Evolution of Diversity
At its annual roundtable with chief diversity officers, The Network Journal gets a close-up look at diversity efforts at leading public, for profit and non-profit organizations, and how the people who lead those efforts do their job. Below is an excerpt of TNJ’s exclusive conversation with this year’s panel of CDOs: Kevin L. Antoine, J.D., State University of New York (SUNY) Downstate Medical Center; Deborah A. Elam, General Electric Co; Marsha Ellis Jones, PNC Financial Services Group Inc.; and William H. Harper III, Pacific Gas and Electric Co.
TNJ: What has brought about the elevation of diversity to the point where we now have a chief diversity officer title?
Antoine: Broadly, the increase of what used to be called minority or underrepresented populations. In a very short time those combined populations will be the majority population in the United States. So the number one cause is demographics. It’s from that demographic profile that we draw our domestic workforce, so you’re also going to see the demographics of the workforce starting to change drastically in the next 30 years.
Also, there are new laws with respect to compliance and regulatory agencies, especially since President Obama has been elected. There are more specific executive orders if you’re a federal contractor and that has elevated the importance of what companies do in responding to these developments. In the healthcare setting in particular, those factors include the workforce demographics. Where I work, our workforce is almost 70 percent African, African-American, African-Caribbean and Hispanic, and Asian-American. Our patient population is also diverse. The fact that our patient population reflects our workforce population is just one of the other factors that have combined to create the need for the role of chief diversity officer. Along with that, the Joint Commission on Accreditation of Healthcare Organizations now has a new accreditation standard for hospitals that talks about providing health care that’s culturally competent to your diverse populations. The combination of those factors in general, but more specifically in health care, actually created the demand to have chief diversity officers.
Ellis Jones: Relative to the financial services industry, my perspective is similar to what has already been expressed pertaining to the shift in the demographics of the U.S. population; particularly when you consider the emerging majorities. For PNC, it is a matter of what makes good business sense. This particular population will control 25 percent of the U.S. purchasing power by 2014 and by 2042, which will increase to 33 percent. That means, in order for us to thrive within that environment, we must begin to create a plan to meet the financial needs of this new majority and start now to develop relationships with these potential customers. In addition, we have to make sure we have the workforce that mirrors these demographics in the communities we serve. Given these factors, organizations need to have an individual in place who is leading its diversity and inclusion strategies and initiatives across the organization. It is similar to the way a chief risk officer, chief talent officer, or chief technology officer lead their areas of expertise because each of those particular strategic areas has come of age within corporate America.
Elam: We’ve had this role for about 15 years. Six or seven years ago, it was elevated to a corporate officer position, which puts it in the top 190 people in the company. The reason for that was the sustained belief that the stature, strategic importance and critical nature of the role needed to be recognized. As with anything in a corporation, recognition at this level makes it easier to get stuff done throughout the corporation. The other thing I would say in our case is that the role has been focused on growth. At GE, we see diversity as a competitive advantage in the global marketplace. My role is to ensure that we attract the very best talent globally and that our talent is combining different ideas and experiences to deliver the best possible results.
Harper: Diversity is integral to PG&E’s core values and our strategy. It allows us to better anticipate, understand and satisfy the needs of the 15 million diverse Californians we serve. It enhances our ability to compete for the best new talent and build stronger teams. It’s also a sound investment in the future health of the communities that our business depends on. In recent years, we have increased our commitment to diversity and inclusion, appointing a chief diversity officer, providing diversity and inclusion training to all officers, directors, managers, superintendents and supervisors, and increasing our focus on identifying, developing and recruiting diverse talent and creating an inclusive culture where that talent can thrive.
TNJ: Do you have the buy-in on diversity at all levels — those above you, those who are your peers and those below you?
Elam: We clearly have a buy-in at the top. I look for what I call the “calendar test”: do people spend their time and energy on what they say is important? Time and energy are scarce resources, so if they’re spending time on diversity, then it must be important. For all of our national affinity network events, we start with our chairman and his direct reports. They all attend. They may not attend every single event, because we have a lot of different events going on globally, but the chairman attends the big events every year and has done so since he’s been chairman, as do the vice chairmen. Then I look to metrics and governance. Our diversity council meets quarterly and the chairman and I co-chair that. This is a big commitment of time. When I get to the next level down in the organization, they buy in as well. Where we are challenged is often when we have acquisitions, or new groups of people coming into the company, who may or may not be from an organization that takes diversity as seriously. There’s a learning curve in these instances, but it doesn’t take long to really see that this is important and that you do have the overall support from our most senior leaders.
