ReimagineHR: 4 Emerging Themes in Diversity and Inclusion

ReimagineHR: 4 Emerging Themes in Diversity and Inclusion

At the CEB’s ReimagineHR event in Washington, DC, last Wednesday, over 60 diversity and inclusion leaders and other HR leaders came together to discuss where their organizations were in their D&I journey and how best to continue advancing it. Participants in Wednesday’s session answered a series of live survey questions and engaged in a dialogue with panelists Nellie Borrero, Senior Global Inclusion and Diversity Managing Director at Accenture, and Karen Wilkins-Mickey, Director of Diversity and Inclusion at Alaska Air Group, Inc.

The conversation focused on strategy and metrics as well as branding and communications. Although D&I leaders continue to face many of the same issues raised in last year’s peer benchmarking session, a few new themes emerged from the conversation on Wednesday:

1) D&I Leaders Must Align Their Efforts to the Organization’s Values

Gaining buy-in for advancing D&I is still a challenge for many D&I leaders. However, some organizations have found success by embedding D&I efforts into business objectives. When D&I is connected to initiatives or goals the organization already values, senior leaders come to see how it relates to their day-to-day work. One participant said their organization does this by tying measurements of diversity and inclusion to business results in order to communicate the impact of D&I on the business.

Organizations beginning their D&I journey may be tempted to move quickly to get to the more progressive D&I initiatives, but skipping foundational steps such as aligning D&I efforts to organizational values can slow down their ability to move forward in the future. “Don’t jump the gun in your D&I journey,” Wilkins-Mickey said. “Even if you are a senior D&I professional, if your company is new to this space, you need to meet them where they are.”

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Wells Fargo Takes on Culture Change in Wake of Scandal

Wells Fargo Takes on Culture Change in Wake of Scandal

After the fake-accounts scandal that shook Wells Fargo last year, the bank’s board of directors took decisive action to mitigate the damage and punish those responsible, clawing back tens of million of dollars in stock awards from Carrie Tolstedt, the retiring executive who led the unit where the alleged misconduct occurred, and former CEO John Stumpf. Even more importantly, the bank overhauled the compensation scheme that may have enabled the unethical sales practices at the heart of the scandal and enlisted a law firm to conduct an independent investigation into how these practices came about.

The findings of the investigation, released in April, attributed the emergence of these practices to fundamental problems in Wells Fargo’s business culture, in which executives were subject to too much autonomy and too little oversight. This flaw enabled senior leaders to ignore or minimize problems with the bank’s sales culture and performance incentives until they spiraled out of control.

The challenge for Wells Fargo now is to change its culture to ensure that these bad practices don’t resurface. At Fortune, Geoff Colvin takes an extensive, fascinating look into the cultural course correction the bank’s new CEO, Tim Sloan, is currently in the midst of undertaking:

On Jan. 1 he instituted a new incentive compensation plan in the retail bank that pays employees on the basis of customer satisfaction and achievement of team goals, among other measures, but not product sales goals. The branches aren’t “stores” anymore; they’re branches. No one in the company gets evaluated on products per customer, and after almost 20 years, the company no longer reports that number to investors.

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Diversity Lags in University Science Faculties; Is Accountability the Answer?

Diversity Lags in University Science Faculties; Is Accountability the Answer?

At the Atlantic last week, Ed Yong looked into a troubling trend in academic science, where more and more people from underrepresented groups are earning PhDs, but the representation of minorities on university science faculties is not improving at anything near the same rate:

Kenneth Gibbs Jr., an immunologist and science-policy expert at the National Institute of General Medical Sciences, … gathered figures on the numbers of Ph.D. graduates and assistant professors in the science departments of medical schools throughout the country, from 1980 to 2014. The data were stark. During that time, the number of newly minted Ph.D. holders from underrepresented groups grew by nine times, but the number of assistant professors from those groups grew by just 2.6 times. No such gulf existed for well-represented groups like whites and Asians; there, the Ph.D. graduate pool grew by 2.2 times while the assistant professor pool rose proportionally, by 1.7 times. …

But why does the gap exist? Donna Ginther from the University of Kansas wonders if it’s partly because Gibbs focused on medical schools, most of which do not guarantee salary with tenure, and so might be unattractive when compared to other alternatives. Perhaps scientists from minority groups are just seeking employment elsewhere. Gibbs counters that this is unlikely, since almost every sector of academia struggles with faculty diversity. Hiring practices are a likelier culprit.

University science departments not only fail to hire underrepresented minorities; they also do a poor job of retaining them; Gibbs’ research shows that even if these departments were to become substantially better at recruiting minority professors, their diversity won’t improve unless those professors get the support they need to stay.

The problem here may be one of accountability. Are these universities holding themselves and their peers accountable for having a diverse workforce that represents the population they serve? If not, how can they do so?

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How HR and Strategy Can Get Along When it Comes to Change

How HR and Strategy Can Get Along When it Comes to Change

On Thursday, CEB was privileged to host a group of CHROs and heads of corporate strategy from Fortune 500 companies to address one of the most common and most important challenges executives face today: how to more effectively manage change.

At CEB, we have examined more than 400 major, distinct organizational changes (such as restructuring, market expansion, or merger or acquisition) and found that only one third of these change initiatives have delivered against the goals that were set up at the start of the change. One of the executives at Thursday’s gathering described the challenge thus: “We have built our change management strategies for an Industrial Age, but we are living in a Digital Age.”

While we often point the finger at poor strategic planning for these failures, in fact, this was only the culprit in 10 percent of failed change initiatives. The vast majority of the time, changes fail because we don’t execute them well. As one head of strategy put it: “They know where they want to go, they just don’t know how to get there”.

