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DEI Matters More Than Ever In The Red-Hot Talent War—Here’s How To Kick-Start Your Journey

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With diversity, equity, and inclusion fueling intense discussion and action in boardrooms and C-suites across multiple industries, we set out to take a closer look at how companies can kick-start their DEI journey--and then build momentum as well as sustain positive results.

As a senior leader, you know that building a workforce characterized by diversity, equity, and inclusion (DEI) is the ethical thing to do. And you’re well aware that doing so delivers vital benefits to your organization—including greater creativity and innovation.

But did you also know that excelling at DEI is essential for winning the talent war that’s currently raging across multiple industries and sectors? That talent war has gone from hot to red-hot, owing to more-extreme-than-ever disruptions—most notably, the impacts of the pandemic and rising attention to race- and gender-based violence.

C-Suite Leaders Speak Up About Disruption

AlixPartners Disruption Index 2021 delivered some sobering news:

85% of participating executives agreed that disruption is the primary strategic challenge confronting business and society today.

59% of the C-suite leaders taking part in the survey acknowledged that their organization has a talent gap that makes them vulnerable in efforts to navigate disruption.

Just 43% of these C-suite leaders described themselves as “very confident” in their organization’s ability to withstand disruptive forces.

Spotlight on Younger Talent

Changing labor-force demographics have made DEI even more of an imperative. Consider the following: The people increasingly making up the lion’s share of the full-time workforce—members of Generation Z and younger Millennials, according to Gallup—want to work for organizations that excel at DEI. This population makes up more than 40% of the U.S. workforce. What’s more, they also want to follow leaders who clearly care about employees’ well-being and who demonstrate ethical behavior.

These young people aren’t just choosing where they want to work based on how well an employer stacks up on DEI. They’re also “voting” with their consumer dollars, factoring a company’s DEI performance into their personal purchase decisions. Equally important, the younger generations widely broadcast their choices of employers and views of companies on social media, which magnifies the impact of their professional as well as personal choices.

Indeed, for members of these age cohorts, DEI is far from a “nice to have”; it’s central to how they define themselves and their professional identities. And increasingly, those identifies reflect intersectionality—whereby people view themselves as members of multiple groups, depending on characteristics such as their ethnicity, gender, race, religious affiliation, age, abilities and socioeconomic background (to name just a few).

2020 Versus 2010: Young People’s Attitudes and Expectations Are Shifting

The JumpStart Advisory Group, which connects talented diverse workers with career-progression opportunities within companies in key industries, compared data on young people’s attitudes and expectations from surveys conducted in 2010 and 2020. Findings show big changes over that decade in the views of people just entering the workforce. For example:

• ↑ Number of young people who think that companies aren’t fulfilling promises about diversity and core values

• ↑ Number of recent MBA graduates who anticipate having 6-8 employers over their lifetime, versus 3-5 employers in 2010

• ↑ Number of young people who value work/life balance, career progression, and developmental opportunities more than pay and other monetary rewards 

Learn more about JumpStart:

Tough Questions

But even if you’re aware of all this and your organization has already started to address DEI, you–like many other senior leaders–may also be grappling with some tough questions to answer. For example:

• How can I exert the greatest possible impact on DEI if my organization has limited resources?

• If my organization is in the earliest phases of our DEI journey, how can we accelerate our progress?

• How can my organization maintain momentum with our DEI efforts, when we’re being constantly bombarded by waves of disruption?

• What are the major pitfalls that DEI programs can encounter, and how can my organization avoid them?

• Where do the biggest future uncertainties lie in DEI, and how can we keep moving forward despite them?

You’re wise to ask such questions, as pitfalls and uncertainties abound when it comes to DEI efforts. For example, companies that narrowly focus on “making the [DEI] numbers” by hitting specific targets risk creating perceptions of positive discrimination (the practice or policy of favoring individuals belonging to groups known to have been discriminated against previously), catalyzing false narratives of “lowering the bar” to increase representation of certain groups, misaligning roles and capabilities, and fueling frustration among new hires if they believe they were recruited merely to satisfy a statistic.

One company in the energy industry, for example, defined new targets aimed at enhancing diversity in its workforce, including increasing the number of women occupying senior ranks in the organization. As many as 40 women were hired to achieve this target. Three years later, all but two of them had left the company. Though the company “got the demographics right,” it didn’t do enough to foster the behaviors and attitudes or establish the processes and systems essential for the new hires to feel welcome or to be effective in their roles. For instance, because others in the organization weren’t informed of–or didn’t share–the vision behind the hiring target, longer-tenured employees concluded that the women executives were brought on board solely because of their gender. What’s more, there was no enhanced onboarding effort (such as a senior-led mentoring program) to help the new hires forge the connections vital for getting a running start in their roles.

