DEI is Personal: My Story of Family, Kenya, and a Career

 

Diversity has been part of my life for as long as I can remember. We just never called it diversity when I was growing up. But it was there all along.

It started with being the youngest of eight children; five brothers and two sisters, all of whom are very different. Add in their friends and you get the picture: a bustling, dynamic house with a never-ending, revolving door of high school and college students. As the youngest, I spent a lot of time observing the differences and similarities of my siblings and their friends, trying to understand what made each person tick.

My early memories start with having Rotary Youth Exchange students in our house, which is when where an American high school student lives in another country for a year, while a student from that country lives in an American home for the same year. Over the years, we had students from Sweden, Belgium, Japan, Bolivia and other countries living with us, each bringing new perspectives on culture, language, food and traditions to my world.

I hung out with a fairly international crowd in college with friends from Argentina, Mexico, France and Kenya. After falling in love with my Kenyan friend, we got married in an international wedding with his family coming from India, Canada and Kenya to help celebrate. I didn’t think much of it at the time; however, someone recently said to me, “You married a Kenyan two decades ago?! That just wasn’t done back then.” Well, we did it. And we also moved to Kenya to live and work. It was only supposed to be for two years; we stayed for 12 years instead. My grandmother referred to Africa as the dark continent; that should’ve warned me of what was to come.

I hadn’t seen real racism growing up, but I saw it firsthand in Kenya. I witnessed how people of different skin colors treated each other on a daily basis. I noticed how people expected less of people with darker skin color, for no reason other than a bias that skin color was linked to intelligence. And I clearly saw how my husband was treated differently than me in various situations. All those observations shaped my beliefs around diversity, inclusion and belonging.

After returning to the US, helping teams, individuals and organizations talk about diversity was my focus. I started with age diversity, being dubbed The Generational Guru by the Washington Post. Yet that felt limited and incomplete. So, I moved into the wider arena of diversity, equity, and inclusion (DEI), using executive coaching, leadership development, and human capital consulting to drive those conversations forward.

Many people tell me that DEI conversations are daunting. I get it; it’s hard to look at our own bias and have these conversations. Yet, I’ve been doing it my whole life, personally and professionally. And my life is richer because of it.

I can help you start diversity conversations too. I’m pleased to announce DEI360, an organization’s starting point for Diversity, Equity & Inclusion (DEI). It’s an easy, customizable, online assessment that quickly allows organizational leadership to see how they’re doing from the employee’s perspective. Once an organization takes the assessment,( our team walks through the final report giving clear DEI data, a snapshot of the internal DEI landscape, and actionable next steps. Have questions? Check out our FAQ or contact us directly.

Let’s share experiences. Leave a comment below, send me an email, or find me on Twitter.

 

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Diversity as a Revenue Engine: What 16+ Studies Reveal

 

“What’s the business case for DEI?” is one of the most common questions we hear. Investing in diversity, equity and inclusion (DEI) leads to cost savings through reduced attrition and absenteeism, and faster, less expensive recruiting; it also contributes to the top line as well. Dozens of studies from respected sources have revealed the business benefits related to DEI so we’ve compiled 16+ studies that show why DEI is a revenue engine.

1.    McKinsey’s 2020 report: Diversity Wins: How Inclusion Matters analysts found that, “Companies in the top quartile for gender diversity on their executive teams were 25 percent more likely to experience above-average profitability than companies in the fourth quartile,” as well as “36 percent likelihood of outperformance on EBIT margin for ethnic and cultural diversity.”

2.    The World Economic Forum’s report Diversity, Equity, and Inclusion 4.0 suggests that companies with diverse employees have “up to 20% higher rate of innovation and 19% higher innovation revenues.”

3.    A frequently cited study by Catalyst found that Fortune 500 companies with three or more women board directors attained markedly higher financial performance, on average, than those with the lowest representation. Those with the highest percentage of women achieved 53 percent higher return on equity, 42 percent higher return on sales, and 66 percent higher return on invested capital.

4.    The Center for Talent Innovation found that employees in firms with above average diverse leaders are 60 percent more likely to see their ideas developed, 75 percent more likely to see their innovation implemented, 70 percent more likely to have captured a new market in the past year, and 87 percent more likely to feel welcome and included in their teams.

