Building the perfect scorecard to achieve DE&I goals

Recent social justice movements have raised the expectations of the public and stakeholders when it comes to organizations’ commitment to environmental, social and governance (ESG) initiatives, including setting diversity, equity and inclusion (DE&I) goals.

It’s not enough anymore for leaders to verbally commit to improving their DE&I. Rather, leaders must implement a DE&I program with measurable diversity and inclusion metrics so they can report their progress to their boards, investors, employees and customers, just as they would with any other business strategy.

But if you’re searching on Google for the perfect DE&I scorecard, chances are you won’t find it. It doesn’t exist because a generic tool won’t address your organization’s values, desired pace of change, or stage of DE&I maturity.

10 steps to successful diverse, equitable, and inclusive strategy

Fortunately, just because the perfect scorecard doesn’t exist right now doesn’t mean it can’t. From our years of working with organizations to develop effective DE&I strategies, we’ve recognized that organizations that successfully become more diverse, equitable, and inclusive follow a set of 10 steps. The first five set up meaningful DE&I metrics, and the last five focus on execution.

1. Determine the organization’s current DE&I maturity

The first step is to assess your organization’s current DE&I maturity using a data-driven DE&I diagnostic, then compare your results against a maturity model. Possible diagnostics include talent flow analyses, focus groups, social network analyses, psychometric assessments, and other data gathering and analytical processes. After collecting this data, organizations can use a regression and driver analysis to discover what’s causing their DE&I pain points and plot their status on the maturity model.

The Korn Ferry DE&I Maturity Model measures organizations against five dimensions:

• Risk management: Whether an organization has the infrastructure, capabilities, and behaviors necessary to identify, quantify, mitigate, and prevent DE&I-related risks.
• Awareness: How aware of and committed an organization’s leaders and employees are to the value of DE&I.
• Talent integration: How well an organization has integrated diversity, equity, and inclusion into its talent systems and whether leaders and employees display inclusive behaviors.
• Operations integration: How leveraging the organization’s diversity in an inclusive way that leads to greater efficiencies, increased safety, increased quality assurance, etc. will impact the bottom line.
• Market integration: How DE&I affects the organization’s top line by expanding to new markets, enhancing customer service, and strengthening community partnerships.

The model studies how organizations fulfill these dimensions through behavioral inclusion (how people treat each other) and structural inclusion (how systems treat people). It then rates organizations on a four-stage maturity scale: basic, progressing, advanced and leading edge.

2. Determine the organization’s desired DE&I maturity

In the next step, the organization sets its DE&I maturity goals for each dimension. The key is to ensure that DE&I goals align with the business’s strategic priorities and other internal initiatives.

So, for example, if your organization is focusing on specific talent processes, you’ll likely want to progress in talent integration before working on other dimensions. Alternatively, if your organization is planning to open in new markets, market integration and talent integration may be your primary goals.

3. Prioritize the elements of DE&I maturity the organization will pursue

After setting your DE&I goals, you need to get more granular and set priorities. For example, you might want to consider what else is going on in the organization, including your current and future budget, organizational culture, and the level of preoccupation of leaders and employees with other initiatives. Your priorities should also align with the overarching business direction and strategy.

In setting priorities, it often helps to look for quick wins so you can build momentum. You might also start with areas that are stepping-stones to future goals. Some organizations will start by educating their leaders on what it means to lead inclusively, while others will establish a DE&I council or employee resource group (ERG). No matter what you choose, the goal is to ensure your priorities and goals are realistic, reflecting your organization’s current DE&I maturity, complexity and resources.

4. Determine the pace of desired changes

Your timeline should be ambitious yet reasonable. To determine how realistic your goal is, consider your organization’s competing priorities, staffing availability, leader buy-in, and outside factors such as industry trends.

For example, a goal of increasing female representation among senior leaders by 30% in 2 years seems promising on the surface. But if the organization doesn’t already have representation at lower levels in the company, it will be difficult to achieve this goal. Instead, it may make sense to set sub goals to establish an equitable pipeline with the ultimate goal of increasing executive representation.

