Lunch and Learn | The Evolving Role of the Chief Diversity Officer | 3 percent conference

Tai Wingfield, Senior VP, Weber Shandwick More companies are increasingly aware of the business case for diversity and inclusion to drive competitive advantage, growth and corporate performance. Yet, the rapid-fire external pressures erupting in wider society are stress-testing and transforming the role of the Chief Diversity officer in unprecedented ways. Where is the role of the CDO headed? What are the imperatives to impact and achieve genuine diversity and inclusion in the workplace? What’s needed to be a CDO in 2020? During this session, Tai Wingfield shares findings from Weber Shandwick’s new study, Chief Diversity Officers Today: Paving the Way for Diversity & Inclusion Success. The study unveils the roles and responsibilities of the Chief Diversity Officer (CDO) and identifies the business benefits of a D&I function that is closely aligned with the overall corporate business goals and well-integrated with the marketing and communications groups. SHOW LESS

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Tai Wingfield | Sr VP | Weber Shadwick 0:06

Thank you all so much for having me here this afternoon. It is an honor. I am thrilled to present to you today some new research that we conducted at Weber shanwick on chief diversity officers. My name is Ty Wingfield, I lead the Diversity, Equity and Inclusion offering at Weber shanwick. And I counsel clients across a variety of different industries on how best to embed communications as a part of their DNI strategies. And so, as evidence mounts of the positive contributions to companies success from having diverse workforces, there's also a growing need for a leader to spearhead the DNI function and align that function with the overall business strategy. And that some of what we've explored in this new research but before I jump into the research itself, I want to do a little bit of foundation setting and really lay the landscape for the corporate DNI space today. So, as many of you may be aware, especially attending today's conference, diversity and inclusion in the workplace, or the lack thereof, has never been as visible in the headlines as it is today. A couple of years ago in 2016, and 2017. Many of you may remember that there was a lot of news about the abusive and macho work culture in tech firms that really dominated headlines then. But fast forward to a few years. Now we're seeing a proliferation of DNI related news across industries. Whether it's news about the lack of gender diversity in partnership ranks within the legal industry, or the need for financial services to have more gender diversity on their boards. We see a lot in the way of pay equity, and definitely a lot of headlines around sexual harassment across industries in the era of me too. So every day, it seems there's a new headline headlines that are rattling the Human Resources functions, our legal department, communications teams, DNI functions, but also headlines that are rattling employees and company external stakeholders like shareholders and customers. The news isn't all bad. However, some of the headlines are featuring new initiatives, or policies that are really aimed at enhancing workplace diversity and equity. More recently, we saw CEOs Take action by joining a coalition founded and spearheaded by PwC to share best practices and commit to advancing DNI within their own walls. So regardless, savvy organizations are really taking notice of DNI. And they're not just taking notice because it's dominating our headlines. There have been multiple studies published recently that prove and quantify the bottom line benefit of a diverse and inclusive culture. Companies that are asleep at the wheel really stand to lose competitive advantage. And this is a crowded slide on purpose. It's really to illustrate the complexity of the corporate DNI landscape. It's increasingly complex. issues that historically have not been considered workplace appropriate, have now not only seep into organizations, but employees and external stakeholders are expecting that organizations and their leaders have a point of view. We've counseled numerous clients over the past year on their response to a variety of different issues, from pending LGBTQ plus legislation, to communication around their views on sexual harassment in light of me to organization organizations can really be powerful entities in shaping legislation, and public discourse and opinions. But they need to do so responsibly and authentically.

