Opinions expressed by Entrepreneur contributors are their own.
Crafting an effective Diversity, Equity and Inclusion (DEI) strategy is essential for modern businesses — not just for ethical reasons but also for significant financial benefits. A well-implemented DEI strategy ensures every voice is heard, creating a sense of belonging and trust among employees. This boosts retention rates significantly, as companies committed to inclusivity see retention rates 5.4 times higher than their peers. Moreover, inclusivity is a key factor for job seekers, with 75% considering it crucial when choosing an employer.
Despite these advantages, quantifying the individual impact of DEI initiatives can be challenging. Many programs show their true value only when they reach maturity, requiring sustained effort and patience to yield high returns. Yet, persistent challenges, such as insufficient C-suite buy-in and failure to act on internal metrics, often undermine these efforts.
Addressing these challenges effectively necessitates strategic leadership and rigorous execution from Chief Diversity Officers (CDOs). These leaders play a critical role in bridging the gap between recognizing the broad benefits of DEI and implementing actionable strategies. To optimize DEI initiatives and ensure their integration into corporate strategy, CDOs should consider the following key steps.
Related: Is This Diversity and Inclusion Concept the Missing Link for Real Change?
1. Conduct an internal assessment
Organizational change, especially regarding DEI, is challenging and requires more than just initial buy-in for a successful implementation. It’s critical to evaluate whether the organization is ready for the open and honest dialogues essential for any progress in DEI efforts. The CDO’s role is crucial in driving DEI initiatives forward and ensuring these initiatives are integrated into the core goals of the business. However, the success of these programs heavily depends on the availability of dedicated resources and support. With only 12% of DEI leaders having a specialized team, many initiatives face significant hurdles from the start due to this lack of support.
With this in mind, companies need to discuss the changing workforce and conduct an internal assessment of what is working well — and what is not. Identify gaps in talent, experiences, perspectives and more. Assess whether the workforce represents the community or the consumer that the organization serves. If not, then what can be done to change that? Perhaps building a more inclusive pipeline can improve diversity. Maybe onboarding needs an overhaul. Training can build awareness, but people must be given the tools to apply their learning in the work environment for the initiative to be effective.
2. Commit to DEI
Creating a diverse and inclusive workplace requires a comprehensive organizational commitment and a clear seat at the decision-making table for DEI discussions. Initiatives should not rest on the shoulders of a single person or team; they require the collective effort of the entire company. Without widespread support, DEI efforts risk becoming superficial, merely ticking a box without fostering genuine inclusion or embedding these values into the organization’s fabric.
This is why organizations must walk the talk and truly commit to DEI. That often means providing DEI leaders with the necessary resources to institute a DEI program and see it through. A prime example of this is Salesforce, which has successfully embedded DEI into its corporate strategy, resulting in tangible benefits like increased employee engagement and better financial performance.
For any business, committing to DEI initiatives will require a change in mindset, especially to help other leaders in the C-suite view DEI as an investment rather than a pesky cost. Make it a group effort involving the entire leadership team. Sit everyone down and look at existing policies and processes. Review compensation, benefits and more. Is everything equitable? Inclusive? Is anyone left out? It’s crucial to clearly define what DEI means to the organization, understand its importance and articulate how it integrates with everyday operations to ensure meaningful and sustained progress.
Related: How to Promote Diversity, Equity and Inclusion in Your Workplace
3. Take action
Conversations are good. Tough conversations are even better, but talking and awareness will only get an organization so far. Even if it’s just one piece of a much larger DEI puzzle, launch the initiative and communicate across channels. Get people invested in the outcome.
That sense of belonging and psychological safety of working in a more diverse environment has a way of empowering people to share new ideas, as well. Diverse perspectives can also help drive innovation, leading to more profitable solutions. A McKinsey study found that companies with ethnically and culturally diverse executive teams were 25% more likely to deliver greater profitability than their peers. Additionally, social values have become a greater factor in purchase decisions, giving rise to what’s known as the inclusive consumer, who buys only from organizations that practice positive social values.
4. Demonstrate the impact
DEI leaders can measure success by partnering with functional leaders and having dual accountability for quantifiable goals. The question then remains: What goals should be measured? This decision will be critical for ensuring that DEI programs remain a priority for any organization. Of course, profitability will top the list. Other metrics to track include:
Diversity of the applicant pool
Diversity of the hiring panel
Changes in underrepresented groups within the organization
Employee turnover
Diversity of leadership
Employee engagement
Job satisfaction
Suppliers and vendors
One business successfully measuring and demonstrating DEI impact is Accenture, as seen with its DEI strategy that includes clear metrics and accountability. Accenture tracks detailed metrics such as the representation of women and ethnic minorities in their workforce, the diversity of their leadership team and the inclusion of diverse suppliers. These efforts have helped foster a more inclusive company culture while positively influencing market performance and innovation capabilities.
Related: Why Companies Are Failing in Their Diversity, Equity and Inclusion Efforts
Research should be reason enough to show the importance of DEI, but that’s not always the case. Many organizations want to see immediate results, which isn’t a possibility. It takes time for DEI to catch on companywide, and those who’ve been trusted to lead the charge will require a lot of resolve and no shortage of grit to see it through — not to mention the numbers associated with the return. In the end, however, CDOs are creating a better tomorrow, and that’s never an easy road.
