Diversity Insight: Set up to Fail!

Fail! It is a strong word choice for a headline but, unfortunately, not far from the truth. A recent survey conducted by executive search consultancy Russell Reynolds of 234 diversity executives employed at companies on the S&P 500 found that, despite an influx of new chief diversity officer positions, few CDOs are given the resources and support they need to succeed.

Four Critical Challenges CDOs Face

Credit union executives and board members should be mindful of the following four critical challenges as they consider the appropriate organizational infrastructure to support diversity and inclusion.

1. The Chief Diversity Officer role is new. Sixty three percent of CDOs who participated in the survey were hired or promoted in the past three years. Additionally, only 47% of companies on the S&P 500 reported having a CDO or equivalent.
2. Diversity and inclusion is a low business priority. Among all leaders surveyed, D&I came in last on a list of eight potential business priorities—lower than mergers and acquisitions, new geographic markets and managing geopolitical uncertainty.
3. CDOs have unrealistic responsibilities and inadequate resources. The survey found that the CDO role is multi-faceted, with responsibilities ranging from legal/compliance to learning and development. Despite the wide range of responsibilities, around half of CDOs have additional roles or responsibilities unrelated to D&I that detract from the time they are able to dedicate to implementing and executing the D&I strategy.
4. Data collection is insufficient to inform decision-making. While 69% of CDOs reporting tracking employee survey results, only 35% measure employee demographic data—the most important outcome of their D&I strategy. Additionally, only 28% of CDOs believe formal employee surveys drive D&I strategy.

These four challenges, along with others not mentioned in this publication, strongly suggest more effort is needed to position CDOs for success. It stands to reason that an organization that commits to adding a person to the president’s cabinet is doing so because they view diversity as equal in importance to finance, legal affairs, human resources, marketing and other core functions in driving organizational performance. While CDOs may be elevated to a level of equal importance on the organizational chart, the workplace narrative surrounding CDOs differs. It is a narrative of inadequate support from senior leadership colleagues, lack of financial resources to carry out job-related functions, unclear reporting lines, advocacy as the primary tool of power and uncertainty of organizational positionality.

Four Opportunities to Position CDOs for Success

1. Leaders (e.g., president/CEO and directors) must champion D&I and make it a key business priority. The CDO can only be successful in implementing organization-wide change when the executive leadership team establishes the importance of D&I and exhibits inclusive leadership behaviors. Executive leaders should emphasize D&I as a key business priority and hold middle managers accountable for advancing D&I efforts in their respective units. A top-down emphasis on D&I can increase employee receptivity to change mandates and accelerate progress towards D&I-related metrics.
2. Selected CDO candidates should have experience building a compelling vision and advocating for it among executive-level colleagues. As illuminated by the Russell Reynolds report, CDOs face a long list of challenges to successfully implementing a D&I strategy. Before a CDO can effect change throughout an organization, they must first secure buy-in and support from senior leadership. Candidates who do not have experience with building and advocating for a strategic plan may find this crucial component difficult and, thus, a significant impediment to success in the role and for the organization. When recruiting and selecting candidates for a CDO role, an organization should look to identify individuals who can craft a compelling vision and have a track record of success in advocating for new initiatives and organizational change.
3. The CDO position should be empowered with the authority and budget to activate and implement a comprehensive D&I strategy. Such intentional practices as orientation programming, innovative mentorship programs and professional development funds have been found to increase the retention of staff of color, according to my 2017 book, Advancing Equity and Diversity in Student Affairs: A Festschrift in Honor of Melvin C. Terrell. Implementing such practices, however, requires funding and budget authority. Advocating on behalf of D&I efforts only goes so far. If an organization is committed to achieving and sustaining a diverse and inclusive organizational climate, it must implement programming to foster a climate of inclusion and support the unique challenges of a diverse workforce. Providing the CDO with a budget and the authority to activate a comprehensive strategy is key not only to attracting top diverse talent, but also to ensuring employees want to stay with your organization long-term.
4. The organization must bolster data collection efforts to better understand the experiences and climate of all employees. An organization’s failure to track employee data is a significant hindrance to the success of any D&I effort. Without actionable insights on employee perception of workplace climate linked to demographic factors, a CDO is incapable of making informed decisions to purposefully and intentionally improve the experiences of all employees. Organizations must track employee demographic data and gather perceptions of workplace climate for all employees, including those who have left the organization. These data can illuminate facets of the D&I strategy that are effective, gaps in recruiting efforts or support for diverse candidates and, ultimately, the ROI of an empowered CDO.

Credit union leaders should note that organizations with diverse boards and executive teams were up to 35% more likely to outperform their less-diverse competitors according to McKinsey and Company. Diverse executive teams stem from a diverse workforce developed through the implementation of an authentic and comprehensive D&I strategy. Organizations that are committed to D&I can greatly advance their efforts by empowering their CDO with the resources, support, and actionable insights to succeed in the role and drive meaningful change for the organization.

Jerlando F. L. Jackson, Ph.D., is a globally recognized organizational scientist, leadership strategist, entrepreneur and university professor. He is founder and executive director of the Organizational Disparities Institute.