Overseeing Effective Corporate Strategy Implementation: A DEI Case Study
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A challenge often faced by corporate boards is ensuring that their organizations effectively implement their strategic priorities. Recently, many corporations have articulated diversity, equity, and inclusion as a strategic priority. This article provides insights to assist corporate boards in enhancing strategy implementation, using DEI as an example.
Effective strategy implementation often challenges many corporations due to multiple factors. Often strategic goals are large, complex and require resources and input from multiple departments throughout an organization. Organizational teams responsible for implementation may have conflicting priorities; be accustomed to focusing on routine, nonstrategic work, and/or the corporation may not employ effective implementation methodologies. For example, organizations may rely on spreadsheets to track implementation (which do not optimize transparency or real-time strategic goal attainment). Employees often prefer to focus their efforts on tactics (which achieve immediate results) as opposed to strategies (which may yield long-term benefits). In addition, employees asked to implement strategic goals, may fail to understand their importance to the corporation or to their personal careers.
While the challenges presented above apply to any strategy, the implementation of a DEI strategy presents additional issues. Implementing a DEI strategy can be particularly challenging due to the lack of diversity among the organization’s decision makers (such as the Board). In 2020, 82.5% of Board members for Fortune 500 companies were White, and only 5.6% of Board members were African-American men and 3.1% were African-American women. Even more concerning is the slow growth that diverse representation in the boardroom has experienced over the years. Since 2010, both minority men and minority women have experienced less than a 1% annual increase in board representation. Finally, it is important to note that the little progress that is being made by minorities in the boardroom might be over accounted for. In 2020, more than one third (36%) of diverse seats in Fortune 500 boards were occupied by persons on multiple Boards. This concentration was most acute for African-Americans, where two out of every five seats were occupied by African-American members serving on multiple Fortune 500 boards. The lack of diversity among Board members and decisions makers may impede the organization from viewing DEI as an organizational priority.
The reluctance to speak about race or gender in the workforce may hinder successful implementation of DEI strategic plans and initiatives. Recently, two out of three surveyed employees reported being uncomfortable discussing issues related to race, and four out of ten African-American employees mentioned it is never acceptable to speak about racial bias in their workplace. Fear of saying the wrong thing often prevents people from engaging in discussions about inequality. To many, the risk of having these conversations is greater than any perceived benefits. However, not having conversations about inequality in the workplace can lead to the creation and implementation of strategic plans that ignore racial inequities. In addition, it can prevent employees from understanding the importance of implementing DEI action plans.
The murder of George Floyd in May 2020 led to global outrage. In the week following George Floyd’s murder, there were at least 8,700 demonstrations reported across 74 countries (including the U.S.). In addition, between May and August of 2020, there were more than 10,600 demonstration events across the United States. For many corporate leaders these events marked a clarifying catalyst that increased awareness of enormous inequities which have long existed. Numerous corporations articulated statements denouncing the murder and societal inequities, and promising greater awareness and commitment to DEI. During this time, companies in the U.S. pledged more than $50 billion towards racial equality. However, these statements have not been sufficient. Increasingly, the public is demanding that boards and corporate leaders deliver on their DEI promises. For example, several asset managers, including the New York City
Employees’ Retirement System and Black Rock, have asked corporations to release their workforce gender, racial, and ethnic composition data as a way to incentivize change.
Ensuring DEI strategic plans are successfully implemented is more important now than ever. Many consulting firms have developed tools and approaches that ensure that the strategies they help their clients develop are properly executed and lead to long-term change. For example, The Barthwell Group has developed its proprietary strategy implementation methodology titled Tactical Action Planning (TAP) (Patent Pending), which has been used to help numerous corporations execute strategies. TAP provides a clear and pragmatic roadmap for strategy implementation focused around five steps:
- Identification of a clear strategic goal
- Articulation of metrics (which clarify goal completion)
- Designation of a single accountable implementer
- Statement of a specific timeline
- Description of all required implementation resources (i.e., personnel, infrastructure, technology, and funding).
We have applied TAP successfully to assist corporations in answering the question: How can we successfully implement DEI? by using our convenient TAP template with appropriate training. DEI TAP implementation often results in assessing whether designated DEI staff, infrastructure, and funding are appropriate which in turn results in impactful DEI improvements. For example, a large healthcare corporation determined that staff meeting times scheduled between 9-5 were unconsciously disadvantaging employees holding lower-level positions (typically underrepresented minorities) who worked late night shifts. We discovered at an Ivy League medical school that minority administrators were subjected to a “Minority Tax” (i.e., expected to assume unpaid responsibilities to ensure the successful integration of minority employees).
Other best practices among our DEI clients using TAP include making workforce diversity data public, establishing realistic and measurable goals, ensuring diversity can be found at all levels of the organization (including the executive level), prioritizing strategies to recruit, retain and promote diverse employees (such as people of color and women), evaluating how existing policies might disproportionately affect diverse groups, and providing safe spaces where employees feel supported.
TAP has been successful in assisting numerous clients implement corporate strategies efficiently, including those seeking enhanced DEI. It enables clear guidelines, easy to follow progress steps, and the measurable results so important to implementing corporate strategies, including DEI.
Another example of a strategy implementation methodology is McKinsey’s team of implementation experts dedicated to helping their clients accelerate strategy execution. These experts start by utilizing McKinsey’s proprietary benchmarking tool to assess the organization’s current state and evaluate their readiness to execute a strategy. Next, the team of experts work to design a transformation or initiative portfolio and implementation plan. The implementation experts also assist clients by conducting virtual and on-site observations, utilizing performance management tools, and strengthening capabilities that enable change. Finally, the experts collaborate with the client to ensure the sustainability of the execution.