Chief Diversity Officer: The Toughest Job in Business

One of the toughest jobs in business is the Chief Diversity Officer.

Why? The Chief Diversity Officer (or Chief Advocacy Officer) is responsible for an enormous topic: the end-to-end diversity, inclusion, and fairness in the company. And this covers a wide set of issues: recruiting, promotion, pay, team behavior, senior leadership, and day to day personal interactions.

Don’t get me wrong, Diversity is an important business strategy. Companies with diverse boards outperform their peers; diverse teams are more innovative and creative; and diverse companies attract more diverse job candidates and customers.

But this job, the Chief Diversity Officer, is a tough one. And here is why.

First, Diversity is a management strategy, not an HR program.

While many CDOs are buried in HR, the essential topic of fairness and diversity is part of the management culture. So I actually believe this role should report to the CEO.

And even if it does, this person needs to think about the problem as a top to bottom strategy, not a set of “programs.” Yes, you can change the way you hire, develop pay equity reports, create employee resource groups, and drive metrics for success. But without the CEO and top management team’s buy-in, the program has a limited impact.

Look at where we are today. Only 5 Fortune 500 CEOs are black and the metrics on Asian, Women, and other diversity dimensions are pale. At Amazon, for example, Blacks make up 26% of the workforce but 8% of the managers. At Apple, 9% of employees are Black, yet only 3% of leadership. And research shows that while 91% of S&P 500 companies have D&I programs, only 14% have diversity targets for managers. We aren’t pushing hard enough.

There are companies that excel at diversity, and that’s usually because it’s essential to their business. Companies like Sodexo, AT&T, Kaiser Permanente, and Marriott really have no choice. Their customers are diverse; the markets they serve are diverse; so their management and people are diverse.

I’m reminded of the story of Schneider Electric, which is a Paris-headquartered French company originally run by white executives in France. As the company’s business in China, India, and the United States grew, the management team realized they needed products, sales, and service localized to these countries. So they split the company into four headquarters (Paris, US, China, India) and started a massive program to hire and promote local talent in each country. The result was an amazing diversity strategy, one that has paid off many times over.

Scotiabank went through the same soul-searching when they started doing business in Spanish speaking countries. And global organizations like IBM, which have country businesses which run like local countries, have been diverse for decades. When I worked for IBM in the 1980s it was one of the most diverse and inclusive companies in the world. Chevron, another global company that needs a highly diverse workforce, has done the same.

Given the business need, the Chief Diversity Officer cannot be a “solution” to diversity, but rather the lightning rod, program leader, and strategist working with the management team. So if you hire a Chief Diversity Officer and ask him or her to “make the company more diverse,” you’re putting them in a very difficult situation.

Second, Diversity and Black Lives Matter are different.

Let’s not confuse a diversity strategy with the problem of #blacklivesmatter. They’re different.

While there are 9 dimensions to diversity (age, gender, religion, sexual orientation, race, ethnicity, class, disability, and nationality), the issue of Black Injustice is special. It takes a particularly unique set of approaches.

Black Americans suffer a uniquely traumatic problem – one based on 400 years of injustice, prejudice, and discrimination. As James Baldwin discusses in The Fire Next Time , the problem we face here is one of income and educational inequality, trauma, and systemic racism. As Baldwin describes the narrative, Black Americans don’t hate white Americans, they just want white people to get out of their way. White Americans, by contrast, feel threatened – of economic displacement, violence, and change in status.

What does this mean for the Chief Diversity Officer? They have to open up the lines of communication.

In our latest Pulse of HR survey we asked 800+ professionals what they thought their company could do to improve racial justice. The #1 answer (crowdsourced) was to “encourage and engage in dialogue about the systemic racism that holds back minorities and women.” This was followed by “getting buy-in from change champions, especially white men,” and by “fixing structural gaps through compensation, hiring, succession, and managerial capability” and “being less scared to discuss race issues.”

Yes people want programs, but what we need on this topic is better dialogue, and this is what Chief Diversity Officers have to do.

