We live in rapidly changing social, cultural, and economic environments which challenge organizations to be adaptable and ready for change. Of late, organizations across the globe have been called upon to evaluate their organizational culture through the lens of diversity, equity, and inclusion. Organizations today can no longer rely on staff to self-govern when it comes to issues of justice and equality—what an organization permits, it promotes. For this reason, many organizations are seeking to launch their first diversity initiative, but aren’t quite sure where to begin.
Launching a Diversity Initiative
At FEG, we have made a commitment to foster change within our company, community, and industry. We’d like to share our insights from this process with you, as well as some of the strategies our clients—which are largely nonprofits—have found helpful in embarking on this endeavor.
Below is a curated list of some of the questions and ideas we’ve collected since we began our own diversity initiative in 2018. First, an important caveat: we do not claim to be an authority in this space. D&I is an area of study and change to which countless experts have dedicated their lives and careers, we are only beginning our D&I journey and still have a long way to go. However, recognizing that there is always value in information sharing, we thought it would be beneficial to talk about some of the things we have learned and what has been particularly helpful for us in this journey.
What is D&I?
Let’s start with some definitions.
- Diversity refers to those traits and characteristics which make a group unique. There are a lot of ways people can be different, including race or ethnicity, age, sexual orientation, disability, social class, language, culture, appearance, religion, etc. Even more, each individual fits into many different groups, which means that even when looking through a diversity lens, a given population still has a significant amount of heterogeneity.
- Inclusion literally means being included. To be included is to be welcomed and embraced as someone who “belongs.”
Taken together, diversity and inclusion efforts seek to honor, acknowledge, and even encourage diversity within an organization while also ensuring that all voices are heard and all staff feel supported and valued. One important note—it is not appropriate to refer to a person as “diverse,” as that presumes a dominant and non-dominant group within an organization. Instead, operate from the assumption that all staff have diverse identities and that diversity is relational—it’s the differences among those within a team, company, or ecosystem that make them stronger.
As your organization launches its own D&I program, it will be important for you to define what D&I means to you. Make sure your definition is broad and encompassing, and that it helps show stakeholders where you plan to direct your efforts.
I’ve heard DEI and DIB used in conjunction with D&I.
What’s the difference?
A lot of different abbreviations are used to talk about D&I initiatives, which can be confusing, especially when they’re often used interchangeably. There are differences between them, however, and they’re worth pointing out. Harvard Business Review explains that the “E” in D&I stands for equity—fair treatment for all while striving to eliminate inequities and barriers. The “B” in DIB represents “belonging,” the experience of being treated and feeling like a full member of a larger community where you can thrive. While this is similar to inclusion, it denotes a stronger attachment and greater bonds of trust within an organization.
So should your organization focus on D&I, DEI, or DIB? Determining which acronym is the best fit for your organization depends on many factors, such as your objectives, mission, brand, and culture. Although it’s important to understand the differences between these and define for yourselves which you aim to pursue, don’t miss the forest for the trees—ultimately it’s just a label, your actions are what really count.
At FEG, we refer to our diversity initiative as DEI, since this encompasses the full scope of our focus.
What is the value of focusing on D&I?
In 2015, McKinsey published the first iteration of its comprehensive organizational study Why Diversity Matters and found that diversity in organizations attracts top talent, helps support better high-level decision-making and problem-solving, and leads to financial outperformance versus non-diverse peers. Since that initial publication, the gap between diverse and non-diverse organizations has continued to widen, particularly in terms of profitability.
There are many reasons why organizations with a commitment to diversity are significantly outperforming those without such commitments. One reason is that consumers and investors are looking for organizations that share their values. A commitment to diversity signals stakeholders both inside and outside the organization that you care about your employees and your community. Moreover, internal stakeholders (staff), are more likely to bring their true selves to work, increasing your organization’s competency with different groups, leading to more innovation (and less groupthink), and fostering employee engagement and retention.
Is my organization too small for a D&I program?
Whether you have a staff of 5 or 500, no company or organization is too small to have a D&I initiative, especial
Considering that more than half of the employees in the workforce want to see their workplace do more to increase diversity, and 67% of job seekers consider D&I a critical factor when considering employment opportunities. Moreover, as younger generations move into the workforce, it will become more and more diverse simply by default: by 2025, millennials are expected to make up 75% of the workforce and 44.2% classify themselves as non-Caucasian. Diversity is a reality that all businesses will have to contend with, regardless of scale. Thus, even small-scale D&I programs can be impactful and provide a lot of return for minimal investment
This feels like too big of a problem for me to solve. Where do I start?
