High Impact Diversity and Inclusion: Maturity Model and Top Findings Stacia Sherman Garr, Vice President, Talent and Workforce Research Candace

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1 High Impact Diversity and Inclusion: Maturity Model and Top Findings Stacia Sherman Garr, Vice President, Talent and Workforce Research Candace Atamanik, Manager, Talent and Workforce Research Bersin by Deloitte, Deloitte Consulting LLP

2 Contents Introduction A Roadmap to an Inclusive Culture: The 2017 High-Impact Diversity and Inclusion Maturity Model Six Principles for Building an Inclusive Culture Additional Questions and Discussion Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 1

3 Introduction Copyright 2017 Deloitte Development LLC. All rights reserved. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 2

4 High-Impact Diversity and Inclusion (D&I) A Snapshot of Our Methodology* 245 Number of respondents for this study Respondents were located or had company headquarters in the U.S. or Canada More than 70 interviews were conducted with senior D&I leaders in a variety of industries Data was analyzed using a variety of statistical methods including crosstabs, t-tests, factor analysis, correlations and multiple regression *See Research Methodology for more details. Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 3

5 Trends in Diversity and Inclusion Why Study D&I Now? Global political environment Demographic shifts Globalization of workforce Increasing life spans Rise of networks of teams Need for improved performance What is driving the change in focus? Shifting values Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 4 Source: 2017 Deloitte Global Human Capital Trends Report: Rewriting the rules for the digital age, Deloitte University Press, 2017,

6 Polling question Which of these D&I trends is most important to your organization? 1. Global political environment 2. Demographic shifts 3. Globalization of workforce 4. Rise of networks of teams 5. Shifting values 6. Need for improved performance 7. Increasing life spans Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 5

7 Trends in Diversity and Inclusion What Can We Do in Our Organizations Today? Although many organizations have increased their diversity efforts, organizations remain primarily homogenous, particularly at the executive level. What do organizations need to do differently to become more diverse and inclusive? Instead of focusing on just diversity or on individual diversity programs, organizations should holistically develop their culture to be inclusive. Source: 2017 Deloitte Global Human Capital Trends Report: Rewriting the rules for the digital age, Deloitte University Press, 2017, Copyright 2017 Deloitte Development LLC. All rights reserved. 6

8 What Is an Inclusive Culture? Our Analysis Indicates That It Is Comprised of Four Components We found that a culture in which employees feel they are valued, safe, empowered to grow, and respected is typically an outcome of having an inclusive culture. Organizations with these attributes perform better on a number of critical outcomes, as shown later in this report. Employees feel connected and valued, and that they belong in the culture Employees can present their authentic selves Valued and Belonging Safe and Open Leaders are open to bad news Asking questions is encouraged Leaders are open to new ideas and innovative approaches Employees feel that work outcomes, processes, and communications are fair Employees feel they are treated with dignity and regard by others Respect and Equality* Empowered and Growing Employees have influence over job tasks Teams embrace change Employees are frequently given stretch opportunities Employees who learn new knowledge / skills are valued *These nine attributes were identified from our survey. We did not test two items that are also critical equality and respect. Since these were not in the initial survey, they are not a part of the attributes that predict stronger business outcomes. That said, we believe they are important and would encourage organizations to consider adding them as critical to a culture of inclusion, which is why we have included them here. Copyright 2017 Deloitte Development LLC. All rights reserved. 7 Source: High-Impact Diversity & Inclusion: Maturity Model and Top Findings, Bersin by Deloitte / Stacia Sherman Garr and Candace Atamanik,

9 What Is an Inclusive Culture? (cont d) Our Analysis Indicates That It Is Comprised of Four Components Employees feel connected and valued, and that they belong in the culture Employees can present their authentic selves Valued and Belonging Safe and Open Respect and Equality* Empowered and Growing Copyright 2017 Deloitte Development LLC. All rights reserved. 8 Source: High-Impact Diversity & Inclusion: Maturity Model and Top Findings, Bersin by Deloitte / Stacia Sherman Garr and Candace Atamanik,

10 What Is an Inclusive Culture? (cont d) Our Analysis Indicates That It Is Comprised of Four Components Valued and Belonging Safe and Open Leaders are open to bad news Asking questions is encouraged Leaders are open to new ideas and innovative approaches Respect and Equality* Empowered and Growing Copyright 2017 Deloitte Development LLC. All rights reserved. 9 Source: High-Impact Diversity & Inclusion: Maturity Model and Top Findings, Bersin by Deloitte / Stacia Sherman Garr and Candace Atamanik,

11 What Is an Inclusive Culture? (cont d) Our Analysis Indicates That It Is Comprised of Four Components Valued and Belonging Safe and Open Respect and Equality* Empowered and Growing Employees have influence over job tasks Teams embrace change Employees are frequently given stretch opportunities Employees who learn new knowledge / skills are valued Copyright 2017 Deloitte Development LLC. All rights reserved. 10 Source: High-Impact Diversity & Inclusion: Maturity Model and Top Findings, Bersin by Deloitte / Stacia Sherman Garr and Candace Atamanik,