5. Determine the DE&I metrics that correspond to elements 1 through 4

Now it’s time to figure out how you’ll measure success on your priorities, goals, and timeline using DE&I metrics. You’ll need a balanced scorecard or dashboard with metrics that capture data about your organization’s performance and trends over time.

The DE&I metrics you’ll want to capture fall into five categories:

• Activity metrics: Measure the number of people involved in DE&I initiatives.
• Process metrics: Evaluate the impact of different activities on key processes.
• Lagging indicators: Capture a snapshot of the organization’s current state and past DE&I efforts.
• Leading indicators: Signal whether lagging indicator metrics will be achieved if things continue on their present course.
• Predictive metrics: Identify the likely impact of specific variables on key DE&I outcomes so organizations can understand what levers to pull to achieve their desired outcomes.

Each dimension of the maturity model uses one or more of these indicators to measure progress.

• Risk management: Lagging and leading indicators.
• Awareness: Activity metrics, process metrics, and lagging indicators.
• Talent integration: Leading indicators and predictive metrics.
• Operations integration: Lagging indicators, leading indicators, and predictive analytics.
• Market integration: Leading and lagging indicators.

6. Determine who will be held accountable, for what, and with what consequences

Even if you set the most realistic goals and DE&I metrics, you won’t achieve them if you haven’t assigned responsibility for seeing them through. But holding leaders accountable for DE&I goals requires more than simply delegating the responsibility.

Accountability requires metrics to meet three criteria. DE&I metrics must be ambitious yet realistic, in that they are driven by vision and aspiration yet not clouded by unrealistic wishful thinking. They must be specific and addressable by the leaders being held accountable. And they must be time-bound, with a clear deadline for reaching the goal.

7. Enable your leaders, managers and support systems

The success of your DE&I efforts hinges on how well your stakeholders are prepared. Make sure leaders and managers understand the business case for your DE&I initiative and how it aligns with the organization’s strategies. Then ensure everyone has the tools they need to get things done.

The foundation for this work is training. Managers need training on how to identify and manage unconscious bias in hiring and performance management processes and on how common talent systems and processes can perpetuate the lack of DE&I. With these insights, managers will be ready to take the necessary, courageous actions to achieve the organization’s goals. Meanwhile, supporting teams from departments including legal, compliance, communications, and more need to be aligned. The support they offer managers in achieving DE&I goals requires that they have the competencies and resources that enable them to assist.

8. Do a practice-run year

Before you tie pay and bonuses to achieving DE&I goals, you need to ensure that your leaders know how your systems work and how they are performing before it counts. A practice-run year ensures that your goals, metrics, and reporting are sound and that everyone understands what is expected of them. With a year of practice, leaders will be ready to optimize their strengths, improve on their weaknesses, and take the right steps to achieve their goals.

9. Communicate, monitor and report

Regular progress reports are essential so leaders and stakeholders can understand how they are progressing and make any necessary adjustments. Decide whether you’ll report on progress monthly, quarterly, or at some other cadence. Bring in HR so they can help interpret trends and partner with leaders on how to achieve the organization’s goals.

10. Be true to the process

To succeed, your DE&I initiative must be grounded in authenticity and transparency. Be sure to celebrate wins but don’t shy away from exposing challenges and gaps. Ensure you remain faithful to the process you’ve laid out and update your teams regularly. If you are facing roadblocks or falling behind on a goal, bring these issues to your team, so you can strategize and solve any problems.

Meaningful measurement is essential for driving DE&I efforts forward

Even if you have the perfect DE&I vision and strategy, it will be difficult for you to move forward without the right metrics. That’s because what gets measured gets managed.

As these 10 steps reveal, it takes two things — diligent setup and focused execution — to create a meaningful, effective DE&I scorecard.

To learn more about these steps, download our white paper, The DE&I metrics that really matter, which will give you greater insights into each step. It also highlights a case study of a global financial services company that developed an approach to diversity and inclusion metrics that dovetailed with its overall strategy.