The DEI road less traveled

How to ensure that diversity, equity, and inclusion is a constant strategic focus of your organization, not a virtue signaling sham.

Diversity consultant and Madison native Kwame Salter has noted there are two paths business organizations have taken regarding diversity — one that features the window dressing of proclamation, promises, and procrastination, and a less traveled but more effective path that features cultural change, accountability, and progress.

But how does an organization move beyond the “window dressing” of merely enacting DEI initiatives without making them a strategic focus? The answer will determine whether your enterprise is serious about making diversity and inclusion a reality and not, as Salter says, “public relations eyewash.”

Diversity initiatives have been around for more than 50 years. Affirmative action was the precursor to diversity but neither achieved the goal of creating diverse, equitable, and inclusive workplaces, leading Salter to note, “I have racked my mind to try to find another highly visible and publicized corporate initiative that could fail repeatedly and yet keep getting rebooted.”

To avoid this definition of insanity, diversity programs must become a strategic focus of business organizations, one that is embedded at every level of a company. Toward that end, we reached out to Salter and the diversity managers of three local organizations to get their take on establishing and maintaining a strategic focus.

To help guide this never-ending work, we spoke to Salter, president of the Salter Consulting Group LLC; Cesar Pinzon, the new vice president of inclusive excellence for American Family Insurance; Jesse McCormick, diversity lead for Epic; and Mindy Begenat, talent acquisition strategist for TDS Telecom. Collectively, they provided these seven tips for making DEI count.

Tip 1: Make DEI a growth strategy

Among the questions Salter asks are: What imperative drives your company’s DEI initiatives? Is the company driven by a moral, legal, or business imperative? Or is your company driven by all three imperatives? While each imperative is valid and important, Salter believes the business imperative is the most impactful.

Citing 2019 research from the McKinsey consulting firm, Salter notes that more diverse companies outperform organizations that are more homogeneous. Companies in the top quartile of gender diversity on executive teams are 25% more likely to experience above-average profitability than their peers. When it comes to organizations that achieved ethnic and cultural diversity, the results are even more dramatic as the top quartile outperformed their peers by 36% in terms of profitability.

And then there is the lost opportunity of minority purchasing power. Black purchasing power, for example, jumped from $961 billion in 2010 to an estimated $1.3 trillion in 2018. Going back even further, the African American market has grown 114% since 2000, and the reason it could be a lost opportunity is that Blacks are most likely to spend more money on clothing, personal hygiene items, and services than other ethnic groups, Salter notes. Companies that “effectively communicate the picture of their personalities and uniqueness are the ones that they choose,” he adds, and therefore, tapping into their growing consumer power — an objective that is aided by a diverse workforce — is good for business.

The same dynamic will apply to growing Hispanic buying power, which could increase to $2.6 trillion over the next three years. Hispanics favor brands that empower their cultural relevance, and according to Salter, they like to see themselves in things that interest them, or in the products they buy. Yet the majority of brands don’t take Hispanics into account, according to a report by LLYC, a digital marketing consultant, and Expedition Strategies, a strategic consulting firm.

Since people of color are very brand loyal and generate trillions of dollars in spendable income, having people working at a company who look like them and have a shared experience is a powerful recruiting tool for any business organization, Salter notes.

Tip 2: Take it from the top

Salter advises using the executive management team — direct reports to the CEO — as a DEI oversight and advisory committee. He notes that the diversity office usually consists of the diversity leader, shared clerical support, and maybe some level of support from other parts of the organization. Too often, these individuals are taken off the traditional career path to become the face and the “flack catcher” for both supporters and detractors of the diversity initiative. Typically, the reporting relationship of the diversity chief is not to the CEO but the reality is that diversity and inclusion are enterprise-wide cultural change initiatives. As such, DEI faces resistance from within the organization, so top-level executives must be involved to ensure that resistance is addressed.

American Family Insurance has had diversity and inclusion efforts for decades, but the company took another step in 2018 when it created an Inclusive Excellence Division, Pinzon says. It was a “very purposeful” approach by senior leadership, starting with former CEO Jack Salzwedel and now continued with equal passion by successor Bill Westrate. “My role, as inclusive excellence vice president, reports directly to the CEO,” Pinzon notes. “Although the position sits and works very closely in HR, that direct correlation and that line to the CEO puts a stake in the ground that we are very committed to driving a culture of inclusion.”