And so giving, it's increasing visibility, we were actually pretty stunned to uncover relatively scant publicly available information about this increasing corporate role. There wasn't a lot of information out there on the diversity function. In particular, the position of the senior most DNI officer in a company often title the chief diversity officer. So we decided to conduct our own research among DNI professionals to fill this void. And the result is this report, Chief Diversity officers today, paving the way for diversity and inclusion success. And the study focuses on two specific areas of learnings. One is the roles and responsibilities of the CEO. What are their challenges? What are they faced with today and your core priorities. And then two, and we'll spend a bit of time on both of these sections, but particularly on the second point, the best practices of DNI functions that are well aligned with the business strategy of the firm. As our study shows, the consequences of alignment present the potential for high reward for a company in terms of its reputation, employee retention, and even financial performance, it's rapidly becoming imperative that this opportunity be leveraged in order for companies to realize the returns on their growing investments in diversity and inclusion, which are pretty sizable. McKinsey actually reports that about $8 billion a year is spent on diversity training in the US alone. So there's a lot of money being funneled into the DNI space. So a little bit about our methodology. We at Weber shanwick partnered with our research agency, k RC. And we surveyed 500 senior level professionals in the US who are responsible for DNI in their organizations. These individuals work full time, and in companies with an annual revenue of at least $500 million dollars. They are working age and they spend at least some of their time on the job dedicated to DNI and I'll touch on that last point a bit later. And what we uncovered were fascinating details on the role of the chief diversity officer today, and insights into the future state of this profession. So the future of DNI and the CDO, we find one space that nearly 80% of DNI professionals feel very optimistic about the future of DNI. They're seeing investments being made. We're seeing many more appointments of DNI leaders in this space. And so they feel pretty optimistic that things are moving in the right direction. And more than half of DNI professionals anticipate that most companies will have someone leading diversity and inclusion in most companies in the next five years. And so who are chief diversity officers? We took a little bit of a look at the demographics. And what we found is that in our study, most DNI executives tend to skew male, white, and are mostly millennial, and annexures. And it's interesting because I think a lot of people still think of millennials as 20 somethings, but the older Millennials are well into their late 30s. So they've had quite a few years of work experience. And wow, this, this demographic does not seem that diverse when we put it in context and compare with fortune 500 companies, senior executives who are mostly white and male, it is more gender diverse, and we see a lot more age diverse diversity within this space. And so we're looking now at CDO reporting lines, who are they reporting into, and we see the majority of 40 are reporting into someone within the C suite. We find that more than most CEOs are have at least two lines of direct reports. Some are reporting directly into a Chief Human Resource Officer. But nearly 39% are actually reporting directly into the CEO, which is pretty interesting. And some also are reporting into their boards.

Make sure this great

and leadership interactions, we're also finding that CTOs, not only are they reporting into some member of the C suite, but they're likely meeting with their CEO on a monthly basis, which we thought was pretty interesting and slightly less with members of the board roughly around nine or 10 times a year.

And while most diversity officers are based and headquartered in the United States, the majority of them have a global remit. 55% say that they have responsibilities over markets outside of the US. So it's also increasingly important that diversity professionals have some sort of global expertise and know how.

