Events

Before COVID-19 was even a thing, we undertook a holistic study of women and performance management (PM), to understand a few key things:

• Are the changes to modern PM practices resulting in women and men having the same experience?
• And, if not, then what are the differences and what can organizations do about them?

The resulting study, Leveling the Field: Making Performance Management Work for Women, was ready for publication in mid-March – just as COVID-19 took over everyone’s worlds. Instead of publishing a study that would get drowned out in the craziness of the times, we held on to it. But then we decided we could – and must – adapt what we learned in Leveling the Field to fit our current moment.

The result is a sister report, The Double-Double Shift: Supporting Women’s Performance Management During a Pandemic, which presents a very realistic look at how the COVID-19 global pandemic is impacting the ways women are perceived during this new work-from-home environment, as well as the additional challenges they now face.

Many of the leading modern PM practices just need to be amplified and augmented to create a more level playing field. Organizations don’t have to reinvent modern PM to make it fairer; they just need to make it the best version of itself.

Please reach out to us at [email protected] with any questions, comments, or suggestions.

Before COVID-19 was even a thing, we undertook a holistic study of women and performance management (PM). The resulting study, Leveling the Field: Making Performance Management Work for Women, was ready for publication in mid-March – just as COVID-19 took over everyone’s worlds. Instead of publishing a study that would get drowned out in the craziness of the times, we held on to it. But then we decided we could – and must – adapt what we learned in Leveling the Field to fit our current moment.

The result is a sister report, The Double-Double Shift: Supporting Women’s Performance Management During a Pandemic, which presents a very realistic look at how the COVID-19 global pandemic is impacting the ways women are perceived during this new work-from-home environment, as well as the additional challenges they now face.

In this second study, we focus on questions such as:

• How might the unconscious biases women already face worsen in – and be mitigated by – a long-term work-from-home environment?
• Given what we know about how to make PM more equitable for women, how might we alter our practices in this current environment to level the playing field?
• How can leaders address these challenges now, before less effective practices solidify in this new working environment?

To improve women’s experiences of performance management, leaders must first understand there’s a difference that needs to be addressed – and, critically, that it still needs to be addressed even under the current trying times. Much of this report is dedicated to outlining where and how these different experiences occur for women, and diving more deeply into how they might be exacerbated and addressed when women are working remotely.

Please reach out to us at [email protected] with any questions, comments, or suggestions.

Our research on performance management (PM) revealed, like so many others have found before us, that men and women have different experiences with it, resulting in women experiencing systemic inequality. This is despite changes to make PM more “modern.”

We undertook a holistic study of women and PM, to understand:

• Are the changes to modern PM practices resulting in women and men having the same experience?
• And, if not, then what are the differences and what can organizations do about them?

This infographic is a summary of what we learned. As always, we would love your feedback. If you have thoughts, please share in the comments section below!

 

It goes without saying that the killing of George Floyd and the subsequent protests have laid bare the significant race-based differences prevalent in American society. Unfortunately, despite many leaders’ best efforts, those differences don't stop when people pass through the doors of corporate America.

We all know that diversity and inclusion (D&I) is important to business outcomes. But, even more, it's critical to our humanity. Seeing and respecting others for everything they bring – and ensuring that everyone feels safe, valued, respected, and like they belong – is a critical part of a human environment, not just a work environment.

Why we care

Given everything that's happening, there's an even greater need to bring all of our resources to bear on understanding and improving diversity, inclusion, equity, and belonging in companies today.

Responses from corporations with statements supporting the protests against racism have been swift and numerous. However, only a small fraction of those have been turned into actions by taking tangible steps. Companies, such as Goldman Sachs, Lego, and Cisco¹², donated millions to charities to help fight racism and inequality, but there's still much that remains to be done to improve levels of diversity, inclusion, equity, and belonging within organizations.

Aware of this heightened call to action, we're undertaking our 2020 update to our D&I technology research. While we recognize technology is only one part of how leaders can address the underlying challenges within their organizations, it's still an important part.

In particular, technology can help identify patterns that may not have been previously known to exist, determine areas that need to be worked on, heighten awareness at critical decision points, and provide predictive data that can guide better insights for the future.