This stake in the ground was anchored to a goal — to increase its diverse population by 50% across all segments of American Family, which now employs 13,500 people. This strategy was approved by its board of directors, stated publicly, and is something all leaders are focused on. “Often times in companies, when you have a leadership change, the focus shifts and somebody else wants to come in and put their own stamp on it,” Pinzon notes, “but I have to tell you, a really thoughtful succession plan meant that the work that we’re doing in inclusive excellence around DEI hasn’t changed.

“The team is still head down, providing insight and guidance ensuring that our policies are aligned, and that the lens of diversity, equity, and inclusion is in all conversations — from hiring to products that we’ve developed,” Pinzon adds.

American Family also has a People, Culture, and Rewards Committee, and Pinzon reports to the board of directors on how DEI is progressing. In addition, the company has an Executive Diversity Council co-chaired by Pinzon and Westrate, and that’s where “we really come together with leaders across the organization, review the results, and hold ourselves accountable,” he says. “These DEI topics, from our perspective, are at every president’s meeting, at every leadership rally across American Family’s footprint, as well as off-site for our presidents’ meeting, and our super-engaged board really believes that this is a business imperative.”

At Epic, McCormick confirms that the work done in support of DEI is interwoven throughout all levels and across all divisions of the company, and it has evolved over time. “I’ve been involved in what we do to support DEI since about 2017, and through that time, we’ve created new programs,” she states. “We look to the literature, but we also talk to experts across the country in a variety of spheres to figure out how the work we do in DEI can be embedded in all the work we’re doing — and embedded in the right way and in support of our initiatives.”

The DEI team works with the executive team to talk about the big picture, strategic focus, and other areas of focus, but they also dig into the expertise of what each division does. For example, they work directly with Epic’s benefits team and its disability employee resource group to make its accommodations process documentation more robust. Epic also has a diversity council and as the diversity lead, McCormick works closely with CEO Judy Faulkner and other leaders who have different focus areas, including software development, recruiting, and personnel. “We try to embed what we do across the company and we try to be a piece of everything,” McCormick says.

Tip 3: Rotate DEI leaders

While there is an argument to be made for continuity in DEI leadership, Salter advises identifying the role of the DEI leader as a rotational assignment for the best and brightest in your organization, including white males who know where the organizational pressure points and pockets of resistance exist. The relevant questions here include: Who individually and collectively will be held accountable? What are the key performance indicators? How are the so-called diverse hires treated after they start work? Is the position of chief diversity officer or its equivalent part of a career path or a dead end?

Any culture shift will necessitate the reallocation of power, values, and resources within the organization, Salter notes. Typically, in the case of diversity and inclusion, resources such as monies for travel, employee resource groups, and staffing are earmarked for the initiative. However, the existing power structure and values of the organization remain intact, so any DEI initiative still must rely on hiring managers to do the right thing when it comes to identifying, recruiting, and hiring under-represented employees. “I want white males to become the leads in DEI,” Salter explains. “They know where the bodies are buried. They know who the racists are.”

Tip 4: Involve everyone

Along those same lines, getting the rank and file involved in DEI, especially the inclusion part, can build and maintain momentum and amplify its benefits. The best way to engage your employees is through affinity groups, sometimes called employee resource groups or business resource groups, and representing various demographics: people of color, women, LGBTQ+, and veterans, etc.

In the past year, TDS Telecom employees created a three-part video series to raise awareness about neurodiversity and provide a better understanding of individuals on the autism spectrum, which came about because of its ABLE Associate Resource Group — a disabilities group. Neurodivergent people represent about 20% of the U.S. population and more than half of them are unemployed or underemployed. “As a tech company, if we’re not focused on that, if we’re not really making sure that we have an inclusive culture and we’re not focused on making sure that neurodiverse individuals are welcome here and included here, we’re just putting ourselves at a disadvantage,” Begenat notes. “Other companies are in the same boat.”

At American Family, they are called business resource groups and they fall within the area of inclusive excellence. “It is probably the biggest thing that we measure, which is an inclusion index … Thousands of employees across all of our operating companies are engaged,” Pinzon says. “Whether that is how you identify within one of those groups or you are an ally who would like to learn more and better understand others’ cultures … this is an opportunity for us to collaborate in different ways. So, our BRGs are absolutely critical, and they continue to evolve.”