So CTO responsibilities. And it's important if you can't see the top three key priorities that chief diversity officers are saying that they have over the next year to year and a half. recruiting and retaining diverse talent came out equally with diversity and inclusion training, and fostering a diverse and inclusive workplace. recruiting and retaining diverse talent, I think was an obvious one for us. We know that part of what a DNI leaders responsibility is, is to make sure they're building the pipeline, right? They are outsourcing talent both at the entry level but also at the mid level, to ensure that they're getting a diverse slate of potential new candidates. And then training I mentioned earlier, the McKinsey study the $8 billion figure, DNI leaders are increasingly partnering with heads of HR and learning and development, to bring internally trainings that help build an inclusive workforce, whether it's unconscious bias training, which we've heard a lot about, and there's a lot of research on on its effectiveness, but also training for leaders on how to be inclusive leaders. Right. So there's a lot of investment and a focus on responsibility there as well. And so beyond their responsibilities, how are they being measured? What are the measures of success for a CDO? So what we're finding today is that they're being measured on retention rates, right? What types of practices and programming are they putting in place to build inclusive cultures that really create environments where diverse employees want to stay, and that they can identify a path forward within that company. And of course, recruitment, but employee engagement came out first. And we thought that this was particularly interesting and just giving kind of our role in line of sight into the communications function. It's increasingly important that CEOs are focused on engaging employees in the process of building an inclusive culture. The DNI is not something that can live solely within the diversity function or the HR function, if it is to be successful. And so getting employees involved and building awareness around why DNI is such an important investment, it's critical. So what are the challenges that are being faced by Chief Diversity officers, we hear a lot around a lot of the challenges and progress that still needs to be made in this in this space. So we really want it to better understand what stopping CEOs from advancing their core DNI goals and objectives. And what we find here is that there are a myriad of top challenges, but we're focusing here on the top. And the first one is making the business case for diversity and inclusion. 27% of our respondents list, this is number one. And I thought it was interesting. For one reason, again, we see so much data and research out there, that demonstrates and quantifies that having a diverse workforce, having diversity in executive leadership ranks, has a correlation to financial impact and company's success and competitive advantage. Right. So why is there still a challenge in terms of making the business case? When we spoke with several chief diversity officers, there were quite a few who said, you know, they were still on this path of convincing their C suite, that this is an area that needs investing in, they know the research, they understand that they see it, but they don't quite understand what that means for their industry or for their specific organization. But beyond that, the other reason here and making the business case and what CEOs are really challenged with is making the business case for mid level managers. This is a space that's in an area within companies that's oftentimes overlooked. But mid level managers have such an impact and an influence on a company's culture, whether or not it's inclusive. If you can Think back to maybe a job where you were unhappy or a company that you left more often than not. The reason is because you had a manager that you did not like or couldn't work with, right? And so if CTOs and if leaders are not investing in this space, and building the business case, and awareness for why diversity and inclusion is performance, why having a diverse workforce and inclusive culture will help you do your job better? Then you fail, right? So making the business case also includes that, that level with any organization.

And then making diversity and inclusion values are outcomes visible externally, this was also pretty surprising. And we see a bit further down that one of the top challenges is having a DNI function at siloed, where you haven't been able to really partner or align with other business units within the organization. And oftentimes that includes communications and marketing. And we also know that as job seekers as customers really look at a company's values, what they stand for DNI being a part of that. They're also looking to see evidence of how a company's culture is comprised, what does their workforce look like? And so if an organization is failing, on externally telling its story, and communicating about the investments is being made, it's hard for those potential candidates and customers to really understand where they stand. And so what are the company challenges that are hindering DNI goals in the previous slide? Those are some personal challenges for diversity executives, but what are the company challenges? organizational culture is a big one naturally, right? I mean, this comes out at the top. And it's because DNI and culture, the symbiotic relationship, culture is the behavioral norm and unwritten rules that shaped the company environment, and how people interact and get work done. DNI is a major contributor to culture, and if done properly, can propel culture positively. So culture is number one. And then second to culture, we have external cultural, societal shifts, right? We're seeing now more than ever, societal issues seeping their way into our workplaces. We see a lot in the way of CEO activism, Weber shanwick, has done some extensive research in that space. And also employee activism, employees who are really going out there and pushing companies to evolve their policies to be more inclusive, right. So we're seeing a lot of these issues around society, becoming a must haves for companies, employees are expecting that leaders have a point of view on issues around LGBT inclusion on gender equity, gender equality, pay equity. And then another piece of this is that internal support is needed for success. We found that the majority of DNI professionals say that this is critical, it's an imperative. And it's important to note that internal support goes beyond support from the top that's critical, right? You have to have the investment and buy in from your C suite, from your core leaders alignment with HR to be successful. But beyond that, what does internal support mean? I thought this kind of wheel was pretty interesting. And it comes from Johnson and Johnson, in their first their inaugural DNI report. And I've not really seen it illustrated in this way before, but it really demonstrates that DNI has to be embedded across the business. Again, it's not something that can be solely owned by DNI or by the HR function. It has to be embedded across the organization. So what do we mean by that? Having an employee resource groups, right employee resource groups, I usually volunteer employee led affinity groups where employees come together and they can celebrate their unique differences and what that means for the workforce. But they also can be partners with the business and driving forward and inclusive culture. Having an advisory council comprised of senior leaders, making sure that senior leaders understand the enterprise wide DNI strategy and are driving that strategy forward those objectives forward in their respective business units. So that's another way that DNI should be embedded throughout the business. And of course, people managers, making sure That people managers, those mid level managers understand as well, what their role is how they can lead inclusively lead teams inclusively, how they think about diversity and inclusion when they're making promotion decisions or when they're interviewing potential candidates. So again, it's important to ensure that DNI is embedded throughout the business. And this is what DNI leaders mean, when they say internal support.

