A Presentation by Dr. Edward E.
Hubbard
The Diversity Scorecard: How to Drive
Measurable Performance and Results
Dr. Edward E. Hubbard• 10/19/2009
1
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• Copyright © 2009
•
•
•
•
•
B Ed
By
Edward
d E.
E Hubbard,
H bb d Ph.D.
Ph D and
d Hubbard
H bb d & Hubbard,
H bb d
Inc.
Organization and Human Performance Consulting
Corporation
1302 Holm Road
Petaluma, CA 94954
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1
A Presentation by Dr. Edward E.
Hubbard
Introduction
• This workshop is designed to help you
learn and determine what counts when
measuring diversity
• All organizations, whether profit or nonprofit, depend on their ability to get the
best possible return on dollars invested.
• The diversity measurement approach
used in this workshop will be both
practical and experiential
experiential. Most of our
work will involve using basic arithmetic.
3
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Objectives
• Learn how to select the right “mix” of
measures for your Diversity Scorecard
• Understand some important
considerations for linking your
scorecard to strategy
• Determine what measure you might
use in a four-stage diversity change
model
• Examine a sample Diversity Scorecard
and Its Metrics
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Hubbard, Inc. All Rights Reserved. 707763-8380 Confidential and Proprietary
Property of Hubbard & Hubbard, Inc.
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2
A Presentation by Dr. Edward E.
Hubbard
Building the Diversity Measurement
Business Case
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Requests for Measurement of ROI is
Increasing
• Budgets are under increasing review
• Congressional
g
mandates on federal agencies
g
• Competitive pressures on costs and
productivity in the private sector
• Accountability in all functions is increasing
• Managers and others are asking: “What’s the
impact of our efforts in diversity? Do they add
value?
• Top executives are requiring ROI information
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Hubbard, Inc. All Rights Reserved. 707763-8380 Confidential and Proprietary
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3
A Presentation by Dr. Edward E.
Hubbard
Diversity Definitions
• Diversity
> “A
A collective mixture characterized by
differences and similarities that are applied
in pursuit of organizational objectives”
(Dr. Roosevelt Thomas, Redefining Diversity, 1999)
• Diversity Management
> “The process of planning for, organizing,
di ti
directing,
and
d supporting
ti th
these collective
ll ti
mixtures in a way that adds a measurable
difference to organizational performance”
(Dr. Edward E. Hubbard, How to Calculate Diversity Return on Investment, 1999)
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7
Sample Diversity Mixture Categories
• Workforce Diversity (Group and Situational
Identities)
> Race, Gender, Ethnicity,
y Physical
y
Ability,
y Sexual Orientation, Age,
g
Parental Status, Economic Status, Geographic Background) etc.
• Behavioral Diversity
> Work Styles, Thinking Styles, Learning Styles, Communication
Styles, Aspirations, Practiced Beliefs/Values, Attitudes and
Expectations
• Structural Diversity
> Cross-functional Teams, Alliances and Interactions across Levels,
Hierarchy, and Divisions, Teamwork, Acquisitions, Mergers, etc.
• Business Diversity
> Diverse Customer Markets, Supplier Diversity, Global Diversity
Strategies, Diverse Community Relations, Productivity, Customer
Service, Cycle Time, Innovation, Labor Market Realities, Societal
Expectations, Business Cultural Norms, etc.
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Hubbard, Inc. All Rights Reserved. 707763-8380 Confidential and Proprietary
Property of Hubbard & Hubbard, Inc.
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4
A Presentation by Dr. Edward E.
Hubbard
Diversity and Service Profits
Employee
Loyalty
Customer
Loyalty
Growth
G
th
&
Profits
Employee loyalty is related to customer loyalty, which in turn
is related to company growth and profits.
Source:Service Profit Chain, Haskett, Sasser, and Schlesinger, 1997
Hubbard & Hubbard, Inc. © 2009 All Rights Reserved.
9
Diversity & Performance
• Sears found that every 5 percent
improvement in employee attitudes
drives a 1.3
1 3 percent improvement
in customer satisfaction and a .5
percent growth in store revenue.
• This accounted for $200 Million in
a year
•
Source: (HBR Article: Rucci
Rucci, Kirn
Kirn, and Quinn
Quinn, 1998)
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Hubbard, Inc. All Rights Reserved. 707763-8380 Confidential and Proprietary
Property of Hubbard & Hubbard, Inc.
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5
A Presentation by Dr. Edward E.