According to Pinzon, BRGs help American Family with recruiting because they are among the DEI efforts the company presents to prospective employees: “It really ties to your purpose as an organization,” he notes. “Whether it’s a customer buying a product or an employee working for an organization, they want to make sure the values of that company and the purpose of that organization align with their personal purpose, their personal passion. We use the BRGs as a tool when we’re recruiting employees to say that we have this established. There are places where you feel like you belong.”

In Pinzon’s view, diversity is easy to measure but inclusion is the key piece and it’s harder to measure. So, American Family surveys employees twice a year to capture whether employees feel a sense of belonging, whether they believe they can be their authentic selves, and whether they feel their voices are heard. This has the most direct correlation to overall engagement scores, and it tells company leaders whether their DEI efforts are on the right track and informs them about what, if any, actions are needed. “It’s actually not just being asked to the dance, but being asked to dance,” Pinzon explains.

According to Pinzon, the best idea to drive diversity that come out of the ERGs involves outreach to Hispanic employees. The company broached this topic with its Hispanic/Latinx BRG to better understand the values and diversity within that demographic. While there are some differences, Pinzon says this group is connected by language, food, and values — all of which helped to inform product development and marketing. “We reach out to all of our BRGs to survey them, so we use them as the eyes and ears of the community because they are also our customers,” Pinzon explains. “They are our employees, and they represent that we want to mirror what our communities look like, and so going directly to the source has been invaluable for us.”

At Epic, the focus is on energizing six employee resource groups because they are a good resource-sharing opportunity. Management wants to make sure it’s pushing out information about what’s going on in DEI across the company, and it’s providing a support network. “We’ve done a lot to increase tabling at orientation fairs so that new hires know of the ERGs and have access to them and identity-based groups from day one, making sure they are really connected and building that network,” McCormick notes.

Epic also relies on its ERGs to focus on how the company can learn from them, get that feedback, and get proactive information. For example, its recruiting team has looked for ways to mitigate bias in the recruiting process, but there can always be blind spots, so they have collaborated with the ERGs to expand Epic’s pool of candidates and how they can best support new employees through the onboarding experience. The company’s LGBTQ+ group recommended posting jobs in Our Lives magazine, which has been a good way to expand its local outreach.

The other side of the attraction coin is retention, and when it comes to retaining people of color who arrive in Madison from another region, the retention challenge is acute. While help is on the way in the form of coming attractions such as the Center for Black Excellence and Culture, employee resource groups also play a role by simply helping people make social connections. “Our focus in the employee resource groups is to apportion resources and connect people with information and networks and mentors,” McCormick notes, “but we also offer outside-of-Epic programming to make sure that people can be developing a community, embedding within the Madison community, and really set it as a place where they can be happy long term.”

ERG support is one thing, but Begenat of TDS feels that one mistake companies make is over reliance on their employee resource groups to do the bulk of DEI work, which is not their role. At TDS Telecom, they are called associate resource groups, and outside the capacity of their day-to-day work, their role in DEI is to help build a supportive culture that advances diversity.

Tip 5: In the process, review processes

A true commitment to diversity requires a serious effort to dismantle the systemic racism — Salter uses the term system inequity — in various business practices and processes that lead to inequities such as the pay gap between men and women and between whites and people of color.

In revamping an organization, it’s important to examine every process in the organization, including hiring and how compensation is determined from the very start. Salter once served as a senior vice president for Kraft Foods Inc., which includes former Madison employer Oscar Mayer, and he spearheaded the corporation’s DEI initiatives. He recalls a review of pay practices that found examples of women with higher performance ratings but lower pay than men, and the review also uncovered that men were brought into the organization at higher pay even though there was little or no difference in qualifications. Over time, that means men are going to make more whether or not it’s warranted, so male employees always move ahead. “It’s systemic,” Salter notes.

At American Family, many of the DEI-related process improvements have come in the area of recruitment. In recruiting, Pinzon states, you have to be intentional about where you are looking for talent. “You have to go out to universities, historically black colleges and universities, and make sure you’re investing time supporting those organizations so that an awareness is created but also, you’re giving back,” he explains. “We want folks to understand that you can be comfortable at American Family, that you can be your authentic self every day, and we reward that. For us in the recruiting process, it’s leveraging data analytics, understanding where our future employees are coming from, and engaging them right where they are at.”