First, recognize that diversity is not a problem that requires your intervention, it’s a reality that your organization needs to embrace.
Whether you’re starting from the beginning or looking to make strides in an established D&I program, the important thing is to keep making forward progress and be realistic about what you can achieve with the resources you have. Making even a small effort toward progress is better than standing still.
In an article on DIY Diversity, HR consultant firm Korn Ferry recommends starting small by:
- Saying, “I see you” to underrecognized employees
- Removing names from resumes before beginning the review process
- Adding D&I metrics to performance evaluations
- Banning “cultural fit” as a reason for rejecting candidates and partners
- Offering support for employee resource groups for underrepresented populations in the organization.
What if I face resistance?
Resistance to change in general—including D&I initiatives—is not uncommon and should be expected. Change often means discomfort, as people have to adapt to new practices and find new ways of being successful, but it’s also opportunity, because it allows for new ideas and innovations and helps support new approaches to old topics. The goal of D&I initiatives is not to eliminate resistance, it’s to show support for all employees. Here are some strategies to help smooth your D&I journey.
- Solicit feedback from all employees about their concerns, issues, and needs
- Include people from both historically dominant and suppressed groups in all aspects of the program and conversation
- Make processes fair and transparent
- Always come back to your values
- Focus on the successes. In the book, Switch: How to Change Things When Change is Hard Chip and Dan Heath introduce the concept of asking yourself, “What is working and how can we do more of it?” They propose that nearly every change effort includes bright spots—rays of light worth emulating—and advocate finding these rays of light and replicating them for future success.
The great news is that doing these things will help you manage pockets of resistance and will help you develop frameworks of inclusion and equity within your organization that will influence your organizational culture going forward.
FEG's Insight
In 2018, we recognized the need for a formal D&I initiative within our own organization and started the FEG D&I Committee to foster a happier and more interconnected workforce. We are proud to share that we have reached many milestones since then, including working with an external expert D&I partner, Queen City Certify, to bolster our efforts.
Our DEI “bright spots” include:
- Developing employee D&I training which includes training staff to recognize and mitigate “unconscious bias”
- Adopting a strategic diversity lens to evaluate internal processes (including our employee handbook) and ensure they support intentionally building diverse departments, teams, and committees
- Establishing metrics for D&I measurement so that we can demonstrate long-term D&I progress; metrics include a mix of firm demographics, process upgrades, investment manager database, community impact, and a Firm Inclusion Index
- Evolving our review process to focus more pointedly on career path and support
- Launching the CHATS (Conversational Huddles About Tough Stuff) program in which employees come together to discuss challenging topics such as discrimination and biases
- Launching a women’s employee resource group to provide team members with a more formal opportunity for networking, mentorship, development, and best-practice sharing in a male-dominated industry
While we are by no means D&I experts, based on our experience, we recommend starting your own D&I program with the following steps:
1. DOCUMENT OBJECTIVES
Like any major organizational change, creating a document that clearly states your objectives and the steps you plan to take to get there can help rally everyone around the same goals. By creating a charter that clearly depicts the culture you want to foster, you can take an important step forward in showing all of your employees that they’re a valued resource. Here is an example that we used to help you get started.
In addition to creating a charter, you’ll also need to review your organizational handbook and other formal policies through the lens of D&I to make sure they reflect your organization’s cultural values. Among things to take into consideration are:
- Flexible work arrangements
- Promotion process
- Staff selection process for larger projects
- Mentorship opportunities
- Religious floating holidays
- Parental leave
- Adding a nursing mother room
- Offering adoption benefits
You’ll also want to identify which metrics you can track to show that you’re making progress on your initiative. Consider metrics such as:
- Staff demographics
- Process improvements
- Candidate sourcing, evaluation, and onboarding
- Training events
- Community engagement
Although diversity is not a numbers game, data can speak volumes when it comes to tracking your progress. Even if you are early in your D&I journey, you can still identify how you want to measure success in your organization over time.
We track our own progress using the following metrics:
- Diversity among leadership
- Female and minority hires
- Gender equity survey results (facilitated by Queen City Certified)
- Diversity among investment managers
2. COMMUNITY OUTREACH AND ENGAGEMENT
D&I isn’t just about your staff, it’s also about making inroads with your clients/customers/investors and surrounding community. No company is an island, and the more your organization gets involved in the community, the better you can support your D&I goals.
