Diversity Executive - November 2008 - (Page 26)

Measuring diversity and inclusion’s impact on the bottom line requires clear planning and recognition of the inherent complexity of measurement. In theory, creating a blueprint to measure success is simple, but the practice presents challenges. By Mike Prokopeak Determining the bottom-line impact of diversity and inclusion can be as easy as a few quick calculations. Ed Hubbard, president and CEO of human performance consultancy Hubbard & Hubbard, quickly works through a series of math problems about a client study he conducted. The study surveyed employees to ﬁnd out what percentage of an eight-hour day is not spent on critical work due to real or perceived workplace barriers. While answers ranged between 9 and 90 percent, Hubbard said 25 percent was the score given most often by respondents. “Twenty-ﬁve percent of an eight-hour day is two hours per day, per person,” he said. “Doesn’t sound like a lot. You take that two hours per day per person and you take an average wage of $12. So now it’s $24 per person. You take 5,000 people, that’s $120,000 per day. That translates to about $31.2 million a year in terms of lost productivity cost.” After factoring in statistical estimates of error and barriers not related to diversity, Hubbard said the client’s cost equated to about $11.9 million per year. “If you had an $11.9 million loss in any other part of the business, what would you do?” he asked. “Would somebody’s head roll? Would you change operational process to recapture the $11.9 million cost? Certainly you would.” In many cases when it comes to diversity, the root causes of that cost to business aren’t addressed. Based on his work with clients, Hubbard has identiﬁed 7,000 strategic measures to quantify the bottom-line impact of diversity. But because the impact often is hidden beneath many layers of organizational culture, process and structure, measurement can be a complex challenge. Not the Same Old Song While it may be daunting, the measurement focus is necessary for the practice of diversity and inclusion to mature as a core organizational strategy. Deborah Plummer, chief diversity ofﬁcer at the Cleveland Clinic and author of the Handbook of Diversity Management: Beyond Awareness to Competency Based Learning, said it’s a natural progression of the ﬁeld from its roots in afﬁrmative action and social justice to a results-based focus. “It became, ‘What’s the business rationale? What’s the business case for diversity?’” she said. “To add meaning or add value to the organization, it really had to show how it contributed to the business objectives.”

Table of Contents Feed for the Digital Edition of Diversity Executive - November 2008

Diversity Executive - November 2008 Editor’s Letter Contents Leadership Connections Guest Editorial Diversity Executive Online Middle Management Roadblock ‘Hidden Winds’ Hinder Progress The Domino Effect Supplier Partnerships Unlock Economic Opportunities Measuring Diversity Special Section: Who’s Who in Diversity and Inclusion Dimensions of Difference Overcoming Language Diff erences Business Intelligence: Combating Subtle Discrimination Case Study: Shifting Diversity Into Overdrive Advertisers’ Index Editorial Resources Strategies

Diversity Executive - November 2008

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