November 15, 2022 – In the past two years, there has been an unprecedented focus on diversity, equity, and inclusion (DEI). Prompted by the 2020 murder of George Floyd, followed by months of Black Lives Matter protests, business leaders have finally begun to recognize the racial inequities embedded deep in the systems in which we operate each day, including our workplaces. Many organizations have responded with a commitment to change the way they operate. As a result, many are searching for their first chief diversity/equity/inclusion officer or leader. The business implications of a DEI program are very significant, according to JM Search’s Louis Montgomery. “With respect to why organizations would hire their first ever DEI leader, several reasons come to mind. Internal activism. In some cases, employees actively band together as employee resource groups for their mutual aid and support, pushing the organization to develop their DEI plan.”
Mr. Montgomery also points to executive sponsorship. “The CEO, chief people officer, or other senior executive may decide they aren’t happy with the organization’s current state of DEI and push to create this position,” he said.
“One recent phenomenon we’re seeing is pressure from public pension funds and other investors for greater DEI in the private equity industry,” said Mr. Montgomery. “The summer of 2020 and the murder of George Floyd led to an explosion of interest in these kinds of roles. Having spoken with several executives, I believe many senior leaders were horrified by what happened. As a result, they looked themselves in the mirror and asked the question: What can we do inside our own organization to promote fairness, diversity, and justice?”
Lastly, Mr. Montgomery points to customer access. “As our society becomes increasingly diverse, an enterprise needs to continually find ways to tap into new markets,” he said. “One of the promises of more diverse workforces is the ability to do a better job towards creating products and services that are going to cater to diverse communities.”
If an organization truly embraces a DEI initiative, what will ultimately happen is that they will begin to create a system that is fair and better for all, according to Mr. Montgomery. “They’ll create more of a winning culture. It will allow them to do a more effective job at being able to attract, develop, and retain a more diverse and inclusive workforce,” he said. “Additionally, I believe it will have significant positive implications for customer attainment, and investor access as well.”
Mr. Montgomery explains that there are a number of places where a diversity leader sits, and there are a couple in particular that are most prominent. The individual could obviously report to the CEO or other top executive of the organization, which is what Mr. Montgomery says is frequently the case within non-profits, including higher education.
Within the private sector, Mr. Montgomery says this role typically reports to the CHRO or the CPO with a dotted line connecting this new DEI leader to the CEO. In any event, this role will work very closely with the CPO as well as external affairs, internal communications since there is frequently a community component to this work and position.
“One of the key aspects I’ve learned over the years is that it’s absolutely critical to have executive involvement and sponsorship,” he said. “If the top executive of an organization is not supportive of this kind of initiative or position, success will be unachievable. One of the things we’ve seen when the organizational sponsor for these DEI leaders changes is that it’s unfortunately not uncommon for the position’s executive support to go away as well. We’ve seen that happen, but it’s not inescapable.”
Priorities for the First Year
To use a military analogy, Mr. Montgomery notes that the battleground has to be prepared for your initiative. “DEI is not a situation where a new executive can parachute in to save the organization,” he said. “Maybe one of the most important things to do in the first year is create a DEI governance council or diversity steering community. It should be comprised of people at different levels in the organization from the CEO, CPO, and other senior leaders to employee representatives.”
The second objective is to create a DEI strategy, which requires the long-term thinking of a lifestyle change, not the quick-fix mentality of dieting. “There should be SMART goals (specific, measurable, achievable, relevant, and time-bound) in addition to an assessment of the state of DEI,” Mr. Montgomery said. “Also, connecting to business goals, many of which are linked to financial performance or end-of-year bonuses, can maximize results.”
One JM Search client pursued executive interviews, focus groups, and conversations before they hired a DEI leader. This created clarity around the challenges they were facing as well as the kinds of things they needed to address. “And that organization I mentioned has been quite successful,” Mr. Montgomery said. “The whole process was not unlike going to a doctor and getting a physical.” In this case, they gathered data around the state of DEI:
- What’s the workforce composition with respect to representation?
- What are turnover rates for various groups?
- What are the promotion rates for various groups?
- Does the organization have employee resource groups?
- How engaged are employees are all levels?
- What is the organization’s external reputation on DEI?
- What’s the organization’s internal reputation on DEI?