Last week I talked with the head of talent for NetApp, one of the most successful tech companies in Silicon Valley. The most valuable thing they’ve done in this topic is have a series of open discussions from the Black Employee Group in the company, sharing their feelings and perspectives. It was enlightening and educational for everyone, and is helping the company move forward on this issue. And the CEO and top management team is involved.

The Chief Diversity Officer cannot just be a black business person who champions the cause. He or she has to break down the walls of communication and get people talking about what’s on their minds.

Third, there’s good consensus that Diversity training is not enough.

If you think the Chief Diversity Officer will train managers and leaders, you won’t be doing enough. Research shows that training increases awareness and sensitivity, but it does not change behavior.

Why? We’re all biased in some way – often driven by family, upbringing, or personal experience. While it’s very useful to learn about our bias, it takes practice and process to change. (I’ve taken some Virtual Reality bias training that really stuck with me, but these types of programs are still rare).

I think about it this way: diversity in business is like a safety program. If you had a series of accidents in your company (resulting in lawsuits and fatalities), you would create a systemic program of work redesign, communications, training, metrics, and rewards. When I worked at Exxon, for example, there was a 1 minute “safety discussion” at the beginning of every meeting and you were not even allowed to skip stairs on the stairway, because it could result in a fall.

Diversity should be treated the same way. A violation should not be tolerated. And a new set of reporting systems (Vault, for example), let people report misconduct, abuse, or harassment in a completely confidential way.)

At one company I interviewed there are “diversity committees” that review every decision to hire, promote, or change pay. These managers are held responsible for making sure diverse candidates are treated equally and have the right to “undo” or “audit” a decision at any time.

Many companies have targets, which actually seem to help. In my early career we had Affirmative Action, and these programs moved the needle. And some companies even tiei CEO pay to diversity measures. Satya Nadella, CEO of Microsoft, has a sixth of his bonus tied to diversity measures. Dara Khosrowshahi, CEO of Uber, now has a fourth of his performance-awards tied to diversity. But overall, consultants believe fewer than 3% of executives have any pay tied to this goal. 

Fourth, Analytics are now here to help.

Finally, we now have an enormous opportunity to use analytics. You can look at hiring patterns, pay practices, and promotion patterns by manager or business unit and immediately see the impact of bias. One CHRO told me she already knows the “racist managers” in the company by looking at the data – her problem is figuring out how to have conversations with these people.

As Google’s diversity report reveals, companies can really apply analytics to this problem. Here, for example, is Google’s diversity in leadership. While the company is 52% White overall, 66% of its leaders are White, so not only is Google under-representing non-Asian minorities in most roles, it is highly biased against diversity in leadership. 

If you look at Google’s leadership vs. total diversity measures, Asians are 29% less likely to be leaders, Blacks are 30% less likely, Latin Americans 37% less likely, and Whites are 27% more likely to be leaders. This type of data makes it easy to push for change.

Google Diversity in Leadership

Workday and SAP-SuccessFactors, by the way, offer off the shelf Diversity Analytics tools designed to help spot these problems.

Helping Make Chief Diversity Officers Successful: Our Chief Diversity Officer Working Group

Starting in August, as part of our Big Reset Initiative, we will be conducting a Five Week Executive Working Group,  dedicated to the topic of diversity, inclusion, and black injustice.  The group will focus on how these issues have been exacerbated because of the pandemic and what organizations should be doing to bring about lasting, real changes to support equity.   This group will also help us formulate ways the Josh Bersin Academy can build programs to support HR professionals within their own organizations to bring about true workforce equity

If you lead diversity in your company or you are an HR leader and would like to join, please email us. There is no cost to this program, and in five weeks (one hour week) I guarantee you’ll learn a lot.

Chief Diversity Officers are among the most passionate people in business, and they face a difficult and complex job. There are more than 4,000 such leaders in the US today and the turnover rate is high. Let’s all work together to help drive this issue forward.

Please join us. Together, as one, we will push the ball forward and drive unity into our organizations and society.