How you can participate

We invite you to participate in our research if you are one of these 3 groups:

• Customers of D&I tech vendors. If your company uses D&I technology in any form, we’d love to hear about your experience in our short 5-7 minute poll at danditech.com. Below is a list of companies previously included in our research (any of which might be one of your vendors) that you can give us feedback on. If your vendor isn’t on there, tell us which they are and give us your feedback – we'll track them down to get the other information we need from them.
• D&I tech vendors who participated in our 2019 research. Your company should have already received an email informing you of the detail of our process and inviting you to take our survey. If you haven’t received this email, send us a note at [email protected].
• D&I tech vendors who have not yet participated in our research. If you think you should be included, send us an email at [email protected], explaining your solution and why you think you should be part of the study. We'll get back to you as soon as we can.

When we launched our first D&I tech study, it was in the midst of the #MeToo movement. We are at the beginning of another movement that also requires our utmost commitment. Our fervent hope is that our work – when combined with the good work of so many of you – will help move the dial on the inequities we see all around us. Thank you in advance for taking yet another step on this long journey to drive necessary, critical change.

Introduction

We’ve been living in a COVID-19 world for quite some time now, and many people are feeling the effects. Companies cut more than 700,000 jobs in March and the total of unemployed workers now exceeds 16 million.^1,2 Suppliers are scaling back on production,³ and the consumer confidence index declined in March to 120.0 as compared with 132.6 in February.⁴ In many ways, there's a sense that we just need to survive this time before we can get “back to normal.”

But in so many other ways, this crisis is providing an opportunity for individuals and organizations to contribute more to others than they ever have before. Many leaders right now assume that companies have an obligation to their workers and communities – even to humankind – to figure out what they can uniquely contribute to help others get through this crisis. And what’s more – to get it to them for free or at cost. (Click here for an epic list of companies contributing to humankind.)

This crisis has brought purpose-driven organizations – those organizations with a responsibility to deliver value to its stakeholders, not just shareholders – into the spotlight.

Given this dynamic, it's even more important to understand how organizations inspire people and make purpose-driven decisions. Our hope is that we can capitalize on this unique moment to better understand how leaders and HR professionals can leverage purpose to navigate the current crisis and continue to add value well beyond it.

To that end, we have begun a study on this topic for which we're asking:

What is the role of purpose-driven organizations today, and how can they help stakeholders navigate and survive this new reality?

It’s important to start by understanding what others have said – and there’s a lot of that! To better understand purpose in organizations, we looked at more than 50 published scholarly articles, periodicals, research reports, and blogs from the past 5 years. Given the current COVID-19 pandemic, we also extensively scoured what's been written more recently to identify trends or shifts in purpose-driven organizations.

5 themes from our lit review

Five themes emerged from our review. In this article, we summarize the most interesting insights we learned:

1. Good purpose statements inspire action
2. Relationships anchored in purpose can increase resilience
3. Purpose enriches the employee experience
4. Leaders face barriers to purpose-driven decisions
5. Purpose-driven metrics are a big problem

Good purpose statements inspire action

Many organizations spend a significant amount of time, effort, and even money developing a purpose statement. Some even outsource it to PR or advertising firms to come up with a catchy slogan. But our review found a different story for organizations that are able to develop a good purpose statement and activate it throughout the organization.

Good purpose statements are clearly defined and distinct from other different, though related, terms like mission, vision, values, and principles:^5,6

Purpose, on the other hand, has its unique flavor:⁷

Purpose: Expresses the organization’s impact on multiple stakeholders (employees, customers, shareholders, suppliers, communities) and connects to people’s intrinsic motivation. At times, it’s even called an organization’s philosophical beat because it serves to inspire employees.

Good purpose statements motivate people to take action through a shared sense of direction. It's shared because there's a collective sense among colleagues of working toward an unquestionable common goal.⁸

Relationships anchored in purpose can increase resilience

For purpose-driven leaders, challenging situations represent an opportunity for the organization to live up to its purpose of serving a greater cause. This couldn’t be more true in today’s coronavirus situation. Many organizations are shifting priorities to address market needs, such as distilleries and perfume makers that are now manufacturing hand sanitizers⁹ or automakers now producing ventilators.¹⁰ These actions can go a long way. Research shows that 88% of people feel it’s particularly crucial that organizations not only have a clear purpose statement, but they also demonstrate behaviors which are congruent with it.¹¹

In our readings, we found that the benefits of purpose go both ways because people are more willing to help and defend a purpose-driven organization, if necessary. In a recent U.S. study, for example¹²

• 73% of people said they would be more likely to defend a purpose-driven company if someone spoke badly of it
• 67% of people said they would be more forgiving of companies that lead with purpose compare to those that do not

In companies that had an average annual growth rate of 30% or more in the previous 5 years, purpose enabled them to overcome the challenges of slowing growth and declining profitability.¹³ In general, purpose isn’t only beneficial to stakeholders, but it's also favorable to purpose-driven organizations. It allows them to build trust and loyalty both internally and externally, which in the end, can make them more resilient to challenging situations.

