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Do Diversity Metrics Hold the Key to Diversity-Management Success?

I was invited to speak at Empire Blue Cross and Blue Shield, a division of WellPoint, No. 34 in the 2012 DiversityInc Top 50 Companies for Diversity. After I spoke, their President and CEO Mark Wagar talked about his business, specifically about the company’s customers and employees, and consistently and emotionally used the words “us,” “our” and “we.” There was no mention of “those people” or “them.” Mr. Wagar sees people as his brothers and sisters. Watch Wagar’s keynote at our DiversityInc Top 50 event.

He also spoke, with deep respect, of his community’s diversity and the need to focus on it—in the context of service.

Earlier in the year, I was invited to speak to the Wells Fargo Advisors (whose parent company, Wells Fargo & Co., is No. 33 in the DiversityInc Top 50). Their president and CEO, Danny Ludeman, closed out the event. Speaking to the audience of roughly 200 senior leaders, he asked how many of the (mostly white) men had attended an resource-group meeting; about one-third of the hands went up. Mr. Ludeman said: “The next time we meet, it had better be all of you.”

Point made. I’ll bet it will be.

Ten years ago, I did not see the consistency of switched-on leadership that I see today. More than half of Fortune 500 companies had no diversity efforts; today, I’d estimate that more than half do (even if a significant number of those company’s diversity efforts are little more than having tacos in the cafeteria on May 5).

Recently, I was asked an interesting question. A senior executive of a firm at the top of our list asked me if I felt that the questions we ask on our survey end up directing the reality we measure. In other words, if we focus on management techniques like mentoring and employee-resource groups, isn’t that what we end up seeing in our numbers?

No doubt there is a trailing effect of those questions on decisions being made by companies just starting out on the path of managing diversity, but there’s a definite path.

The DiversityInc Top 50 survey has evolved over the past 12 years, but it is an evolution based on cause and effect. Our ability to measure diversity metrics and outcome as expressed in human capital (there are other measurements of the outcome of corporate culture, but none as accurately and consistently measured by every company as human capital) has allowed us to ask questions about best practices. Given our enormous base of 587 participants, it enables us to see, by correlation, what works.

Management best practices, such as diversity councilsresource groups, structured mentoringgoal-setting and, most importantly,accountability, have statistically valid correlations to equitable outcome in accomplishment.

In other words, we’re not making this stuff up—we’re reporting diversity-metrics-driven results.

Our ability to accumulate the data—and disseminate it through our publicationevents and our benchmarking service—has certainly encouraged a direct path to the most rapid improvement for hundreds of companies. In turn, they have asked their suppliers for their diversity questions on RFPs and by tracking Tier II (subcontractor) supplier diversity.

So yes, there is a connection between the questions we ask and the reality we measure, but it is one created by the companies themselves. For example, the percentage of managers in mentoring and people in employee-resource groups has more than doubled in the past five years. Yes, we’re measuring both, but our measurement of those programs wouldn’t continue if there weren’t corresponding benefits.

In my opinion, the most important best practice we measure is the percentage of CEO direct reports’ bonuses that is tied to diversity-management results. This has gone from 5 percent to 12.3 percent in the past five years. It’s not logical to think that this level of reward is because of our competition—it has increased because smart CEOs want to make sure they’re putting the spurs to their diversity efforts.

It is the personal commitment of those at the top of organizations that makes the success or failure of managing diversity.

–Luke Visconti

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