As this real case example shows, success with DEI hinges on making sure that your efforts aren’t just a numbers game where you simply bring in talent embodying diversity. That’s inauthentic, and it will only backfire. Employees from diverse groups will spot what you’re doing, and younger professionals especially won’t hesitate to spread the word about it. Equally damaging, using various social media platforms, they’ll influence their peers to steer clear of your organization, opting to work for employers who are genuine when it comes to DEI.

Transformative Leadership: The Cornerstone to True Commitment to DEI

To authentically commit to DEI, you and your executive team first need to master the art and science of what we call transformative leadership. AlixPartners research shows that transformative leaders think, feel, and behave in distinctive ways. Transformative leaders consistently engage in ongoing, honest dialogue and communicate effectively about the most pressing issues facing their organization–including DEI. They are transparent about why DEI is important, and they “walk the talk” day in and day out. Additionally, transformative leaders take decisive action and ensure that employees in their organization have clear visibility into the company’s values, expectations, and decisions. And they set clear but also achievable goals for their organization.

Transformative leaders also maintain a laser-sharp focus on their company’s values and how these values can lead to the creation of greater contributions for society. They’re open to new information, even if it forces them to change how they’ve long thought about important issues such as diversity. That openness, in turn, enables them to adapt as their company’s circumstances change while always keeping the strategic end goal in sight.

What is most distinctive for transformative leaders is their proficiency in emotional intelligence. These leaders are not afraid to show compassion for others—or for themselves. They want to create an inclusive environment where employees can bring more of themselves to work, so they are able to empathize with employees’ personal challenges. Maintaining high standards, they also embody authenticity (being true to themselves), humility (holding a modest view of their own importance), and equanimity (remaining calm and composed when things around them seem to be falling apart).

Honing transformative leadership traits in yourself and your senior team will help you start building a solid baseline for the kind of treatment younger workers especially expect from their senior leaders. Pulling your team together along these lines can create a powerful base to build from. This base will comprise processes, systems, standards, and expectations ensuring that employees from diverse groups feel truly welcomed and supported in your organization. As a result, they’ll see a future for themselves with your enterprise and will conclude that it’s worth their while to stay.

Don’t Look for a Magic Elixir

CEOs who cannot communicate and connect with others in their organization as transformative leaders are less likely to have their DEI efforts taken seriously. And that can hamstring their company’s ability to make progress with DEI. But beware of any temptation you may be feeling to look for a magic DEI elixir that will deliver immediate results: There isn’t one. Rather, building and benefiting from a diverse, equitable, and inclusive workforce starts with you–specifically, your ability to change your mindset. Drawing from our experience with clients and with our own organization, we offer these suggestions:

• Accept that getting good at DEI is a multiyear journey, not a “one and done” project or program.

• Understand that “inclusion” is about more than changing the demographics (numbers) in your organization–and that it’s not enough in itself. To achieve true “diversity,” you must also change behaviors and attitudes in your company; for example, through education and honest dialogue that fosters awareness of what diversity is and why it matters, encourages positive role modeling, and promotes shared values.

• In addition to modifying behaviors and attitudes, you also have to set up the right infrastructure–processes and systems that enable employees from diverse groups to succeed. Examples include programs that help promising talent to prepare for advancement into higher-level roles.

• Intentional efforts of inclusion, along with measurable and sustainable outcomes–such as number of people from diverse groups who excel in their roles, employees’ feeling valued plus a sense of belonging, or loyalty of your most valued employees–matter much more than how many people from different groups are in your workforce.

• There is no “one-size-fits-all” approach to recruiting for DEI. Your approach must be adapted to your organization’s unique circumstances and needs. Be suspicious of any so-called “rule book” about how to recruit [fill in any group name here].

The year 2020 presented all of us with a moment of reckoning—ignited by protests over race- and gender-based violence amid political unrest and panic fueled by the fast-spreading virus. Like many, your organization may have engaged in intensive information gathering, organizational culture audits, and listening tours—in short, “organizational introspection”—with an eye toward discovering what workers want from you, your leadership team, and your organization. If you haven’t already done so, now’s the time to act on all that information you gathered, or do more with it.

Make the mindset changes described above, starting with yourself and your senior team, and you’ll be well positioned to accelerate your company’s DEI journey and take steps to ensure that your results endure long into the future—even as the forces of disruption and the faces populating workforces continue to change.

Questions for Your Next Moment of Introspection

How do you stack up as a transformative leader? Take stock of your behaviors, your thoughts, and your emotions. Where would you like to improve?

• What DEI assumptions and mindsets have you tended to hold? How willing and able are you to alter those assumptions and mindsets?

• Where is your organization in its DEI journey? Just starting out? Well on its way? Experienced? What have you learned so far from your efforts?

Stay tuned for Part Two in this three-part series—where we’ll examine how leaders who have started their DEI journey can gain traction to generate even better results.



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