How to avoid toxic targets and wishy-washy values in C-level D&I talks

C-level executives are finally driving D&I. Their determination to provide a value-based, ethical CSR reasoning and set hard, numeric representation targets is, unfortunately, the opposite of what research and experience says they should do.

Companies have been pushing for progress in D&I, investing substantially in programmes and partnerships, and are – compared to their efforts – generally disappointed with the change they observe, the feedback they get or the benefits they reap. For many, this is even more surprising as the public and political expectations around Diversity have spurred the involvement of the C-suite in recent years. This created hope that the much needed leadership on D&I would trickle down in the organisation and encourage concrete support for D&I as well as inclusive behaviour on an everyday basis.

Inconsistent rationale and misleading objectives

This year, I have once more worked with CEOs, CHROs and CFOs who were committed and willing to support D&I – and literally make a difference. Unfortunately, top managers tend to underestimate the depth – and breadth – of the topic and position themselves, and D&I, based on their own considerations. Two misperceptions contribute to an unfortunate framing with different unwanted implications.

• Top managers don’t think that a robust and relevant business case for D&I can be made and instead rely on ethical, value-based claims for Corporate Responsibility (which they consider sustainable). Research and practice show the opposite is true: The business case has been robust over 30+ years whereas moral reasons are neither consistent in a business setting nor sustainable (as we see with changing political leaders, for example)
• Top managers think that D&I can be steered in a similar way as operational business topics and therefore set ambitious D&I ‘targets’ which they expect to be pursued by the organisation. In doing so, they mix up ‘objectives’ with ‘success measurement’ and drive unwanted behaviour while lacking the required sense-making.

One example of how much backlash this can create made headlines, when Larry Fink, CEO BlackRock tried to make a CSR case for D&I. A growing body of research and other insight from recent years show alternative approaches and effective ways to establish a robust change agenda, create buy-in and generate benefits for all stakeholders.

Why you should clean up your D&I messaging, and how

When considering business-driven or value-based reasoning, combining the two appears to be a simple and easy solution: “D&I is good for business and also the right thing to do”. This combined rationale is believed to cater to different audiences that are either more receptive to moral, socio-ethical messages or to utilitarian arguments related to different, proven business contributions respectively. A scientific study from Norway, a country with consistent high rankings in gender gap or equality indexes, examined whether the framing of diversity affects individuals’ perceptions of fairness, attitude towards or willingness to support D&I efforts.

Are mixed messages or say do gaps dangerous?

The research builds upon previous analyses that found that social justice and business focused arguments may be competing or even incompatible. Findings suggested that gender, age or education can influence the perception of D&I as well as the context (e.g. industry) and that rationales are sometimes used as a pure rhetoric rather than manifesting themselves in strategies.

Personal positive experience most impactful – justice adds little value

The most recent research in this area found that one of the control variables, positive contact quality with diversity, had a more positive effect than the different rationales given. For these, attitudes towards D&I were significantly more positive if a business case or a combined rationale were given – compared to fairness only or no reasons. Similarly, combined or business only storylines had significant effects on the willingness to implement D&I. [Education and being a women were positively related with perceived fairness, attitude and willingness to support, but not age.]

Read more about the study here in this article.

Target group focus can be toxic – and actually has been already 

The low to no value that justice arguments add to the D&I reasoning include the extra cost of fostering preconceptions of (a) unfair advantages given to certain target groups, i.e. reverse discrimination and (b) lower competences members of disadvantaged groups may have that need to be compensated. One of most significant cases that illustrated these implications was the ‘Google memo case’ but also the success of many populist campaigns point in the same direction.

At this point, it also becomes visible how the question of quantitative targets ties in with the question of the most effective sense-making. 

Without the right mind-set, targets don’t work

The belief in D&I targets has grown almost as strong as the resistance they often create. Large-scale, international research confirms that a consistent, business-based sense-making is required to create the ‘acceptance’ needed to make targets a success. The assumption that it works the other way around (‘what gets measured gets done’) does not apply to D&I, science tells. It specifically suggests that preparing the organisational culture in regards to D&I is required before targets or structural support can have positive impact. 

The myth of quota and targets (reprise)

Meanwhile, the public discourse has established the undisputed narrative that more targets and stricter regulation are needed to finally mandate the change that politics and interest groups want to see. This does not consider that in many cases state-ordered targets have not had the desired primary or secondary effects while it had significant negative effects. International research helps to understand these dynamics by drawing an important distinction between ‘normative acceptance’ and ‘regulatory support’. Data analyses show that, while the two are related, it is the normative acceptance that actually leads to (gender) diversity becoming a success story. The findings show that neither legal quota nor supportive policies or infrastructure (child care, leave policy, flex work) alone mediate diversity to add business value, while pro-diversity mind-sets do.

The (success) critical component of values, mind-set and shared beliefs

When I first published the value-chain model for D&I, aka propelling performance principle, in 2005, it described in an evidence-based way the need to create open mind-sets on the individual level, in teams and in larger cultural contexts as a prerequisite to leverage Diversity through Inclusion. Latest data – from 1,000+ firms in 35 countries – show that the shared values and beliefs, e.g. gender role attitudes, must imply an intrinsic value for D&I so that business benefits can be created with D&I. The study explicitly states that it is not enough to “see gender inclusion as an obligation”. This result not only has implications on D&I storylines but confirms that also D&I strategies must tackle business and corporate cultures.

D&I as a driver of business success – not a result

Almost like an added value, the new research found – due to its longitudinal methodology – that diversity was actually the driver of company success and not – as critics sometimes argue – a result of good firm performance. The new finding also extends past research that showed that investors value strategies, including D&I, which are commonly accepted as best practice – another element that relates back to the need for normative acceptance of D&I.

Read more about the study here in this article.

Summary: Consistent framing and objective-setting for D&I 

The combined learning from the above scientific studies is a wake-up call not only for top managers as referred to at the beginning of the article but also for D&I leaders at large. The evidence provides guidance regarding the overall positioning and design of D&I. 

• Instead of describing D&I as a value or an element of Corporate Responsibility, C-level executives should explain the need for and value contribution of D&I to their strategic road-map. Today, this alignment happens smoothly as complexity, Globality and need for maximised performance are paramount and close to D&I at the same time.
• Instead of calling representation figures ‘targets’ of D&I, such metrics should be established – alongside meaningful KPIs for open-mindedness and inclusiveness – as indicators to measure the impact of change initiatives. There is no doubt that such measurement continues to be required. Recent years have shown, however, that the ‘quota perception’ is more toxic than the motivating value can ever be.

The revised architecture of D&I storylines will also have implications on the strategic implementation of Diversity and Inclusiveness. For it shifts the attention from a well-intended yet unfortunate recruiting or promotion focus towards a more holistic understanding of the systemic dynamics that have caused the multiple inequities and inequalities that need to be addressed. The future development needs clearly lie in the areas of Culture and Leadership, where belonging, engagement and performance are accelerated. The real drivers of D&I, and business success.

These articles talk more about impactful D&I implementation

https://www.dhirubhai.net/pulse/when-investments-activities-di-dont-match-progress-change-stuber/

https://www.dhirubhai.net/pulse/how-make-your-di-work-more-impactful-inclusive-michael-stuber/