Epic is among the employers that worried that boilerplate wording in job descriptions was discouraging people from applying for jobs. To guard against that, the company has done some things on the back end such as changing the questions it asks in the hiring process, McCormick notes. On the front end, it’s changing the way it frames equal employment opportunity language on its website. “Right now, we’re working on an updated draft where we will share that we encourage candidates from a variety of backgrounds to attend, even directly acknowledging the literature that suggests people may not apply for a job they feel they are not qualified for, or if they are from an underrepresented group,” McCormick says.

As part of its DEI effort, TDS realized that because it does business in more than 30 states, it can’t take a one-size-fits-all approach because what works in Madison, Wisconsin isn’t going to work in a rural community such as Hornitos, California. But in marrying business need with diversity, it developed a field service internship program open to everyone, starting at age 16. To build the program, TDS was very intentional about reaching historically underrepresented populations by building partnerships with community organizations, connecting with high schools and technical schools, and working with government employment programs. “As part of the growth of the company, we need people who are in our field services, people who go out and construct our fiber lines and connect those lines to homes and businesses,” Begenat explains. “That’s our most populated business unit and it continues to grow. We needed to be specific in how we were filling those roles.”

Tip 6: Reward diversity champions

When diverse employees are asked to contribute to an organization’s DEI program, and they come through with suggestions that move the needle, rewarding them can provide a strong incentive for everyone to get into the act. Rewards can come in the form of special gifts or direct salary compensation, or both, but the benefits of doing so are potentially enormous.

At American Family, all executive compensation is tied to driving its organizational diversity goal — all the way at the top of the American Family enterprise, Pinzon says. “And that’s to increase our diverse representation by 50%, which will allow us to drive the business results in increased premiums, doing it more efficiently, being more innovative, and just doubling down on our people as the drivers of the success.”

Epic’s McCormick has seen reward benefits first hand, and she can speak to the employee appreciation that results. “I have really appreciated being involved in DEI projects here,” she states. “I have appreciated that what I do in DEI is appreciated just as much as what I do outside of DEI, or what I used to do [primarily in project management] before. At Epic, we are rewarded for our outcomes. We can have great ideas, but we have to actually execute on them, and we have to make sure that we do them in a meaningful way. I appreciate that we do the right thing even if it might be the hard thing, and that we get appreciated and recognized for that.”

Tip 7: Use outside resources

To advance disability inclusion, Epic and TDS have used resources such as job fairs and Disability Equality Index, which has the synergistic acronym DEI. One of the reasons Epic achieves a 100 score on the index is that it has used equitable recruitment tools such as the Madison Area Virtual Diversity Job Fair and the Bender Virtual Career Fair, and both organizations swear by the Disability Equality Index because it offers a comprehensive way to assess an organization’s progress with disability inclusion. “The tool is great because it’s broad,” McCormick notes. “It’s not specific to any one industry, but it really challenged how we think and approached disability inclusion in our workforce in a way that was helpful, and it also allowed us to reflect on things we already do that support inclusion that we may not have codified or been aware of.”

The index helps TDS focus on its disability inclusion goals, which are constantly evolving. “The disability equality index gives us the parameters to say, ‘OK, how were we last year on these questions? Where have we made progress? Where do we still need to make progress?’ Begenat notes. “When we make progress on these things, it not only helps individuals with disabilities, but it makes us a better company for all of our associates.”

Making resistance futile

No matter how committed an organization is to its DEI program, it has to accept and prepare for the strong possibility that hearts and minds may not change even though behavior must align with an organization’s strategic goals. If an organization is to back its diversity statements with effective action, Pinzon and McCormick say the universal benefits of diversity must be emphasized.

“For us, how we address that is through the principles of our community, which are posted on our website, but they are also published on our breakroom walls and our copy room walls,” McCormick notes. “Our executives speak to those during our all-staff meetings. It’s very important for us to have created those.”

Click here to sign up for the free IB Ezine — your twice-weekly resource for local business news, analysis, voices, and the names you need to know. If you are not already a subscriber to In Business magazine, be sure to sign up for our monthly print edition here.