Deima Tankus: Thank you for joining this video series on Excellence in Diversity, Equity and Inclusion within the Commercial Organization. I’m Deima Tankus, a business analyst at the Alexander Group. I’m joined by Priya Ghatnekar, a principal at the Alexander Group that helps lead our DEI strategy, as well as Elizabeth Watson, who is instrumental in supporting our DEI strategy as well. In the first video, we explored the influence of investing DEI on the employee and customer experience. This time around, we’re going to dive a little bit deeper into the State of DEI today and discuss what executives are doing to improve DEI within their commercial organization. Priya, could you give a quick overview into what AGI does as well as why we care about this issue?
Priya Ghatnekar: Yes. Thank you. The Alexander Group is a management consultancy, and we’re focused on helping organizations drive topline revenue growth. So we tend to work with marketing, sales and service arms of the organization. The projects that we run could range anywhere from a full-scale commercial transformation to point projects such as helping organizations align their sales compensation programs for future success. The theme of AGI research this year is enduring leadership. It’s really about understanding the values and actions taken by leaders of companies that have weathered multiple economic storms. In 2022 the Alexander Group surveyed executives from these organizations on key leadership principles responsible for their enduring success. We’ve distilled down these responses into eight tenants, broadly covering the leading philosophies in a company’s mission, culture, talent and operations. Unsurprisingly, the most successful companies are prioritizing their employees across those four categories. They also prioritize a mission that’s broader than just profit, and they have a first-mover mentality.
Enduring leaders understand this imperative, but not all companies are so holistically aligned. Elizabeth, could you please walk us through what kinds of investments commercial leaders are making to improve the employee experience within their organization?
Elizabeth Watson: So we just surveyed commercial leaders across industries around which diversity, equity and inclusion programs their companies are implementing. At what level? How effective they are at advancing DEI within their commercial organization? We notice companies gravitating towards implementing quick-win programs, such as providing flexible work hours, paid parental leave, making sure their benefits are market competitive, to really address that very urgent issue of stemming turnover. The majority were also expanding their DEI training programs and actionable programming, which were evaluated as highly effective at advancing DEI within the organization.
Priya Ghatnekar: And have you seen any programs that are maybe not as highly adopted in the past, but they’re gaining momentum right now.
Elizabeth Watson: Yeah. So there’s quite a few evolving programs around seller quotas and compensation. 40% of surveyed companies are in the beginning stages of evaluating pay levels for equity, and nearly half are actually reevaluating their quota assignments to ensure that employees have the equal opportunity to achieve and to overachieve.
Priya Ghatnekar: And then from your perspective, does that mean that the majority of companies have strong measurement mechanics in place with which they evaluate this equity ability?
Elizabeth Watson: Well actually no. These organizations have been really struggling to get some longer-term programs off the ground, especially initiatives around diversity measurement. So one in five don’t formally track the employee characteristics like age, ethnicity, disability. This poses a legislative risk in certain states like California and Illinois, for example, where employers have to report diversity data if they have over 100 employees. It also poses risks of blind spots internally. So if you don’t measure at higher promotion or even attrition, you really won’t be able to be aware of biases in your practices. You’re also unable to assess whether territories and quota and pay are equitable amongst all of these employees that we were talking about earlier.
Priya Ghatnekar: And what are you seeing in regards to employee feedback? Are organizations starting to take that into account more so?
Elizabeth Watson: So soliciting employee feedback also falls into this hesitancy category. About 20% of firms don’t have any formal employee feedback pipeline, and none of the executives in this cohort believe that the program could really be effective at advancing DEI within the organization. At the same time, though, the companies that had advanced employee feedback pipelines rated the practice highly effective. So there’s definitely a leap of faith required for those who don’t believe this to be effective.
Priya Ghatnekar: So it sounds like, from your experience, commercial leaders are struggling to align practices into an overall holistic strategy. Is that the case?
Elizabeth Watson: Yeah, we know that commercial leaders care about DEI. And as you said, enduring leaders prioritize their employees and listen and learn from them. However, through the various conversations we’ve had with leaders around DEI, we’ve seen some mismatches between what they believe to be important and what they are able to prioritize. So, for example, nearly all commercial leaders are investing in DEI initiatives to win the war for talent. You actually discussed this in your last video. We surveyed commercial leaders in the manufacturing industries and saw that only 13%, though, consider DEI to be in the top three ways to win talent. So there’s really a misalignment in the priorities here. Another mismatch is what we just talked about. So the listening infrastructure, even within the cohort of enduring leaders, nearly all of these executives consider listening to employees a key tenant. However, almost half rated their ability to do so ineffective. And one more mismatch, the tactical versus strategic. When employers prioritize quick rent programs and shy away from longer-term initiatives, they run that risk of damping their ROI. We’ve seen it with underinvestment in tracking and measurement. 97% see acquiring and retaining diverse talent as a top-three initiative for investing in DEI. But only 40% set diversity targets for recruiting and retaining diverse employees. And even fewer are tracking diversity metrics post-recruitment. The strategy is there, but the tactical programs to support it don’t cohesively align.
Priya Ghatnekar: And I think your last comment is one of the main reasons driving our interest in DEI at the Alexander group. So not having a holistic plan for the investment, focusing on those short-term wins rather than planning out a comprehensive roadmap and not getting full alignment at the leadership level, all of these can hurt the return on your DEI investment.
So in our next video, we’ll cover in detail what a DEI roadmap should look like in order to avoid some of the common pitfalls that we’ve talked through today.
Deima Tankus: Thank you, Priya and Elizabeth, for this insight into what programs commercial leaders are investing in or under-investing in today. Viewers, please tune into the next video in this series.
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