12 What Is an Inclusive Culture? (cont d) Our Analysis Indicates That It Is Comprised of Four Components Valued and Belonging Safe and Open Employees feel that work outcomes, processes, and communications are fair Employees feel they are treated with dignity and regard by others Respect and Equality* Empowered and Growing *These nine attributes were identified from our survey. We did not test two items that are also critical equality and respect. Since these were not in the initial survey, they are not a part of the attributes that predict stronger business outcomes. That said, we believe they are important and would encourage organizations to consider adding them as critical to a culture of inclusion, which is why we have included them here. Copyright 2017 Deloitte Development LLC. All rights reserved. 11 Source: High-Impact Diversity & Inclusion: Maturity Model and Top Findings, Bersin by Deloitte / Stacia Sherman Garr and Candace Atamanik,

13 Highly Inclusive Cultures Have Better Business Outcomes 6x more likely to be innovative 6x more likely to be agile 2x more likely to meet or exceed financial targets Note: Copyright Outcomes 2017 were Deloitte calculated Development using odds LLC. ratios All rights to determine reserved. the Not likelihood for distribution. of organizations Licensed material. with inclusive cultures performing better on specific outcome variables. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 12 Source: High-Impact Diversity & Inclusion: Maturity Model and Top Findings, Bersin by Deloitte / Stacia Sherman Garr and Candace Atamanik,

14 A Roadmap to an Inclusive Culture The 2017 High-Impact Diversity and Inclusion Maturity Model Copyright 2017 Deloitte Development LLC. All rights reserved. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 13

15 B e r s i n b y D e l o i t t e Our Maturity Model Offers a Roadmap to an Inclusive Culture Level 4 Inclusive Culture 12% Level 3 Leader-Owned D&I 15% Level 2 Programmatic D&I 31% Level 1 Compliance-Focused Diversity 42% Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 14 Source: High-Impact Diversity & Inclusion: Maturity Model and Top Findings, Bersin by Deloitte / Stacia Sherman Garr and Candace Atamanik,

16 Polling Question: Where is your organization on the maturity model? Level 1: Compliance-Focused Diversity Level 2: Programmatic D&I Level 3: Leader-Owned D&I Level 4: Inclusive Culture Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 15

17 How Do You Move from Level 1 to Level 2? Three Ideas for Getting Started Build leader support for D&I beyond compliance Begin to create a broad coalition of individuals engaged with D&I issues Introduce high-impact programs that raise awareness and enable behavior change Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 16

18 How Do You Move from Level 2 to Level 3? Three Ideas for Getting Started Provide leaders with stories and other resources to talk about the positive impact of D&I in the organization Identify specific activities especially critical decision points that leaders can use to reinforce their D&I commitment and make them aware of these opportunities Share D&I metrics with leaders, and provide guidance on what and with whom they can share information Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 17

19 How do you move from Level 3 to Level 4? Three Ideas For Getting Started Communicate in a variety of forums that D&I is business-critical Build in processes to address bias in critical talent activities Hold leaders at all levels accountable for improvement on D&I metrics Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 18

20 Polling Question Any other ideas on how orgs can increase their maturity, not mentioned? <allow freeform text> Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 19

21 Case in Point: General Mills Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 20

22 Six Principles for Building an Inclusive Culture Copyright 2017 Deloitte Development LLC. All rights reserved. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 21

23 Six Principles for Shifting from Delivering D&I Programs to Building an Inclusive Culture Level 1 Level 2 Level 3 Level 4 Delivering D&I Programs Treat D&I as Business-Critical, Not Compliance-Necessary Move Beyond Diversity to Inclusion & Diversity Prioritize Inclusive Leadership High Maturity Building an Inclusive Culture Low Maturity Embed D&I into All Talent Practices Provide D&I Resources That Empower Individuals to Take Action Drive Accountability, Not Metrics Tracking Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 22

24 Six Principles for Shifting from Delivering D&I Programs to Building an Inclusive Culture Level 1 Level 2 Level 3 Level 4 Move Beyond Diversity to Inclusion and Diversity Prioritize Inclusive Leadership Treat D&I as Business-Critical, Not Compliance-Necessary Primary Reason for D&I (respondents selected 3) 39% Embed D&I into All Talent Practices Provide D&I Resources That Empower Individuals to Take Action Drive Accountability, Not Metrics Tracking 17% 4% Fulfill legal compliance requirements 20% Core to the business strategy / drives P&L Level 1 Level 4 Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 23 Source: High-Impact Diversity & Inclusion: Maturity Model and Top Findings, Bersin by Deloitte / Stacia Sherman Garr and Candace Atamanik,