Yeah, despite the evidence, despite the research, we still see that commitment is often lacking. And I think it's clear and a lot of the headlines we're seeing right that we're not there yet. There's a lot of work to be done. But we wanted to really understand what that entailed. And we found three things. Not all DNI functions have a dedicated leader, only 34%. And the other piece of that is that DNI is still a part time job for many 40% have DNI as a part of their broader remit. So if you're an organization where there's no one at the helm, no one really driving forward DNI. And then maybe you do have someone responsible, but it's only part of their job. How effective Can you can you really be, and especially if you are a multinational organization where that individuals remit is global in scope. And then alignment will spend the latter part of this discussion on alignment. But that's also an issue. It's not a top priority. A lot of companies though, they understand and they've seen the research on the business imperative for DNI, they're still treating it as something that's a nice thing to do a check the box exercise, which is detrimental. So we looked at DNA alignment with company strategy, making the business case. And this part of the study is really to provide a call to action, but also some best practices and tools that organizations and DNI professionals in particular, can use to really make the case and try to align more closely with the business. So what do we mean by alignment? Well, we looked at it alignment as a continuum. We asked survey respondents how aligned is the DNI function with your business strategy. And there were three different sections here. We had those who said, they're well aligned with the function that their DNI, office and their function operates like a business, they are evaluated based on financial performance of the organization beyond just representation numbers, and DNI is embedded across the organization. Then we had those in the middle that are somewhat aligned 46%. And then at the bottom here, we had 14%, who say they're completely misaligned, they have no alignment or really line of sight into what the business is doing and senior leaders. So we found that well aligned functions realized three business advantages. And what we did was look at that alarming number, actually, the 39%, only four and 10 DNI leaders say that they're well aligned with the function. And just given the imperatives that we know and the correlation to business success. That's a pretty small number. But we looked at that group of executives. And we identified some key themes and best practices that were pretty consistent across that group, but also where we saw a significant difference between what they were doing and what those who were in this somewhat aligned and misaligned groups we're doing. So the first here is that alignment has a tangible outcome on new hires and resignations. And it's pretty significant here. We found that those who were in well aligned functions were much more likely to say that they were able to better recruit diverse hires and to keep their top diverse talent in house.

And we know from research that we've done at Weber shanwick on the employer brands that job seekers and employees have expectations. We've talked a little bit about that in a way of CEO and employee activism. But the numbers are telling 43% of employees believe leaders have a responsibility to ensure a diverse and inclusive workplace. And this isn't necessarily leaders like your chro or your CDO, but the CEO, right they have a responsibility. 40% of employees say that commitment to gender equality is a key factor in their job search. And this ties back closely and it makes a lot of sense to the need for external communication, right, making sure that the investments an organization is making in terms of gender equality and equality more broadly, are visible on their website or visible when their executives are out speaking on panels, because job seekers are looking for this. And I have to hypothesize that this number will significantly increase over the next year or two, when we revisit this this research. And 52% of millennials in particular expect positive DNI change. So it's an imperative to alignment positively impacts company reputation and financial performance. And we know this from the research that we've seen. But we do see DNI professional self report, that when they're well aligned with the function, they are much more likely to say that they have a positive corporate reputation, and that they also are doing well in terms of financial performance. And then three, alignment creates a competitive advantage. And I mean, this number on the left here is pretty significant in comparison to those who were in Well, a lot or somewhat aligned in this align functions. 70% say that their DNI efforts compared to those, those other companies in the industry have more of a competitive advantage. And alignment isn't something that just happens by accident, right? It takes very deliberate and intentional focus, investment of time investment of resources. And it's something that an organization has to continue to invest in, year after year after year, because demographics are always changing, right? So it has to be fostered deliberately, through leadership, through CEO support, financial accountability, and not only financial accountability in terms of dollars that organizations are investing in our DNI function and trainings, but also holding leaders accountable financially. Organizations like Sodexo, have taken some pretty what some would call drastic measures, but what they found to be pretty effective in tying bonus structures of their senior leaders to diversity and inclusion metrics. And we see a lot of companies really taking similar steps to really put a stake in the ground and hold their leaders accountable. So financial accountability is also critical. And of course, we've talked about strategic communications. So I don't want to just leave it there, right with here are the key things that well aligned functions are doing but what are some of the guidelines? What are the best practices to think about as you go back to your own organizations, and meet with your leaders to make sure that DNI is more closely aligned to the business strategy. we've uncovered six here. And these are things that I've touched on throughout this presentation. But the first is appointing a DNI leader, you have to have someone who's driving the business who's driving the strategy, the goals and objectives forward, who's putting the right processes in place, who's evaluating the company's demographics, and identifying where there are gaps and putting the right solutions in place. So appointing someone to really lead that space is critical. And it's oftentimes the first step. But again, it's not just stopping there, right? You have to have this embedded across the business. And it really needs to be owned by everyone.