Purpose enriches the employee experience

During the current COVID-19 pandemic, it may be easy for employee experience – employees’ collective perceptions of their ongoing interactions with the organization¹⁴ – to take a back seat as organizations grapple with business disruptions. But, while it may be tempting to neglect employee experience, truly purpose-driven organizations tend to be better equipped to protect it.

For example, in purpose-driven organizations, HR plays a crucial role in helping people understand their purpose, how it connects to the organization’s purpose, and how their daily work contributes to it. This extra attention and effort in helping individuals connect their individual work to the organization’s purpose, especially during a crisis, go a long way in enhancing people’s connection to their work and the organization. Employees who perceive their work as meaningful and purposeful are 3 times more likely to stay with their organization.¹⁵

Organizational culture is a particularly important element in purpose-driven organizations. For example, we noticed a parallel between our study on employee experience and the purpose-driven organizations in our readings. Organizations with a positive employee experience display 5 behaviors that are woven into their cultural fabric (see Figure 1).¹⁶

Figure 1: 5 Essential Behaviors in Supportive Cultures | Source: RedThread Research, 2019.

Similarly, purpose-driven organizations, and especially leaders, tend to demonstrate behaviors that support a positive employee experience:

• Collaboration. In purpose-driven cultures, shared purpose – a collective sense of working with colleagues toward a common goal – is the most important source of meaning for employees.
  • And meaning matters because employees who rate their work as very meaningful report 14% more job satisfaction than average employees, and 51% more satisfaction than employees with the least meaningful jobs.¹⁷
  • The power of shared purpose is more important now than ever. Consider healthcare workers on the frontlines who continue to put themselves at risk to treat infected patients driven by their shared purpose of saving lives.
  • Examples of HR activities that foster collaboration and shared purpose:
    • Career pathing to help existing employees discover their individual purpose and align it to career paths, projects, and new experiences that fuel their sense of meaning and purpose.
    • Learning and development opportunities – training, mentoring, coaching, education, resources – to help employees build skills that further their sense of meaning along with the organization’s purpose.

• Alignment. Purpose-driven leaders use storytelling to help employees personally identify with the impact of their daily work on the organization’s stakeholders,¹⁸ which creates alignment and a stronger sense of shared purpose.
  • The current pandemic is inspiring a sense of shared purpose and alignment among many leaders. Messages like Together We Will Persevere from SAP’s co-CEOs and Coming Together to Combat COVID-19 from Microsoft’s CEO are more common now than in recent years.
  • Example of HR practices that create alignment:
    • Recruitment (hiring for purpose) by having a compelling employer brand that attracts the right individual to apply for jobs at the organization.

• Transparency. Purpose-driven organizations have leaders who translate (reduce the complexity of purpose) and truthfully communicate the social impact of every decision.¹⁹
  • Consider for example, Patagonia’s decision to close all stores amid the COVID-19 outbreak to protect both employees and customers, and their commitment to continuing to pay employees throughout their closure.
  • Example of HR practices that cultivate transparency:
    • Communication to clearly and constantly convey purpose-driven beliefs, values, assumptions, behaviors, and decisions.

• Psychological safety. Purpose-driven leaders dedicate time to talk personally with employees and intentionally integrate rituals or events that manifest their shared sense of purpose and enhance their mutual trust and psychological safety.
  • Crises like the current pandemic are testing many leaders’ ability to calm down fears and instill a sense of safety throughout the organization. The Coronavirus Generosity Challenge is an example of leaders who are finding ways to make a positive contribution internally and externally amid the current situation.
  • Example of HR practices that build greater psychological safety:
    • Manager support to learn to lead a remote team with empathy (e.g., encourage them to check-in more frequently with their direct reports via video conferencing or phone calls and have meaningful conversations).

• Feedback-sharing. Purpose-driven organizations actively solicit employees’ ideas to activate their individual sense of meaning and their collective sense of purpose.²⁰
  • Purpose-driven organizations tend to measure purpose through real-time feedback mechanisms (e.g., pulse surveys) that influence the employee experience.
  • Example of HR practices that support feedback-sharing:
    • Pulse surveys to collect real-time and frequent employee feedback, especially during these challenging times.