Hubbard
Cultural Competence and High
Performance
• Research by Kotter and Haskett defines strong cultures
that have a significant impact on a firm’s long-term
economic performance as those that include at least
these elements:
• Emphasize all key managerial constituencies
(customers, stockholders and employees) and
leadership from managers at all levels concerning them
• Emphasizes goal alignment among all employees
• Emphasize shared values and behaviors among all
employees
• Emphasize involving people in decision making and
recognizing their contributions
•
Source: J. Kotter and J. Haskett, “Corporate Culture and Performance”
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Cultural Competence and High Performance
• Research by Kotter and Haskett found
that over a 12 year period, companies
with high performance cultures
outperformed their more average peers
by:
•
•
•
•
Four times in revenue growth
Eight times in employment growth
Eleven times in stock price growth
Seven hundred and fifty times in
net income growth
•
Source: J. Kotter and J. Haskett, “Corporate Culture and
Performance”
Hubbard & Hubbard, Inc. © 2009 All Rights Reserved.
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Hubbard, Inc. All Rights Reserved. 707763-8380 Confidential and Proprietary
Property of Hubbard & Hubbard, Inc.
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6
A Presentation by Dr. Edward E.
Hubbard
Diversity is a Dollars & Cents Issue
• Exercise: What is the
Total Purchasing
Power Byy Diverse
Group?
•
•
•
•
•
•
Asians $_______________
Hispanics $____________
African Americans $_____
Native Americans $______
Gay and Lesbian $______
People with Disabilities $
$_
• Write in your estimates
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Linking Diversity to Organizational Strategy
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Hubbard, Inc. All Rights Reserved. 707763-8380 Confidential and Proprietary
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A Presentation by Dr. Edward E.
Hubbard
H&H Diversity Strategic Theme
Worksheet Multicultural Product
Development
Strategy Map
Financial
Perspective
p
Customer
Perspective
Internal
P
Perspective
ti
Learning &
Growth
Perspective
Diversity Scorecard Metrics
Measure
Target
Diversity Initiative
•Grow Revenue from
New Products
•Annual Revenue
Growth in Target
Segment
•Percent Revenue
from New Multicultural
Products
+25%
30%
•XX
•XX
•Multicultural
Customer Retention
•Share of Account
80%
40%
•Multicultural Relationship
Management
•Gain Sharing Program
$AAA
$BBB
•First to Market
•Time to Market
75%
9 Months
•Annual Multicultural
Product Expo Initiative
•Development Cycle Time
Reengineering
$CCC
$DDD
•Specialized
Competency
Availability
•Key Diverse Staff
Retention
100%
95%
•Competency Model
•New Hiring & Retention
Program
•Diversity Training for
Managers & Supervisors
•Benefits Program
$EEE
$FFF
$GGG
Total Budget
$HHH 15
Innovative
Products
•Satisfy Customer
Needs for State-of-theArt Capabilities
Stable
High-Talent
Workforce
Action Plan
Diversity
Objective
Revenue
R
Growth
World-Class
Internal
Product
Development
Adapted from the Book: The Diversity
ROI Analytics Model by Dr. Edward E.
Hubbard, Global Insights Publications,
Petaluma, CA, 2008
•Accelerate New
Multicultural Product
Development
•Acquire, Develop, and
Retain Strategic Skills
Hubbard & Hubbard, Inc. © 2009 All Rights Reserved.
Budget
What’s Driving the Need for DROI
Accountability in Your Organization?
• Key Business Accountability Drivers
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Hubbard, Inc. All Rights Reserved. 707763-8380 Confidential and Proprietary
Property of Hubbard & Hubbard, Inc.
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8
A Presentation by Dr. Edward E.
Hubbard
Causal Model of Diversity Climate, Performance,
and Results
Product / Process /
Job Design
•Results
Environment and
Market
Demands
Managerial
Behavior
Org’l
Climate
•Aroused
(motivated)
Behavior
Performance
•Market
Impact
•From Book: How to Calculate Diversity Return On
Investment (DROI) -Dr. Edward E. Hubbard, 1999
Business Goals /
Strategies / Systems
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Identifying What to Measure
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Hubbard, Inc. All Rights Reserved. 707763-8380 Confidential and Proprietary
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9
A Presentation by Dr. Edward E.
Hubbard
Measurement Focus Areas
• Creating A Diverse
Work Force
• %R
Representation
t ti
• % Turnover
• # Job offers/Refusals
• Length of Stay/tenure
• % Voluntary
Terminations
• $ Recruiting Costs
• Valuing A Diverse Work
Force
• Culture,
C lt
V
Values,
l
and
d Wk
Wk-life
lif
- % Favorable Response
• # Language of the
Workplace - Multilingualism
• Types of workers - part/full
• % Utilization of work-life
benefits/ initiatives
• Leadership
behaviors/practices
19
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Measurement Focus Areas
•
Managing A Diverse
Work Force
•
Leveraging A Diverse Work
Force (utilization)
•
•
# Promotions
# Movement of Career
Paths
Cutbacks/hiring freezes /
downsizing/mergers/globa
l diversity/acquisitions
# Succession Planning
Performance Reviews
# Reasonable
Accommodation
$ Litigation Costs
% Employee Satisfaction
•
•
% Customer Satisfaction
# Market segments - sales
marketing opportunities
Community/ corporate image
% Success/failure in foreign
cultures and markets
# Innovation/creativity
% Supplier
pp
diversity
y utilization
•
•
•
•
•
•
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Hubbard, Inc. All Rights Reserved. 707763-8380 Confidential and Proprietary
Property of Hubbard & Hubbard, Inc.