25 Six Principles for Shifting from Delivering D&I Programs to Building an Inclusive Culture Level 1 Level 2 Level 3 Level 4 Treat D&I as Business-Critical, Not Compliance-Necessary Move Beyond Diversity to Inclusion and Diversity Prioritize Inclusive Leadership Embed D&I into All Talent Practices Provide D&I Resources That Empower Individuals to Take Action Leaders Discuss the Value of Inclusion 44% 86% Level 1 Level 4 Drive Accountability, Not Metrics Tracking Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 24 Source: High-Impact Diversity & Inclusion: Maturity Model and Top Findings, Bersin by Deloitte / Stacia Sherman Garr and Candace Atamanik,

26 Polling Question What is the balance in focus on diversity and inclusion at your organization? 1. Very focused on diversity today, with little discussion of inclusion 2. Mostly diversity, some focus on inclusion 3. About 50/50, diversity and inclusion 4. Mostly inclusion, with some focus on diversity 5. Very focused on inclusion today, with relatively little discussion of diversity Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 25

27 Six Principles for Shifting from Delivering D&I Programs to Building an Inclusive Culture Level 1 Level 2 Level 3 Level 4 Treat D&I as Business-Critical, Not Compliance-Necessary Move Beyond Diversity to Inclusion and Diversity Prioritize Inclusive Leadership Embed D&I into All Talent Practices Provide D&I Resources That Empower Individuals to Take Action Drive Accountability, Not Metrics Tracking Senior leaders publicly discuss the organization s D&I vision / purpose / strategy 37% 61% Level 1 Level 4 Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 26 Source: High-Impact Diversity & Inclusion: Maturity Model and Top Findings, Bersin by Deloitte / Stacia Sherman Garr and Candace Atamanik,

28 Case in Point: BMO Financial Group Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 27

29 Six Principles for Shifting from Delivering D&I Programs to Building an Inclusive Culture Level 1 Level 2 Level 3 Level 4 Treat D&I as Business-Critical, Not Compliance-Necessary D&I Competencies Integrated into Talent Management 64% Move Beyond Diversity to Inclusion and Diversity 28% Level 1 Level 4 Prioritize Inclusive Leadership Embed D&I into All Talent Practices Provide D&I Resources That Empower Individuals to Take Action Drive Accountability, Not Metrics Tracking Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 28 Source: High-Impact Diversity & Inclusion: Maturity Model and Top Findings, Bersin by Deloitte / Stacia Sherman Garr and Candace Atamanik,

30 Polling Question Where does your organization today primarily integrate D&I with talent practices? (select all that apply) 1. Talent strategy 2. People analytics 3. Talent acquisition 4. Learning and development 5. Career management 6. Succession management 7. Leadership development 8. Performance management 9. Other Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 29

31 Six Principles for Shifting from Delivering D&I Programs to Building an Inclusive Culture Level 1 Level 2 Level 3 Level 4 Treat D&I as Business-Critical, Not Compliance-Necessary The Organization Provides Resources on Presenting Authentic Self 96% Move Beyond Diversity to Inclusion and Diversity Prioritize Inclusive Leadership 21% Level 1 Level 4 Embed D&I into All Talent Practices Provide D&I Resources That Empower Individuals to Take Action Drive Accountability, Not Metrics Tracking Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 30 Source: High-Impact Diversity & Inclusion: Maturity Model and Top Findings, Bersin by Deloitte / Stacia Sherman Garr and Candace Atamanik,

32 Case in Point: Grainger Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 31

33 Six Principles for Shifting from Delivering D&I Programs to Building an Inclusive Culture Level 1 Level 2 Level 3 Level 4 Treat D&I as Business-Critical, Not Compliance-Necessary Move Beyond Diversity to Inclusion and Diversity Senior Leaders Publicly Discuss Organization s Effectiveness at Achieving its D&I Goals 61% Prioritize Inclusive Leadership 27% Level 1 Level 4 Embed D&I into All Talent Practices Provide D&I Resources That Empower Individuals to Take Action Drive Accountability, Not Metrics Tracking Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 32 Source: High-Impact Diversity & Inclusion: Maturity Model and Top Findings, Bersin by Deloitte / Stacia Sherman Garr and Candace Atamanik,

34 Top Takeaways Organizations with inclusive cultures, when compared with organizations that lack inclusive cultures, are: 6x more likely to be innovative 2x more likely to meet or exceed financial targets 6x more likely to anticipate change and respond effectively Approximately 12% of surveyed organizations have an inclusive culture while close to 40% of surveyed organizations are primarily focused on diversity compliance. Our analysis reveals six principles to becoming a more inclusive organization. Treat D&I as Business-Critical, Not Compliance-Necessary Move Beyond Diversity to Inclusion and Diversity Prioritize Inclusive Leadership Embed D&I into All Talent Practices Provide D&I Resources That Empower Individuals to Take Action Drive Accountability, Not Metrics Tracking Copyright 2017 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material. High-Impact Diversity and Inclusion: Maturity Model and Top Findings 33 Source: High-Impact Diversity & Inclusion: Maturity Model and Top Findings, Bersin by Deloitte / Stacia Sherman Garr and Candace Atamanik,