Leaders face barriers to purpose

Historically, many leaders have believed that a purpose-driven focus conflicts with a profit-driven approach. This may be of no surprise as most of the world has focused on only maximizing profit for shareholders. But even though purpose is often cast as the opposite of business profit, this isn’t necessarily the case.

Organizations can define their impact on stakeholders as a spectrum of possibilities based on what aligns with the firm’s objectives and values. This spectrum can range from deliberate social impact to maximizing both impact and profit objectives, and to meeting the traditional market expectations of pure business profit (see Figure 2).²¹

Figure 2: The Force for Good Spectrum | Source: INSEAD Responsibility – BLOG, 2020.

Beyond the purpose-vs-profit debate, leaders face other barriers that prevent them from adopting purpose-driven strategies:^22,23

• Market volatility tied to shareholder expectations, which hinders leaders’ ability to focus on long-term value creation
• C-level executives sometimes lack the ability to envision synergies between sustainable development goals and their business
• Organizational systems and infrastructure that are not aligned with long-term purpose and value
• Hiring people whose individual purpose does not align with the organization’s purpose
• The lack of development opportunities for leaders who do not behave in purpose-driven ways
• Employee performance targets and incentives that are not aligned with the organization’s purpose

This is further worsened by limited purpose-driven targets or incentives tied to leaders’ scorecards; 68% of leaders see the need to make better progress in this area.²⁴

Yet, it seems like the current COVID-19 pandemic is affording leaders a bit of flexibility to make more purpose-driven decisions than in years’ past. We’re seeing this play out in leaders’ responses to policies and practices that protect employees or in their rapid pooling of resources to address community needs for more ventilators or masks. We see 2020 as providing an opportunity to cement a purpose-driven approach as a strategic and imperative way of doing business.

Purpose-driven metrics are a big problem

Nowadays, purpose is touted as a cost-of-entry for any business. This has been partly driven by pressure from well-known investors,²⁵ by increased scrutiny over the impact of organizations on stakeholders,²⁶ and, to a certain extent, by the promise of greater consumer trust and loyalty along with increased talent retention.²⁷

This focus on purpose-driven organizations is bringing the need to measure impact to the forefront – which is easier said than done. In theory, purpose-driven organizations can substantiate their triple bottom line (TBL) impact on 3 areas: people, planet, and profit.²⁸ There are numerous measurement approaches that follow TBL principles. Here are some of the common ones:

• Environmental, social, and governance (ESG) criteria²⁹
• Includes measures of environmental impact (e.g., green building, pollution prevention, energy efficiency), social metrics (e.g., human capital engagement, labor standards), and governance (e.g., business ethics).
• Social return on investment (SROI)³⁰
• Tracks relevant social, environmental, and economic outcomes to forecast or evaluate impact. It calculates a ratio after assigning a monetary value to inputs and outcomes.
• B Corporation Certification³¹
• Assesses all aspects of a company (environmental and social impact, corporate governance, community involvement) based on accountability and transparency standards.
• SAM Corporate Sustainability Assessment³²
• Serves a wide range of stakeholders and includes several indices:
  • The Dow Jones Sustainability Indices (DJSI)
  • S&P ESG Index
• ISO 26000 Social Responsibility³³
• Provides guidelines to effectively assess and address social responsibilities to multiple stakeholders: customers, employees, environment, suppliers, and shareholders.

But in reality, organizations find it challenging to actually measure their TBL; only 35% of companies align their business practices to a multistakeholder model today.³⁴ This is partly driven by unclear and unsystematic reporting mechanisms.

Entities such as The International Organization for Standardization (ISO) and The Global Reporting Initiative (GRI) aim to fill this gap by outlining specific reporting guidelines that facilitate organization- and industrywide comparisons.³⁵ Organizations can use the recommended guidelines to report their impact across clearly defined economic, environmental, and social categories.

Must-read articles

These articles caught our attention because they're interesting or insightful in helping us understand purpose-driven organizations.

Gartner HR survey reveals 88% of organizations have encouraged or required employees to work from home due to coronavirus

Brian Kropp

“As the COVID-19 crisis disrupts organizations across the globe, HR leaders must respond quickly and comprehensively, considering both immediate and long-term talent consequences.”