Ellis Jones: I have been at PNC for approximately two and a half years and am, in fact, PNC’s first diversity officer. The role was created as a result of the commitment by the CEO and PNC’s board of directors to ensure there was a consistent focus on diversity and inclusion. As a result, I have a high level of support, starting with the senior executive committee, to the management committee, to middle management and ultimately to our individual employees. The management committee is comprised of 40 representatives of various lines of business who act as executive sponsors for both our employee business resource groups (EBRGs) and line-of-business diversity councils. These individuals are actively involved in many of the business issues taking place within the company. Our middle managers are involved in the diversity and inclusion initiatives through our partnership with Gallup. We are one of the few financial institutions that have participated in Gallup studies to gauge both our employee engagement and inclusion index metrics.
Antoine: I’m the first chief diversity officer at the State University of New York Downstate Medical Center. I found that I had to establish a learning curve for senior management because they were very unfamiliar as to what the role should be, how it should evolve, how it should be staffed, or how it should be organized. These were teachable moments for me with the senior leadership. Since I’ve been here we’ve established a Women’s History Committee, established the first Martin Luther King Jr. Leadership Award, the International Diversity Film Series and the Diversity Faculty Development Committee. That sort of exposure and growing of the office stood well with us in getting the necessary buy-in and keeping the buy-in with senior management.
Harper: Celebrating and respecting our diversity is one of PG&E’s five core values. It is therefore an expectation that all PG&E employees behave in a way that support our values. Our 20,000 employees take pride in holding themselves to high standards in supporting diversity and inclusion. Diversity strengthens and empowers us to anticipate, understand and respond more effectively to the needs of our customers. This is essential for PG&E’s future success and for us to compete in an ever-changing global marketplace. It gives us a competitive advantage over other companies that fail to recognize the importance of embracing diversity and inclusion.
TNJ: Given that buy-in, how does your institution measure its diversity success?
Harper: At PG&E, we set our aspirational goals around diversity and inclusion to align with both the overall company goals and business priorities. We look at best practices of leading companies in diversity and inclusion for guidance in developing our goals. My team works with the senior leadership of the company and considers stakeholder feedback in the goal-setting process. Each major line of business has workforce and supplier diversity champions. These champions work with leadership to create action plans that are aligned with the company strategy while customized for the needs of the line of business. They also monitor progress and provide regular updates. Senior leaders are held accountable for their progress by the president and CEO. Achievement of diversity and inclusion goals is a factor in the performance evaluations and therefore the compensation of our leaders.
Antoine: On the hospital side, the Joint Commission Accreditation standards require the measuring of diversity through a myriad of factors, including compensation. We have within the senior structure of the medical center administration diversity at the highest levels. The president of the medical center in an African-American male and the CEO of University Hospital of Brooklyn is an African-American female. As a federal contractor we annually submit to the federal government an Equal Employment Opportunity report that lists our demographics.
Ellis Jones: Our partnership with Gallup enables us to measure engagement and inclusion of every employee and every manager of people. These measurements are taken twice a year in the retail business and once a year, enterprisewide. They serve as a very strong barometer on the progress we are making in diversity and inclusion across our organization. In addition, we set demographic objectives for each of our lines of business to address the growth we want to achieve in representation, retention and the promotion of women and people of color. We also have a strong focus on the military and those with disabilities.
We measure employee engagement because we feel that an engaged employee leads to higher productivity and ultimately, greater profitability. To make sure our employees are engaged and our managers are creating an inclusive environment, we also have an inclusiveness index measurement. We measure the growth and sustainability of our EBRG groups because we believe it is important for that to be sustainable. This helps us develop a strategy to assist EBRG members with professional development and community outreach. We have a focus on what we call our collaborative marketing approach that helps us as we work with each of our regional presidents in our growing markets. We gain an increased understanding of their geographic demographics, market share and percentage of growth, which can be directly tied to the increase in demographic outreach, new business and cross-sell opportunities of our products and services.