Establishing a line of sight into the CEO, you can't have a function that is aligned with the business. If the CEO if you don't have a line of sight into the CEO, there are so many different structures and ways that DNI functions are organized and it varies from company to company. But if your CDO is reporting solely into your chro, or maybe your head of CSR, and has no interaction whatsoever with the CEO, oftentimes, things aren't moving on the business front, right, it's still again positioned as a check the box initiative. Being diverse from the top, a lot of companies that we've seen who have made significant progress in aligning their DNI function with the business also have diversity at the top of the house. They're not there yet in terms in terms of 5050 parity, but maybe they are further along than others in their industry when it comes to gender diversity and leadership, gender diversity on their boards, a workforce that's more representative of the demographics of the country. So really being diverse at the top is also a core indicator of having a well aligned function. Making DNI, a part of a culture we touched on that piece, and connecting DNI to the company's overall business making sure that it's integrated as a part of your business strategy. Then number six, and this came up quite a bit in terms of CTOs roles and responsibilities, their priorities and their challenges. It was communications and marketing. We found across the board that well aligned functions say that they are pretty well integrated with their marketing and communications functions. And it makes a lot of sense, because companies are really at a turning point. Right, given where we are, and the amount of research there is that quantifies the business case for having a strong diversity and inclusion function. It's no wonder that organizations are prioritizing how they communicate not only externally, but communicate with their employees and their internal stakeholders on the investments they're making. Communication directly ties into an organization's core objectives and goals and DNI as it pertains to recruiting diverse talent. If you're not talking about it, if you're not sharing the investments you're making, making, even if you still have a way to go, then you're not able to best recruit diverse talent, and you're likely losing in the war for talent to some of your competitors, who may be doing some of the same things that you're doing, if not less. The other the second point here is retaining and growing a diverse workforce, particularly at the management levels. And this really goes to employee engagement and employee communications, ensuring that your employees understand that the organization is invested in this space, that they take it seriously, and that they're getting their employees involved as well. And then influencing the industry, right. It's also an imperative that companies who have maybe had some success with some of their DNI programs, or maybe have even had some failures, that they're sharing it, they're talking about it, because no company is doing this well, just yet. Right? Everyone is on a journey. But if you're sharing some of your best practices and examples, you're providing an opportunity for other organizations to maybe take some of those learnings and apply them internally. So it's also about bringing others along on the journey. And as a part of this research, we, you know, just did some focus groups and had some informal discussions with heads of HR and heads of DNI. And again, across the board, what we heard is that the benefit of DNI is just extended with communications. If you don't have an integrated function with your communications and marketing team, you're not reaping the benefits as much as you could be of having a DNI focus. So again, the first quote, if you're not talking about it, no one knows. If you're not communicating about it, then you're losing out on the investments that you're making. And so in closing, I just want to issue a call to action to all of you in a room, whether you are in a DNI role, and more of an official capacity, or maybe you're a member of an employee resource group and or an affinity group at your organization. It's taking some of these learnings back and some of the research and figuring out how to put action in place communicating to your HR and DNI functions on some of the best practices that they can consider as they work to really align the business with DNI.