5.    According to PwC’s 20th annual CEO survey (2020), diversity and inclusion was the top priority for global CEOs, with 83 percent agreeing that they promote diversity and inclusion initiatives.

6.    Per the diagram below, the Berkeley University Center for Equity, Gender, and Leadership has found that DEI drives five key levers of financial performance.

 Berkeley University Center for Equity, Gender, and Leadership

7.    The Center for Equity, Gender and Leadership has found that companies with a higher proportion of women in their executive committees possessed stronger financial performance, including a 41% increase in Return on Equity on average, and those in the top 25% for gender diversity are 15% more likely to possess financial returns above national industry means.

8.    A 2016 Credit Suisse study reported that firms with 25% female senior leadership outperformed peers at a 2.8% compound annual growth rate. This annual growth rate number increased to 4.7% for companies with 33% female senior leadership and 10.3% for companies with 50% female senior leadership.

9.    A 2018 Harvard Business Review article states that firms in the top quartile for racial and ethnic diversity and inclusion are 35 percent more likely to have financial returns above their respective national industry medians and that diversity overall improved profitable investments at the individual portfolio-company level and overall fund returns. Teams that shared the same ethnicity experienced a lower success rate for investments: 26.4%, compared to 32.2% for diverse teams.

The same article states that firms with above-average DEI measured by six dimensions – migration, industry, career path, gender, education, age – had 9% points higher EBIT margins, on average.     

10. A HBR article reports that employees of firms with diverse leadership are 45% likelier to report a growth in market share over the previous year and 70% likelier to report that the firm captured a new market. This article also demonstrates that when members of a team have traits in common with a client, such as ethnicity, they are 152% likelier than another team to understand that client, and that leaders who emphasize inclusion, by giving diverse voices equal airtime, are nearly twice as likely as others to unleash value-driving insights, and employees in a “speak up” culture are 3.5 times as likely to contribute their full innovative potential. Where diversity exists without equity and inclusion, these results are rarely achieved.

11. A study by the Center for Talent Innovation reports that ideas from women, people of color, LGBTs, and Gen-Ys are less likely to win the endorsement they need to go forward because 56% of leaders don’t value ideas they don’t personally see a need for. The data strongly suggest that homogeneity stifles innovation.

12. Leaders should also bear in mind that changing demographics are causing the buying power of people of color to increase much more quickly than that of White Americans and that already a majority of youths under 18 are of color. By 2030 a majority of young workers will be people of color, and by 2040, people of color will be the majority across the US as a whole.

13. Bear those numbers in mind when you consider that a recent Glassdoor survey found that 67% of job seekers evaluate a company’s diversity practices before accepting a job offer.

14. Moreover, employees with the highest level of engagement perform 20% better and are 87% less likely to leave the organization, according to a survey by Towers Perrin.

15. And, according to LinkedIn, turnover costs employers half of an entry-level person’s salary and up to 250% of a senior executive’s salary. As you tap diverse networks for critical talent like data scientists, sales specialists and engineers, imagine the costs of losing and having to replace them, let alone the costs and difficulty of recruiting them if your firm is not already known as a great place for diverse talent to work.

16. Performance Excellence Network compiled an up-to-date and compelling list of financial and business reasons for DEI:

·         The top quartile of diverse companies are more likely to financially outperform their national industry means – 35% for ethnic diversity and 15% of gender diversity (McKinsey)

·         Diverse management teams deliver 19% higher revenues from innovation (defined as new products within three years) compared to their less diverse counterparts; in other words, they produce better ideas (BCG)

·         Companies with a diverse workforce enjoy 2.3 times higher cash flow per employee, and smaller companies as much as 13 times higher cash flow (Bersin)

·         Employees in highly diverse and inclusive organizations show 26% more team collaboration and 18% more team commitment than those in non-inclusive organizations (CEB/Gartner)

·         Teams that follow an inclusive process make decisions two times (2X) faster with half the meetings, and decisions made by diverse teams delivered 60% better results (Forbes)

·         Inclusive companies are three times (3X) more likely to retain Millennials for more than five years (Deloitte)

·         According to a national study, those who experienced discrimination at work were twice as likely as those who have not to report illness, injury, or assault which impacts productivity, engagement, and overall workforce effectiveness (NCBI)

CHCI weaves over a decade of DEI expertise into all of our core offerings. If you want to determine your company’s DEI strengths, opportunities for growth, and actionable next steps, check out DEI360, our new online assessment tool. We’d love to help.