To build the roadmap to get there, the group identified three strategies that they wanted to pursue:

Separate the desire to change from the capacity to change.

Many companies feel the need to change, and start down several paths without asking a fundamental question: Can we make this change happen? Companies can do this more effectively by identifying the capacity and execution barriers the company faces before the change is actually made by conducting “pre-mortem” sessions. The best companies create a team before a change to identify all of the places where it could break down, where capacity constraints exist, and then build change management strategies to avoid them.

Shift leader behaviors by telling them what not to do, rather than what to do (at least at first).

Most change initiatives require leaders to engage in new behaviors. To achieve this, most companies start by adding items to leaders’ plates, which overwhelms their ability to engage in the new approach. The best companies are more explicit and start by telling leaders what to stop doing before they add new responsibilities. Even if the timing doesn’t work to eliminate before adding, companies need to be explicit about what leaders should stop doing to enable them to make the needed changes in behavior.

Engage managers and the workforce by pushing decision-making and accountability to where the work happens.

While this increases variability (and potentially cost) across the organization, the payoff in terms of achieving change management goals more than makes up for that. One company shared with the group how they stopped using PowerPoint decks to communicate and empower employees. They have replaced that communication strategy with using pictures and drawings to represent the change. This approach has made it easier for employees to understand the direction of the company and how employees fit in it. As a result, employees felt more empowered to make decisions.

(CEB Corporate Leadership Council members can access a range of resources on how to develop more effective change management strategies and empower HR to lead change here.)

A Culture of Risk Is a Culture of Accountability

A Culture of Risk Is a Culture of Accountability

In CEB’s recent pulse survey, the CEO 20, which looks at the top 20 questions CEOs are asking their heads of HR, we found that accountability was the single biggest attribute CEOs want to see more of from their organizations, even more than innovation. In the profile we recently featured of Microsoft’s head of HR Kathleen Hogan, there’s an intriguing passage that connects to that finding:

The goal is to make Microsoft more innovative, nimble and resilient by encouraging diverse ideas and thoughtful risk-taking, says Hogan. That means saying “I’m going to be open, I’m going to listen, I’m going to take risks,” she says. “If I fail fast and get smarter, that’s OK. In fact, if I’m not failing … maybe I’m not being bold enough.”

Any time there’s a failure or mistake that is made, someone suffers, be it colleagues or customers. So in a more risk-tolerant culture, who is accountable for making things right?

The challenge companies like Microsoft have in increasing smart risk taking is how the nature of accountability changes in a more risk-tolerant environment, which is often ignored. So when we hold people accountable in the same way but push them to take on more risk, they and the organization are more likely to suffer negative consequences.

Failing fast may be a cooler topic to write about because accepting failure sounds taboo, but it’s pointless without a concurrent conversation around redefining accountability. It’ll be very interesting to see how Hogan and CEO Satya Nadella continue to evolve performance expectations around contributions, in a way that ensures employees are properly held accountable.

That is a critical next step—and perhaps the next great innovation—coming out of Microsoft’s culture transformation.

Good Layoff Leadership Starts With Hiring

Good Layoff Leadership Starts With Hiring

In an interview with First Round Review, startup advisor and leadership coach Beth Steinberg discusses her approach to the delicate matter of layoffs and how she has learned to treat them as a people issue, not just a business issue, and something to plan for well in advance:

“Layoffs are first and foremost about your people: those who will be let go, those who remain with the company, and the leaders who guide the company through the process. So while it’s a business decision, what’s in motion are the people you’ve hired and have helped you build,” says Steinberg. “Every company wants leaders who naturally understand and guide their company according to this principle. But even the most capable leaders can falter when emotion, inexperience and pressure come into play. That’s why you need a process that orients leaders and couples attentive management with a thoughtful plan.”

Steinberg still remembers the experience that shaped her current philosophy toward layoffs because it caught the entire company off guard. “It was my first HR leadership position at a very early stage startup. Over 18 months, we grew from about 50 to over 300 people. Headcount went unchecked as we went after a business model we thought worked,” she says. “Turns out we didn’t have the model to justify our team. We needed to get our burn rate down immediately. The layoff strategy was haphazard; some decisions were based on performance, team, popularity. Thinking back, it was entirely the wrong approach in every possible way.”

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Why Corporate ‘Diversity’ Is Failing, and How to Fix It

Why Corporate ‘Diversity’ Is Failing, and How to Fix It

Recently, a series of op-eds from NPR, the New York Times, and Salon have declared the term “diversity” defunct—another addition to the long list of corporate buzzwords that feel good to say but mean nothing in practice. As Anna Holmes, writing for the New York Times Magazine, put it:

When the word is proudly invoked in a corporate context, it acquires a certain sheen. It can give a person or institution moral credibility, a phenomenon that Nancy Leong, a University of Denver law professor, calls ‘‘racial capitalism’’ and defines as ‘‘an individual or group deriving value from the racial identity of another person.’’ It’s almost as if cheerfully and frequently uttering the word ‘‘diversity’’ is the equivalent of doing the work of actually making it a reality.

Holmes’ and others’ palpable frustration is understandable. Decades of investment in corporate diversity and inclusion initiatives have yielded little measurable impact. As companies increasingly accede to requests that they release their statistics on diverse representation, it is clear that the state of diversity and inclusion at many of the world’s largest organizations is abysmal. This is as true in Silicon Valley as it is in Hollywood, on Wall Street, and across the globe. So why are corporate diversity and inclusion efforts stalling despite the best of intentions and ongoing investment?

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