NEW YORK — At the Legal Executive Institute’s recent Strength in Numbers forum, David L. Gonzales, Global Chief Diversity Officer at Bristol-Myers Squibb, examined the tactics of high-performing organizations in how they integrate inclusion, business, and culture to enhance the role of enterprise and improve performance.
From the outset of the event, Gonzales and other panelists demonstrated how inclusion is strongly linked to business performance. For many companies, the business imperative has become more clear given today’s changing demographics (the future majority population of the US will identify with a member of an underrepresented ethnic group), and the forecasted $234 billion of mergers and acquisition activity. Indeed, Bristol-Myers Squibb is doubling down on its strategy by making investments in HR analytics to better address skill imbalance and to understand its future target patient base in the areas of digital and personal health. The company is also investing in middle management leadership development by using the financial performance lens to accelerate the advancement of diverse talent.
During the session, there was a good deal of discussion about the “frozen middle” — the strata of middle management in an organization where change can be difficult — and how best to keep this segment accountable amid the dynamic business environment and competing priorities.
Bristol-Myers Squibb has taken a non-traditional, innovative approach to its employee resource groups to strategically drive business results and support business objectives, career advancement, and developmental needs of the workforce. Called People and Business Resource Groups (PBRGs), the 16,000-plus members in 45 countries voluntarily come together around a single dimension of diversity to help drive business results. Bristol-Myers Squibb uses a unique model for most of its PBRGs — a dedicated, full-time leader (general manager or equivalent) is accountable for strategic development, business plans, structure, operations, business results and driving accountability for performance. These leaders report to the PBRG executive sponsors, who are members of the company’s leadership team.
Diversity & Inclusion and the Client Experience
The next session focused on the importance of diversity & inclusion (D&I) within the client experience, and how certain firms are leveraging their efforts in this area.
The correlation between D&I, performance, and innovation is strong. Indeed, 85% of CEOs whose organizations have a diversity and inclusion strategy say it has enhanced performance, according to PwC’s 18th Annual Global CEO Survey. In addition, exceptional companies labelled as inclusive by the Bersin by Deloitte Talent Management Maturity model earned 2.3-times higher cash flow per employee over a three-year period, according to the research.
For the legal industry, the data on the correlation is also strong. “Our data shows clients who recognize a firm as innovative, on average, award double the Net Promoter Score and take a two-thirds higher share of spend,” said Lisa Hart Shepherd, CEO of Acritas.
The law firm Blank Rome, for example, proactively asks questions of its clients about expectations of D&I to better provide transparency for the requirements. The firm also checks in periodically with clients to ask whether the firm is meeting clients’ D&I requirements, according to Cole Silver, Chief Client Officer for Blank Rome.
In another example, a panelist from Hub International said that during the pitch process its team includes a slide in its pitch deck to open the dialogue with the prospective client and demonstrate how it approaches D&I.
Indeed, several panelists discussed how a lack diversity on pitch teams underscored the internal challenge of retaining women at the mid-senior level and, worse yet, resulted in lost business opportunities. The primary factors contributing to this lack of diversity were few visible role models at the executive level and the fact that too much institutional power remains in the hands of older, white males.
Finally, the last session of the day was dedicated to aligning compensation to D&I. Doreen Lilienfeld, Partner at Shearman & Sterling, highlight three major shifts in the business environment that is accelerating the priority of D&I:
- Focus of institutional investors on environmental, sustainability, and governance issues, especially for retailers who are being asked if their boards of directors and C-level executives reflect the buyers of their products;
- The change in the IRS rule that makes performance-based bonuses of more than $1 million deductible; and
- The momentum of attitudinal change brought on by the #MeToo movement.
To illustrate the impacts of these shifts, Lilienfeld pointed to two recent examples: i) Google’s employees bringing forward a shareholder proposal to diversify the company’s management, and their successful advocacy to remove forced arbitration in cases of discrimination; and ii) Citigroup’s publication of its gender pay gap.
There is no doubt that the changing expectations of buyers and the values of the younger generation is driving the intense dialogue, activism, and increasing prioritization of D&I by employers. Of course, it remains to be seen if the hyper-focus will result in visible changes quickly.
Either way, one thing is clear from the discussion during the conference — business is earned when firms “lead with diversity, they WIN with client relationships,” said Demetria Johnson, Inclusion & Talent Strategist and Client Relations Manager at The Verna Myers Company.