Recommended Reading

·         Laura Tyson, Jeni Klugman, Genevieve Smith, Business Culture & Practice As A Driver For Gender Equality & Women’s Economic Empowerment, org

·         Mark Misercola, Higher Returns with Women In Decision-Making Positions, Credit Suisse, March 2016

·         Girls Rule, Forbes, October 2010

·         Rocio Lorenzo, Martin Reeves, How and Where Diversity Drives Financial Performance, Harvard Business Review, June 2018.

·         Paul Gompers, Silpa Kovvali, The Other Diversity Dividend, Harvard Business Review, July/August 2018.

·         Vivian Hunt, Dennis Layton, Sara Prince, Why Diversity Matters, McKinsey & Company, 2015

·         Why DEI Matters, Catalyst, June 2020

·         Rocío Lorenzo, Nicole Voigt, Miki Tsusaka, Matt Krentz, Katie Abouzahr, How Diverse and Inclusive Leadership Teams Boost Innovation, The Boston Consulting Group, June 2018

·         Rocío Lorenzo, Nicole Voigt, Karin Schetelig, Annika Zawadzki, Isabell M. Welpe, Prisca Brosi, The Mix That Matters: Innovation Through Diversity, The Boston Consulting Group, April 2017

·         Sylvia Ann Hewlett, Melinda Marshall, Laura Sherbin, How Diversity Can Drive Innovation,  Harvard Business Review, December 2013

·         Mariateresa Torchia, Andrea Calabrò, Michèle Morner, Board of Directors’ Diversity, Creativity, and Cognitive Conflict: The Role of Board Members Interaction, International Studies of Management & Organization, vol. 45, no. 1 (2015): p. 6-24.

·         Sylvia Ann Hewlett, Melinda Marshall, Laura Sherbin, and Tara Gonsalves, Innovation, Diversity, and Market Growth, Center for Talent Innovation, 2013

·         Muhammad Ali, Isabel Metz, Carol T. Kulik, Retaining a Diverse Workforce: The Impact of Gender-Focused Human Resource Management, Human Resource Management Journal, vol. 25, no. 4 (2015): p. 580-599.

·         Dana Kabat-Farr, Lilia M. Cortina, Sex-Based Harassment in Employment: New Insights into Gender and Context, Law and Human Behavior, vol. 38, no. 1 (2014): p. 58-72

·         Lindsey Joyce Chamberlain, Martha Crowley, Daniel Tope, Randy Hodson, Sexual Harassment in Organizational Context, Work and Occupations, vol. 35, no. 3 (2008): p. 262-295.

·         Cary Funk and Kim Parker, Women in STEM See More Gender Disparities at Work, Especially Those in Computer Jobs, Majority-Male Workplaces, Pew Research Center, January 2018

·         Anat Drach-Zahavy, Revital Trogan, Opposites Attract or Attack? The Moderating Role of Diversity Climate in the Team Diversity-Interpersonal Aggression Relationship, Journal of Occupational Health Psychology, vol. 18, no. 4 (2013): p. 449-457.

·         Stephan A. Boehm, David J.G. Dwertmann, Florian Kunze, Björn Michaelis, Kizzy M. Parks, Daniel P. McDonald, Expanding Insights on the Diversity Climate-Performance Link: The Role of Workgroup Discrimination and Group Size, Human Resource Management, vol. 53, no. 3 (2014): p. 379-402.

·         Stephanie N. Downey, Lisa van der Werff, Kecia M. Thomas, Victoria C. Plaut, The Role of Diversity Practices and Inclusion in Promoting Trust and Employee Engagement, Journal of Applied Social Psychology, vol. 45, no. 1 (2015): p. 35-44.

·         Society for Human Resource Management, Employee Job Satisfaction and Engagement: The Doors of Opportunity Are Open: Executive Summary(2017): p. 2.