This article summarizes findings from a recent HR survey on how organizations are addressing coronavirus challenges and needs.

Highlights:

• States that 88% of organizations have encouraged or required employees to work from home.
• Shows how organizations are responding to coronavirus-related absences.
• Lists recommendations for HR leaders on managing remote talent.

COVID-19 and corporate purpose—Four ways businesses can respond now

Greg Hills

“When faced with this unremitting uncertainty, how can a company maintain clarity on its societal purpose? What is the role and responsibility of your business in a time of chaos and crisis?”

This article suggests four levers to guide purpose-driven organizations during the current COVID-19 crisis.

Highlights:

• Recommends that organizations leverage their core business assets to meet the current needs of stakeholders.
• Emphasizes the importance of focusing on generosity and compassion (vs. profit) during this time of need by adding value to stakeholders, especially employees and local communities.
• Advises leaders to keep a long-term view of their company’s role in navigating the pandemic and helping stakeholders return to normalcy once the current crisis passes.

We are nowhere near stakeholder capitalism

Vijay Govindarajan & Anup Srivastava

“While we admit that considerable progress has been made in developing theory, models, and disclosure norms for ESG objectives, we believe that we are nowhere close to achieving ‘integrated reporting,’ as some people might claim.”

This article states that many organizations aren’t creating value for all stakeholders.

Highlights:

• Suggests that real change will come once organizations transform their financial and non-financial measures.
• Mentions that maximizing shareholder returns remains the main objective – while keeping ESG goals as a secondary objective – for many organizations.
• Asserts that organizations aren’t close to developing an “integrated reporting” framework that includes both tangible and intangible capital resources.

Put purpose at the core of your strategy

Thomas W. Malnight, Ivy Buche, Charles Dhanaraj

“When customers, suppliers, and other stakeholders see that a company has a strong higher purpose, they are more likely to trust it and more motivated to interact with it.”

This article highlights results from a global study of companies that use purpose to generate sustainable growth, stay relevant, and deepen ties with stakeholders.

Highlights:

• Describes a purpose-driven strategy to help companies overcome challenges.
• Provides specific suggestions to help organizations define their purpose and implement it as a core business strategy.
• Highlights the tangible and intangible benefits of purpose to organizations.

Putting purpose to work: A study of purpose in the workplace

Shannon Schuyler & Abigail Brennan

“Purpose is about empathy – it defines the human needs and desires that a company’s products and services fulfill.”

This report discusses results from a study of over 1,500 U.S. employees across 39 industries on purpose in the workplace.

Highlights:

• Considers leaders’ role in purpose-driven organizations, especially in their communication and decision-making.
• Identifies team leaders and coaches as holding the greatest potential to help employees identify and translate their individual meaning and purpose into the organization’s purpose.
• Discusses the role of younger generations in shaping the purpose conversation.

9 out of 10 people are willing to earn less money to do more-meaningful work

Shawn Achor, Andrew Reece, Gabriella Rosen Kellerman, Alexi Robichaux

“The old labor contract between employer and employee – the simple exchange of money for labor – has expired.”

This article discusses results from the Meaning and Purpose at Work Report, and asserts that people highly value meaningful work.

Highlights:

• Identifies that more than 9 out of 10 employees are willing to trade a percentage of the earnings for greater meaning at work.
• States that many companies fail to leverage the power of meaning at work despite its many benefits to both employees and organizations.
• Recommends a series of actions companies and leaders can take to support and foster a sense of meaning and purpose throughout the organization.

Additional articles for your reading pleasure

1. “A Time to Lead with Purpose and Humanity,” Joly, H., Harvard Business Review, 2020.
2. “From Being Purpose-Led to Foster A Toxic Culture: Why Companies Like Away Fail to Live Up to Their Promises,” Bulgarella, C., Forbes, 2019.
3. “Balancing Profit and Social Welfare: Ten Ways to Do It,” Craig Smith, N. & Lankoski, L., INSEAD, 2018.
4. “Creating a Purpose-Driven Organization,” Quinn, R.E. & Thakor, A.V., Harvard Business Review, 2018.
5. “The Purposeful Company,” Chapman, C., Edmans, A., Gosling, T., Hutton, W., & Mayer, C., Big Innovation Centre, 2017.
6. “Purpose-Led Organization: ’Saint Antony’ Reflects on the Idea of Organizational Purpose, in Principle and Practice,” White, A., Yakis-Douglas, B., Helanummi-Cole, H., & Ventresca, M., Journal of Management Inquiry, 2016.
7. “The Business Case for Purpose,” Keller, V., EY Beacon Institute & Harvard Business Review, 2015.