In essence, there are a number of measurements we take into account. I will characterize them in two ways: first, quantitative measurements of the “hard” business case that is going to drive revenue; and second, the qualitative measurements of the “soft” business case that is going to enhance human capital engagement.
Elam: At our core, GE is a manufacturing company, so we have a lot of rigorous processes around measures, input measures being hiring, retention and promotion, and output measures being voluntary attrition. We track these metrics by level, by business, and by ethnic and gender demographics. We also track veterans, primarily in the U.S. From an employee engagement standpoint, we do an opinion survey every other year. We look at the engagement index by ethnicity and gender. It was during the financial crisis that we did this for the first time, and we found that our ethnically diverse employees had a higher engagement index than the overall population. I think it’s because we provided a lot of vehicles for connectivity through our affinity networks. We had monthly conference calls or webinars on all kinds of topics — career development, professional development, weathering the storms, leadership resilience — and I think people were glad and felt connected, it was a source of information, something to plug into to. If there is one thing that we do at GE, we measure.
TNJ: How do you see diversity evolving?
Antoine: For higher education, diversity is going more international. Because of the funding for state-supported colleges and universities, you’re going to see a partnering with overseas institutions with American institutions that will give the American institutions more access to capital, more access to funding. You’re also going to see more Americans going abroad for higher education, probably more at the undergraduate level than at the graduate or professional or doctoral level. That’s twofold. The most valued commodity from America with respect to the global market is education in United States. A lot of the emerging countries are modeling their higher education after the American model. So diversity is moving beyond the boundaries. Back in the day, the civil rights people used to say, “Once you start something, you can’t stop at the door.” We started diversity in the United States and we’ve been a model and a beacon for countries around the world. We can’t stop at the door.
Elam: The evolution that I’m going to reference actually started a few years ago, and that’s when our chairman very astutely said that the window for focusing solely on traditional U.S. diversity is closing; we’ve got to figure out how to do diversity in the context of the global marketplace. A few years ago, we started to try to figure out how to make this link and ensure all of our U.S. diversity pieces were relevant in a globally growing company. So in all of our affinity networks, we began to connect to some of GE’s global initiative. Our African-American Forum for example is helping to drive the company’s growth in Africa, our Asian-Pacific American Forum is doing the same in China and India, and our Hispanic Forum in Latin America. At GE, we believe that when one person grows and improves, we all grow and improve, and that’s not limited to just one geography. We need to take what’s applicable of U.S. diversity experience and customize and localize it to other regions of the world. In doing so, our opportunity for growth and ability to help deliver results becomes so much more relevant than it is today both to individuals and our companies.
Ellis Jones: As the U.S. population and workforce demographics become more diverse, domestic corporations will have to continue to develop and enhance strategies to effectively engage diverse employees, diverse customers and diverse communities. As a result, the utilization of an inclusive lens within each area of our corporate businesses will become the norm for successful organizations
Harper: Diversity and inclusion has moved from an area of compliance to one of strategic advantage. Our work at PG&E has evolved as well. Our Employee Resource Groups began with a social and networking focus, but have evolved to being strategically aligned with the company goals with a focus on professional development and community outreach. Inclusion is a much greater and core strategy element now. We’ve realized that diversity is only a strategic advantage within a culture of inclusion — both for employees and for customers. In recent years, we’ve gone from a focus on counting people to a focus of leveraging diversity via a culture of inclusion. Diversity has gone from a discussion of race/ethnicity and gender to one of diversity of thought, background and experience.
It is very clear that attracting and developing diverse talent is critical to the success of any business. True talent is indeed scarce. It’s about growing the workforce of the future via public/private partnerships to keep youth in school and advancing onto college and into skilled trades. It’s about attracting and retaining talent through the demonstration that your company is a great place to work. It’s about creating a culture that provides challenge and connectedness while enabling effective problem solving and innovation. It’s a connected web where you must be aware of all of the parts as a whole organism. Although you may strategically emphasize one area for a period of time, you can never let go of the others lest you fall behind overall.