·         Angela Glover Blackwell, Mark Kramer, Lalitha Vaidyanathan, Lakshmi Iyer, Josh Kirschenbaum, The Competitive Advantage of Racial Equity

·         Brian S. Lassiter, The ROI of DEI: Still Much Work To Do, Performance Excellence Network, March 2021

·         Ronadso Hardey, The Role of DEI. Credit Union Times, Credit Union Times, March 2020

Let’s share experiences. Leave a comment below, send me an email, or find me on Twitter.

 

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Making Diversity, Equity and Inclusion faster, easier, and actionable

 

“How do we recruit people of color?”, “Why can’t we get better diversity representation at our leadership level? “or “What does an engaged and inclusive workforce look like?” My team has fielded questions like this for the past ten years.

But come last summer, with the backdrop of the pandemic, Black Lives Matter protests, and Zoom-sweatpant-video-calls, we were fielding even more calls around Diversity, Equity and Inclusion (DEI), and we hit a wall.

Our clients had new questions. This time, their questions weren’t about DEI compliance and quotas; their questions were about gathering employee perspectives on how leadership was handling DEI.

We found out that other DEI assessments on the market would typically take 4-6 months (too long), cost over $25,000 (too expensive) or focus on regulations and policies (too much like an audit). But we couldn’t find a short online, turnkey assessment that would let leadership know how their employees rated the organization’s DEI efforts and what they should do next.

So we created our own.

We took our decade of data analysis and expertise to create the DEI360 assessment that quickly allows organizational leadership to see how they’re doing from the employee’s perspective.

We call it DEI360 because 360 represents a holistic view of a person or an organization. Think of a restaurant and the many groups needed to make a restaurant successful. There is the kitchen staff, the waitstaff, the customer, the health inspector, the owner, the accountant, the suppliers and many more. Each one of these groups has their own perspective on how the restaurant is running; combined, they give a 360° view of operations. The restaurant owner can’t rely on just one group’s perspective; the kitchen staff may think the food is delicious, but the customer may disagree. The restaurant owner needs to hear from all the groups to ensure the restaurant is successful. The same can be said for DEI. We don’t want just one perspective on how the organization is doing; we want many perspectives. Our DEI360 assessment was designed to incorporate DEI feedback from employees, teams, boards and all the different groups that create a successful organization.

In addition to offering a holistic 360 perspective, the DEI360 is fast (average 4-week process), easy to access, cost effective, and customizable. This means that your organization can get DEI data faster, have needed conversations about DEI sooner, and take action now. It also means that employees feel that their voice matters.

Research shows these things are important for the bottom line, productivity, and a more-engaged workforce. Do you think that’s important? If so, learn more here. We’d love to help you. 

 

Let’s share experiences. Leave a comment below, send me an email, or find me on Twitter.

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Case Study: Executive Coaching — How to Lead a Team To Scale Quickly

 

A company with an annual revenue of $2 million wanted to scale quickly while adding a new product.

Challenges to Address

A tech company CEO wanted to increase his ability to lead a team that would execute to the next level of growth. He wanted to:

1.    Improve his leadership presence with the team and Board.

2.    Develop a strategy to launch a new product while the current product ran effortlessly.

3.    Find the financing to launch the new product.

Solutions

Anne Loehr coached the CEO for approximately six months. During that time, she:

·         Conducted informal 360 surveys, to learn more about the CEO’s strengths and opportunities for growth

·         Worked with the CEO to develop five focus areas, with specific metrics, of goals to be achieved

·         Coached the CEO in person and on the phone for an hour at a time, with detailed homework for the CEO to complete before the next call

·         Created a library of resources for the CEO to use, including articles, podcasts and other information

·         Helped the CEO find a network of peers for outside support

·         Evaluated the coaching process with the CEO and determined next steps for the CEO’s future growth

Impact

Within a year of the executive coaching work, the company doubled its core product revenue and launched its new product, estimated to bring in more than three times the core company’s revenue.

My only regret about working with Anne is that I didn’t do it sooner in my career.  Working on my communication style, leadership skills and time management, I achieved results right away and feel I am ready to grow my company to the next stage because of her work with me.  Anyone who wants to grow as a professional would benefit enormously from her coaching.

-Steve Goldenberg, CEO, Interfolio

 

Let’s share experiences. Leave a comment below, send me an email, or find me on Twitter.

 

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