing a social responsibility/environmental sustainability strategy, and communicating with management, shareholders, customers, and employees.

The parallels abound: The need for an executive-level leader for each of these functions arose over time and in response to several business drivers. ?The professions evolved from a cost center to a strategic necessity because, when effectively carried out, they positively impact profitability, public opinion, and customer loyalty. Both roles are now tracked by third parties who provide information on how their success improves an organization’s financial performance. Likewise, indexes are published that track valuations for executives in both corporate social responsibility and diversity, equity and inclusion.

So, who are these leaders and how do you maximize their success?

Success in Recruiting: 3 Parallels that Intersect

We begin by reviewing how preparation and planning ahead of the recruiting process positively impacts the leader’s success once they join your team.

Parallel 1: The Need to Create a Meaningful Position

Each of these roles should be set up to have significant impact. ?That means understanding why your organization is looking to fill this role and being prepared to demonstrate what resources you’ll invest to make this position successful.

When leadership invests in creating a meaningful CDEIO or CSO role, there is greater opportunity to both recruit and retain the executive. In a competitive talent environment, candidates need to know that you are actively interested in solving the challenges they’re hired to tackle.

Address the following before you start your search:

• What’s required from the function to deliver impact? Understand what is unique about working within your organization. Is a strong communicator a priority - someone who brings with them an influential market presence? Perhaps your organization requires someone who’s innovative and able to see beyond what hasn’t worked before to develop new initiatives and programs? Whatever it is for your organization, clarify it prior to conducting the search.
• Making KPIs realistic. Managing expectations is critical in any leadership search but, for roles that include what has historically been considered ‘soft’ outcomes, those KPIs are more critical than ever. An empowered executive can assess, quantify and report on impacts and value, as long as measurable KPIs are set and communicated from the start.
• Understand and communicate the value. When you integrate the CSO or CDEIO directly into the C-Suite, you’re making a strong statement about how you value this function and the work they’re doing.

Our experience shows us that defining and enabling a meaningful role will both attract and retain the best executive talent in both the DEI and Sustainability professions.

Parallel 2: Going Beyond the Firefight

If your organization is recruiting this executive simply to put out a current fire, you will sacrifice sustainable, long-term success. Here’s what we’ve found:

• Be forward-thinking. Make this position more than simply a reaction to a current situation. In other words, don’t hire this role simply in response to “the oil spill’. Don’t be reactionary. Be purposeful.
• Identify your unique focus. Don’t cut and paste another organization’s job description because it won’t reflect your needs. Understand what is it that your company needs, has and will benefit from the most when it comes to CSR or DEI.?Put your organizational values and goals front and center.
• Be honest: What is the organization’s motive for this hire? Are you responding to a new law or other compliance-related statute? Are you a consumer-facing organization and want to improve reputation? Or is this an HR objective, wanting to be an employer of choice for millennials? Does your CEO want to participate, as an organization, in the betterment of the world? Are your shareholders demanding greater accountability??Leadership candidates respond to authenticity – even if the picture is not always pretty.
• Establish a strategy for the function. Both the DEI and Sustainability executives are strategic hires. Dig down, and identify specific goals to attain, then celebrate those achievements as the organization accomplishes its goals.

Defining and enabling a strategic role attracts and retains the best executive talent, as the impact they have will be felt across the organization.

Parallel 3: Hierarchy and Access

The place the CDEIO and CSO executives inhabit in your organizational hierarchy will be a leading indicator of how these roles are regarded in the company.

• Build Credibility: When the CEO makes a public commitment to this role’s success, it establishes credibility for this person as business partner… and as someone who is critical to business success.
• Celebrate Success. Consistently point to this commitment by proclaiming this role’s successes at higher levels.
• Reporting structure. As above, the function reporting the CEO establishes commitment to the role’s success – but that doesn't mean it is always the best place in the organization chart.?Who are the organizational influencers, who will help this leader get things done??The value of reporting to CEO is reduced if this role is the 12th, 13th or 14th direct report and has no access to that CEO.?A clear line of view, access and communication to the decision makers – both the CEO and the Board - is often more impactful that a box on a chart.

Defining and enabling a role with influence and access helps attract and retain the best executive talent, because they know they are set up to achieve great things for the company and society.

A Timely Note: Facing the Nay-Sayers

A new “anti-woke” voice is rising that suggests corporations are not the place for addressing societal challenges. Nor, they say, is it the responsibility of corporations to focus on sustainability.

However, research has proven repeatedly that addressing what some consider societal issues within the corporation is good for business. Values really matter to employees – those in leadership positions and throughout the organization.?

What is important is that you are transparent and authentic about what your organization believes, from the top on down. Don’t rely on hashtags as a symbol. Live what you believe in how you hire.

Here’s your takeaway:

To successfully identify, recruit and retain an executive for a DEI or Social Responsibility/Sustainability leadership role, take to heart some of the key lessons we have learned. Make it a meaningful position. Don’t simply react to a moment in time. And be sure you’ve positioned the role for power within your organization’s hierarchy.

After placing so many DEI executives over the years, we’ve found that the correlation between what’s needed to successfully recruit and retain an impactful Chief Diversity, Equity & Inclusion Officer aligns closely to what is required to recruit and retain an impactful Chief Sustainability Officer. We would be happy to apply the lessons we’ve learned to help you build the framework for meaningful change and a successful hire.