Why we care

In 1776, Adam Smith wrote in The Wealth of Nations:¹

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their self-interest.”

In essence, Smith was saying that businesses exist to make money for themselves, not necessarily so they can feel better about feeding their community, providing high-quality jobs, or producing their goods using environmentally-sensitive methods. This line of thinking – that businesses exist to increase the wealth of their owners (shareholders) – has been a foundational principle for many business leaders.

But not for all business leaders. Since the 1800s, leaders such as Robert Owen, James Cash Penney, and William Lever (among many others) have focused on more than the bottom line, by caring about employees, the environment, and their stakeholders.² These leaders represent a sense that businesses have a large obligation to their employees and communities.

The tension between these two perspectives has tipped one way and then the other for years. Last fall, though, the balance tipped firmly to the side of businesses having a broader responsibility. In August, the Business Roundtable, a group of CEOs from large and significant companies, stated that, in addition to generating long-term value for shareholders and delivering value to their customers, they commit to:

• “Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.
• Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.
• Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.”³

Assuming you take the group at their word, this represents a significant shift from a laser-focus on shareholders to a broader one on stakeholders.

Hypotheses

Our hypotheses for this study include the following:

1. The underlying factors contributing to CEOs, senior leaders, and boards of directors embracing stakeholders, in addition to shareholders, are meaningful and different from previous times business leaders have attempted this shift.
2. Organizations with a purpose that focus on a broader set of stakeholders organize, manage, enable, grow, and amplify their people differently than those primarily focused on just generating shareholder value.
3. These practices can be codified and scaled such that they are not limited just to a single organization.
4. These organizations are developing novel – yet potentially standardized – approaches to measuring the impact of their purpose.
5. These practices can positively impact an organization’s ability to generate shareholder value.

As alluded to above, this isn't the first time business leaders have focused on broader social good. However, we believe there may be some systemic changes, such as global climate change, that are different from previous iterations of this attempt. In this research, we plan to identify those factors and better understand if it really is different this time.

There are numerous examples of organizations who are already attempting to be more purpose-driven. We believe that there are similarities in these organizations’ people management practices.

We plan to better understand:

• What does “purpose” mean in these organizations and how is it measured?
• What does “purpose-driven” mean in terms of how organizations attract, engage, develop, and retain their people?
• How, overall, is the employee experience different at purpose-driven organizations?
• What do leaders do differently at purpose-driven organizations?
• What are the implications for HR?
• How do purpose-driven organizations track their quantifiable impact on stakeholders (e.g., revenue, profitability, engagement)?

This Project

We examine the following concepts in this research project:

So what's been happening in the D&I tech space since our last check-in? Lots!

This is one of the fastest-growing tech areas today – with some existing vendors adding capabilities and tools focused on D&I to existing platforms, while solutions from new vendors pop up just as quickly. At the same time, issues surrounding bias continue to heat up as do the mounting concerns globally about data privacy and breaches. In the midst of all this, the human element remains at the center – and this article takes a look at the latest, and what organizations need to know to navigate these technologies and deal appropriately with their people.

The end of 2019: What's happened in the last 6 months?

It’s that time of the year again when we check into all that's been happening in the world of diversity and inclusion (D&I) technology, and update you on the new technologies that we've seen or read about in the past months. This is our 2nd update on the good, the bad, and the new since we published our D&I tech report in February 2019. You can read our previous update, published in the summer / fall of 2019, here.

The good

Sexual harassment and discriminatory practices at the workplace continued to make headlines following the #MeToo movement. In a study conducted by the National Women’s Law Center on the recent policy changes related to workplace harassment, the center found that 15 U.S. states have passed new laws protecting employees from harassment and discrimination. The policy changes have made it riskier for employers to ignore or not seriously respond to complaints about harassment.¹

Efforts to promote pay parity received a greater push as companies across the U.S. with more than 100 employees were required in September 2019 to disclose their compensation policies for workers of all races, genders, and ethnicities to the Equal Employment Opportunity Commission (EEOC).² While the reporting rules were first issued by EEOC in 2016, it wasn’t until 2019 that they finally came to effect.

