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Developing an effective diversity, equity, and inclusion (DEI) strategy is essential for modern companies – not only for ethical reasons, but also because of the significant financial benefits. A well-implemented DEI strategy ensures that every voice is heard and creates a sense of belonging and trust among employees. This significantly increases retention rates, with companies committed to inclusivity seeing 5.4x higher retention rates than their competitors. In addition, inclusivity is a key factor for job seekers: 75% consider it crucial when choosing an employer.
Despite these benefits, it can be difficult to quantify the individual impact of DEI initiatives. Many programs do not show their true value until they mature and require sustained effort and patience to achieve high returns. Yet persistent challenges such as insufficient executive buy-in and a lack of action to address internal metrics often undermine these efforts.
Effectively addressing these challenges requires strategic leadership and consistent 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 related to DEI, is challenging and requires more than just initial buy-in to successfully implement. It is critical to assess whether the organization is ready for the open and honest dialogues that are essential to any progress in DEI efforts. The role of the CDO is critical to driving DEI initiatives and ensuring that these initiatives are integrated into the company's core goals. However, the success of these programs depends heavily on the availability of dedicated resources and support. With only 12% of DEI leaders having a dedicated team, many initiatives face significant hurdles from the start due to this lack of support.
With that in mind, companies need to talk about workforce changes and conduct an internal assessment of what's working well—and what's not. Identify gaps in talent, experience, perspectives, and more. Assess whether the workforce represents the community or consumer the company serves. If not, what can be done to change that? Perhaps building a more inclusive pipeline can improve diversity. Perhaps onboarding needs an overhaul. Training can raise awareness, but for the initiative to be effective, employees must be given the tools to apply their learning in the work environment.
2. Commit yourself to God
Creating a diverse and inclusive workplace requires broad organizational commitment and a clear seat at the decision-making table for DEI discussions. Initiatives shouldn't rest on the shoulders of a single person or team; they require the collective effort of the entire company. Without broad support, DEI efforts risk becoming superficial and merely checking a box without promoting true inclusion or embedding these values into the fabric of the organization.
That's why organizations need to walk the talk and truly commit to DEI. This often means equipping DEI leaders with the resources necessary to launch and sustain a DEI program. A prime example of this is Salesforce, which has successfully embedded DEI into its corporate strategy, resulting in tangible benefits such as increased employee engagement and better financial performance.
For any company, engaging in DEI initiatives requires a mindset shift, especially to help other leaders at the C-suite see DEI as an investment rather than a burdensome cost. Make it a group effort involving the entire leadership team. Sit down with everyone and look at existing policies and processes. Review compensation, benefits, and more. Is everything equitable? Inclusive? Is anyone being excluded? Clearly defining what DEI means to the company, understanding its importance, and articulating how it fits into daily operations is critical to ensure meaningful and sustainable progress.
Related topics: How to promote diversity, equality and inclusion in your workplace
3. Take action
Conversations are good. Difficult conversations are even better, but talk and awareness only take an organization so far. Even if it's just one piece of a much larger DEI puzzle, start the initiative and communicate across all channels. Make sure people are invested in the outcome.
The sense of belonging and psychological safety that comes with working in a more diverse environment also encourages people to share new ideas. Diverse perspectives can also drive innovation and lead to more profitable solutions. A McKinsey study found that companies with ethnically and culturally diverse leadership teams are 25% more likely to achieve higher profitability than comparable companies. In addition, social values are playing an increasingly important role in purchasing decisions, giving rise to the so-called inclusive consumer who only buys from companies that practice positive social values.
4. Demonstrate the effect
DEI leaders can measure success by partnering with functional leaders and taking dual responsibility for quantifiable goals. The question then remains: what goals should be measured? This decision will be critical to ensuring DEI programs remain a priority for every organization. Of course, profitability will be at the top of the list. Other metrics to track include:
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Diversity of the applicant pool
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Diversity of the hiring committee
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Changes in underrepresented groups within the organization
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Employee turnover
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Diversity in leadership
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Employee engagement
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Job satisfaction
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Suppliers and sellers
One company that successfully measures and demonstrates the impact of DEI is Accenture. This is evident in its DEI strategy, which includes clear metrics and accountability. Accenture tracks detailed metrics such as representation of women and ethnic minorities in the workforce, diversity of the leadership team, and the inclusion of diverse suppliers. These efforts have helped foster a more inclusive company culture while positively impacting market performance and innovation capabilities.
Related: Why companies fail in their diversity, equity and inclusion efforts
The research should be reason enough to support the importance of DEI, but that's not always the case. Many organizations want to see immediate results, which isn't possible. DEI takes time to become mainstream across the organization, and those entrusted with the leadership will need a lot of determination and a ton of grit to pull it off—not to mention the numbers associated with the return on investment. Ultimately, though, CDOs are creating a better future, and that's not an easy path.
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