Thank you so much. And I'm happy to answer any questions if there are any.

Unknown Speaker 34:05

Yes. Oh,

Tai Wingfield | Sr VP | Weber Shadwick 34:14

so I hesitate to say anyone is really doing it well, or is crap and hat yet. But I can cite some specific policies that organizations have implemented that have been making progress. I'd say and actually, the Wall Street Journal did an article about a week and a half ago that looked at which industries are performing well. And ironically, financial services came up at the top. A lot of that has to do with the fact that the financial services industries have been enthralled in a lot of lawsuits over the years and they've really been forced to put some policies and procedures in place that work. But what we've seen both in financial services but also in tech, when it comes To building inclusive cultures, for families, we've seen some progress, we know that the culture is still this kind of around the clock always on culture. But we've seen a lot of advancements in terms of parental leave. Companies really extending and competing for talent by allowing more time for for leave for new parents, for parents that have just adopted a child. And we really see it, we've really seen that driven out of financial services in the tech industries. Similarly, in financial services, that's really where we've seen a start on time financial performance, to DNI metrics. And they're really kind of paving the way for other organizations to start considering putting that model in place. And what's unique is that they're looking at not only progress that has been made once those measures have been put into place, but also are looking at how it correlates to financial performance. So if there is a team that has significantly increased gender diversity at the top or within the workforce, have, they also had better financial performance in comparison to some some of their other teams that are maybe lagging in terms of diverse representation. So we're seeing some really interesting policies and programs that are put into place that are shifting the needle somewhat. But I can't say that any company or any industry is really getting it right. I hope that that changes in the next five or six years as we see more companies investing in this space and appointing CEOs. But right now, it's still very much a work in progress. It's a great question. Thank you.

Unknown Speaker 36:40

Yes,

Unknown Speaker 36:42

that most studios are actually like, do you see this as changing over the next five or six years, that we will actually be more signposted in

Unknown Speaker 36:53

that role?

Unknown Speaker 36:55

And what would you say is the rationale behind a white male we have a goal that it's all about? Yeah.

Tai Wingfield | Sr VP | Weber Shadwick 37:03

So that's a great question. And it's actually something that we pored over quite a bit when we looked at our own numbers, like is this right? And I think so there are a few, a few ways to respond to that, whether or not it changes over the next couple of years. I really think and this goes to the second part of your question, what I really think is, it will change the diversity in terms of racial and ethnic diversity in the CDO position will change once and if we see the makeup of leadership change overall within organizations. And so I don't remember if I touched on this in the slide, but many of our current day CTOs were appointed the role through internal hires, right. So they were either promoted into the role, they were shifted from another business unit into the role of CTOs. And we're just now seeing companies hire externally. But that's kind of a new phenomenon. And so what we hypothesize Is that why we're seeing mostly white men in these roles, is that's been the makeup of leadership. Right? That's just, it's the makeup of leadership. Another part of that, though. And we get a lot of questions. And we got a lot of questions after the research was published, if that's why we think progress has been so slow on the DNI front, because there are diverse, there isn't a diverse array of leaders in the space. And what I have to say, and this is another area that didn't come up in the research, but I'd be interested to dig deeper into it in the next iteration, is there isn't a lot in the way of training to become a DNI professional. A lot of times the strains are sort of the the background and expertise that companies look for someone who has an HR background. And that's important. But beyond that, there are so many other factors that make a successful DNI professional, someone who has a data and analytics background, or maybe a legal background, could all be useful. And so I wouldn't necessarily say that to be successful in a DNI role. You have to be a person of color or a woman. But I would say that the area of expertise needs to expand a bit, and that the qualifications of what's required to be a CDO need to expand in addition to just an evolution of the makeup of our leaders, right. And I think if we see that, we'll see a lot more diversity in in the CDO position. But that was an that was one of two findings in this research that really surprised me. And it's actually not what I've seen in my interactions with CDO, so that was even more surprising. It's a great question. Thank you so much. Happy to talk. Thank you so much time.

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