These questions are typically built around specific affinity groups (women, veterans, LGBTQ, black, Asian, or Latinx employees as examples) that already exist or can be started by supportive senior leadership, according to Mr. Montgomery. “Also, your strategy should treat DEI as a journey, not a destination,” he said. “You may never fully realize all the benefits however you can make great progress through sustained effort.”
Mr. Montgomery also notes that it’s very useful to have some sort of training. “There are a lot of trainings that an organization can undertake to move the needle on this,” he said. “Things like antibias or general awareness training because unfortunately DEI has from time-to-time become very politicized and misunderstood. Providing people with the opportunity to have education and conversation with their peers by using skilled trainers and facilitators can help organizations move things forward.”
Mr. Montgomery says that a DEI leader could potentially be viewed as an organizational coach. As such, this person will clearly be a subject matter expert to move this forward, but they first and foremost need support from the executives. “And executives need to demonstrate that they are supportive by being involved in the diversity council I mentioned by having personal goals and making public statements that are their responsibility,” he said. “Moreover, this should become part of the conversation they have while they talk about the organization on a regular basis. Ultimately, the most effective programs weave this program into the fabric of the business and are treated as the organizational change they truly are.”
This topic will be explored even more tomorrow in an interactive webinar conducted by JM Search and supported by Hunt Scanlon Media. We invite you to join Mr. Montgomery for a lively panel discussion among HR leaders / hiring managers who have hired DEI leaders for their organizations, as well as an inaugural DEI leader who has been the first to fill the role within their organization. The panel of speakers will share personal stories, insights, and learnings of how to ensure you’re enabling success when hiring for this ever-important role.
Free registration … Click here to sign up!
Louis Montgomery is a partner at JM Search and specializes in the placement of senior HR and DEI leaders and their teams. He helps organizations add diversity to their ranks: 75 percent of his placements have been women and 50 percent have been people of color. As a former HR and DEI practitioner, Mr. Montgomery understands what it takes to be successful in this demanding field. His deep experience as an executive search consultant have honed his skills as a top assessor of talent. His background includes recruiting experience across numerous sectors, including private equity-backed companies and publicly-traded firms across consumer goods, financial services, industrial, government contracting, higher education, trade associations, and non-profits.
Ian Lee Brown is vice president and chief diversity and belonging officer at Duke University Health System. He leads the organization’s diversity, equity, inclusion, and belonging strategy to ensure these elements are embedded as imperatives within the system’s culture, ensuring employees are able to live their authentic selves and deliver exceptional services to our diverse population of patients and other customers. Prior to this role, Mr. Brown served in various senior-level roles in national healthcare, senior living, and educational organizations, including Erickson Senior Living, the University of Maryland Capital Region Health and the Howard University College of Medicine, leading culture, diversity, talent, community outreach, and operations. In these roles he had responsibility for more than 1,200 employees and managing budgets in excess of $200 million.
Sasha Diskin is VP of talent, diversity, and inclusion at Horizon Therapeutics, a fast-growing biotech company focused on the discovery, development and commercialization of medicines that address critical needs for people impacted by rare, autoimmune, and severe inflammatory diseases. In her role, she champions high-impact HR and talent initiatives and leads the scaling of Horizon’s company-wide learning and development, talent acquisition, employee engagement and culture improvement efforts to support Horizon’s growth and reputation. Ms. Diskin also led the launch of RiSE, Horizon’s inclusion, equity, diversity, and allyship strategy and program focused on driving a culture of inclusion while leveraging differences to unlock insight and creativity. Prior to joining Horizon, she was the director of organizational effectiveness and change management at Baxter International. During her tenure she implemented a Change Management Center of Excellence while leading the change management of several large-scale organizational transformations, including corporate acquisitions, divestitures, reorganizations, and culture initiatives.
Paula Frey is CHRO of Echo Global Logistic. Prior to working at Echo, Ms. Frey worked at the Education Corporation of America as EVP and CHRO. From 2008 to 2015, Ms. Frey worked at Sears Holdings Corp. in multiple roles, including senior HR business partner and vice president of human resources. As the interim CHRO at Sears, Ms. Frey was responsible for driving organizational culture and increasing efficiencies for the organization. From 1989 to 2008, Ms. Frey was senior director of human resources at Motorola, where she worked in mergers and acquisitions, business partnering, talent acquisition, and talent management.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media