•
•
•
•
20
10
A Presentation by Dr. Edward E.
Hubbard
Sample MetricLINK® Automated
Calculations
•
•
•
•
Revenue Factor (OE)
= Revenue/Total FTE
Diversity Survival and
Loss Rates = Survival:
18mos Stayers/Hires for
period
Diverse Hire
Performance Impact =
Avg Job Perf Rating% +
% Promoted w/in 1 year
+%R
Retained
t i d after
ft
1year/3
•
•
Diverse Candidate
Accession Rate =
Diverse Add Hires +
Replacement Hires /
Head Count
Human Capital Value
Added = Revenue Gen
- (Operating Expense [Compensation Cost +
Benefit Costs])/Total
Group FTE
And a wide range of
additional metrics…..
21
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Critical Success Factor Audit Map
Diversity Initiatives / Objectives
Critical Success Factor
Key Indicator Metrics
Graphic
CSF
Metric
CSF
Metric
CSF
Metric
Name of the Initiative / Objective
Metric
Percent of Utilization
Quality of Care Rating %
Employee Satisfaction
Number and %of Children
Enrolled
Absenteeism Rate %
Worklife Balance: Day Care Services
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Hubbard, Inc. All Rights Reserved. 707763-8380 Confidential and Proprietary
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Focus Group Feedback
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11
A Presentation by Dr. Edward E.
Hubbard
Build Your Own Scorecard
23
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Diversity Scorecard Exercise
Creating
Valuing
Managing
Leveraging
Your Measures Your Measures Your Measures Your Measures
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Hubbard, Inc. All Rights Reserved. 707763-8380 Confidential and Proprietary
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12
A Presentation by Dr. Edward E.
Hubbard
Source: The Diversity Scorecard by Dr. Ed
Hubbard
Financial Impact
Diverse Customer / Community Partnership
To achieve our
vision, how
should we
appear to our
diverse
customers and
the
community?
Objectives
Measure
s
Targets
To succeed
financially,
how should we
appear to our
shareholders?”
Initiative
s
Objectives
Objectives
Measure
s
Targets
Initiative
s
needs, what
should our
workforce
reflect?
To motivate
our workforce,
how will we
sustain a
productive
work climate?
Vision
and
Strategy
Objectives
Measure
s
Initiative
s
Targets
Objectives
Measure
s
Targets
Initiative
s
Learning and Growth
Diversity Leadership Commitment
To achieve
our vision,
how will we
sustain
leadership
accountability?
Targets
Workplace Climate / Culture
Workforce Profile
To meet
customer
Measure
s
Initiative
s
To achieve our
vision, how
will we sustain
our ability to
change and
improve?
Objectives
Measure
s
Targets
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Initiative
s
25
The Diversity Change Measurement Strategy
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Hubbard, Inc. All Rights Reserved. 707763-8380 Confidential and Proprietary
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13
A Presentation by Dr. Edward E.
Hubbard
Hubbard Diversity 9-S Framework
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Automated Diversity Measurement and Planning
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Hubbard, Inc. All Rights Reserved. 707763-8380 Confidential and Proprietary
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14
A Presentation by Dr. Edward E.
Hubbard
MetricLink® - Automated Performance
Measurement and Tracking Software
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Sample Diversity Value-Added Report
•
Human
Capital
Dashboard
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A Presentation by Dr. Edward E.
Hubbard
Sample Diversity Value-Added Report
•
CrossTraining
Impact
Analysis
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Sample Diversity Value-Added Report
•
Turnover
Reduction
Impact
Analysis
y
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A Presentation by Dr. Edward E.
Hubbard
Sample Diversity Value-Added Report
• Workforce
Culture
Analysis
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Creating a Diversity Scorecard Will Allow You
To…..
•
•
•
•
•
•
•
•
•
Assess progress, urgency, and impact
Increase awareness, skill, and productivity
Impro e str
Improve
structures,
ct res processes and ssystems
stems
Discontinue / expand initiatives
Approve diversity initiatives/projects (if pilots)
Build database on diversity results
Enhance management understanding and support
Improve measurement skills of diversity staff
Achieve corporate,
p
, business unit and individual g
goals
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A Presentation by Dr. Edward E.
Hubbard
How to Reach Us
• Web: www.HubbardNHubbardInc.com
•
• Hubbard & Hubbard
Hubbard, Inc
Inc.
•
International Organization and Human Performance Consulting
Corporation
•
•
•
•
1302 Holm Road
Petaluma, CA 94954
Tel. 707-763-8380
Fax: 435-674-1203
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