One great strategy is to connect with colleges and universities, many of which offer affiliation groups for various populations (women, LGBTQIA+ individuals, people of color, etc.). Consider speaking at a meeting, or simply attending a meeting so you can spend time getting to know the attendees. The more you learn about different groups, the better you can position your organization to be inclusive and attractive. Colleges offer other benefits as well, such as campus-wide career fairs and departmental lecture series. Finally, many groups are eager for new opportunities to engage with others in their community, so look for opportunities for innovative collaborations that will benefit both the students and your organization.
We have engaged with several organizations to increase our understanding and to support our community, including:
- Hiring underrepresented high school students for part-time work through DePaul Cristo Rey to provide exposure to business and the opportunity to build their skillset
- Sponsoring and attending YMCA Achievers events in support of teen college readiness and career exploration
- Presenting to high school students about personal finance, professional development, and career options
- Teaching elementary school students the basics of financial literacy, entrepreneurship, and critical thinking by volunteering for the University of Cincinnati’s Student Enterprise Program (Step™)
- Partnering with women’s groups, including The Lindner Summer Institute for Women, Girls to Women, and Texas Wall Street Women
We have also contributed our time and resources to the following community organizations:
- ArtsWave
- Dallas Foodbank
- Freestore Foodbank
- March for Babies
- Philanthropy Southwest
- Step™ Student Enterprise
- The Children’s Home of Cincinnati
- United Way of Greater Cincinnati
- Urban League of Greater Southwestern Ohio – Cincinnati
- Walk Ahead for a Brain Tumor Cure
3. COMMUNICATION
Another vital part of our strategy has been communication. Change does not happen in a vacuum, and our change efforts would never have been successful without the onboarding and buy-in of all of our staff.
One thing that has really helped us raise awareness around D&I issues and opportunities is creating a space to share online resources. Our team uses SharePoint to manage our ever-growing list, but there are plenty of alternative options, such as Google Docs, Dropbox, a D&I Slack channel, a dedicated folder on the shared drive, etc. The key is to not let the list grow static. Notify your team as new resources are added to encourage them to revisit the space and engage with the material. Consider holding discussions on some of them, like a D&I book club, or hold brainstorming meetings with staff on ways to incorporate information gleaned from these resources into your own policies/procedures/culture.
We have three groups to help facilitate conversations, including:
- D&I Committee
- Culture Committee
- Women in Investment (WIN) Employee Resource Group
Not sure where to start? You can check out our curated list of resources here.
4. FIND SUPPORT
While the change in your organizational culture has to come from the inside, getting support from outside organizations can provide a measure of perspective and expertise that can ground your own efforts and help guide you toward success. For that reason, we recommend partnering with other organizations to help you assess your D&I status and identify areas of strength and opportunity. Some groups offer organized training that can help you better structure your own efforts, or can provide powerful skills that you can use in disseminating and implementing change. Professionals have the tools to help you evaluate your efforts and strategize next-steps.
5. COMMIT TO YOUR DEVELOPMENT
Maybe it goes without saying, but if you don’t commit to this process, it won’t be successful. Commitment goes far beyond writing a charter or sending out an internal email—it requires an ongoing pledge to uphold the values of D&I, assess your progress, and make adjustments as needed. At FEG, we’ve found that the secret to remaining committed is to embrace an attitude of understanding. Instead of looking at diversity as a numbers game, starting from the position of “I want to understand” helps us engage more fully with our peers and encourages dialogue and personal disclosure. We don’t look at D&I as something we have to do or something that we need to learn, we see it as an opportunity to get to know our team (and ourselves) better. We have become curious about how our worldviews and biases compare, and that has allowed us to open up and become more trusting, all of which has made us a stronger, more connected team.
One step at a time
Making change can feel overwhelming, even on small scale, but it’s important to remember to just take this process one step at a time. Keep staff engaged by encouraging information sharing. Affirm your D&I commitments by engaging in community events. Help other organizations follow in your footsteps by sharing your experience and insights. Most of all, don’t give up. Rome wasn’t built in a day and your organization won’t change overnight, but with slow and steady progress, you can truly make a difference for your employees and your community.
DISCLOSURES
This was prepared by Fund Evaluation Group, LLC (FEG), a federally registered investment adviser under the Investment Advisers Act of 1940, as amended, providing non-discretionary and discretionary investment advice to its clients on an individual basis. Registration as an investment adviser does not imply a certain level of skill or training. The oral and written communications of an adviser provide you with information about which you determine to hire or retain an adviser. Fund Evaluation Group, LLC, Form ADV Part 2A & 2B can be obtained by written request directed to: Fund Evaluation Group, LLC, 201 East Fifth Street, Suite 1600, Cincinnati, OH 45202 Attention: Compliance Department.
Published March 2021