Bias in technology, resulting from unconscious bias of product designers, remained a hot topic. To help them solve for this bias, Google put together a product team of 2,000 people to ensure all the products launched by the company address people of all shapes, sizes, and color.³

In an effort to increase transparency for job applicants into the hiring process and hold technology companies accountable for their products used in the hiring process, the U.S. State of Illinois put into effect a law that requires companies to give employment candidates more insight into the algorithms that analyze their interviews. The Artificial Intelligence (AI) Video Interview Act requires that companies must notify and receive consent from the applicants for using AI to evaluate the applicant for a position. Companies must also explain how their AI works and to protect applicants’ privacy by limiting who can view their recorded video interview and delete any video that an applicant submits within a month of their request. The law barely requires any change for companies that are already GDPR compliant.⁴

The bad

Biased algorithms continued to make news. After a study revealed potential widespread racial bias in medical software designed to prioritize which patients receive healthcare, two U.S. senators asked the Federal Trade Commission and the Centers for Medicare and Medicaid services to investigate whether biased algorithms are in use in government healthcare. The study, which was conducted in October 2019, found that an algorithm some healthcare providers use to prioritize access to extra help with conditions such as diabetes systematically favors white patients’ needs over those of black patients.⁵

The new: Technology in the market

The D&I tech market grew significantly in the 2nd half of 2019. A major trend of 2019 was the number of technologies that offer analytics capabilities, leveraged by companies for the purposes of D&I. We also saw a number of solution providers enter this space with tools focused on improving overall employee experience. Further, sexual harassment was a dominant topic, with several new solutions coming to market that specifically help companies provide safe and anonymous venues for employees to report incidents of sexual harassment.

Since our last update (in which we identified 18 new vendors), we came across 15 new (to us) vendors that we want to share with you in the sections below. These vendors are “D&I focused” or “D&I friendly” and have identified them as “new additions” below. Additionally, four of the vendors we have previously covered have launched new products, and we have identified them in the list below as receiving an “update.”

Talent acquisition

• New addition: EZ-ADA helps employees return to work and employers stay compliant with the Americans with Disabilities Act. The company uses machine learning to accelerate unbiased decision-making for accommodations and to issue custom fitness for duty forms for each employee.
• Update: Oleeo, a talent acquisition platform that helps companies minimize unconscious bias during selection process, added insights, and text analysis to their product. The insights allow users to see the diversity of their hiring pool by breaking down applications, interviews, and hires by gender and ethnicity. The text analysis allows them to identify words or phrases used in job descriptions that can appeal to or alienate specific groups.

Figure 1: Screenshot of Oleeo Technology | Source: www.oleeo.com, 2019.

Analytics

• New addition: Cassiopeia offers a solution to analyze a company’s data on communications, surveys, and structure to identify non-inclusive behaviors and take actions to address those behaviors.

Figure 2: Screenshot of Cassiopeia Technology | Source: www.cassiopeia.tech, 2019.

• New addition: Compaas is a fair compensation platform that offers analytics to allow customers to receive insights into their employee compensation. The platform connects with existing HR tools like HRIS, payroll, and benefits as well as stock administration to provide an overview of compensation policies.

Figure 3: Screenshot of Compaas Technology | Source: www.compa.as, 2019.

• New addition: Dandi provides analytics to help its customers with their diversity, equity, and inclusion goals by tracking and providing insights on a company’s hiring, compensation, promotion, and employee retention practices.
• New addition: KeenCorp offers a solution that conducts text and language analysis to identify levels of tension and involvement in internal organizational communications. The Keen Index allows the users to analyze the levels of engagement and connectedness within and across teams and groups.

Figure 4: Screenshot of KeenCorp Technology | Source: www.keencorp.com, 2019.

• New addition: OneModel is a people analytics tool that provides infrastructure to measure, report, analyze, and predict business outcomes. The customers are able to leverage the analytics infrastructure to find insights on their D&I goals and efforts, such as their diversity growth rate and diversity profiles in leadership roles and compare mobility and promotion rates among different diverse groups within the company.

Figure 5: Screenshot of OneModel Technology | Source: www.onemodel.co, 2019.

• Update: OurOffice, a D&I analysis and monitoring platform, launched a turnkey solution that offers assessments on maturity levels of existing D&I infrastructures and policies, and helps customers plan their future efforts to meet their goals.
• New addition: Trusaic enables pay equity analyses to help organizations understand their pay equity profile and address any unexplained pay disparity. The service also includes various diversity metric views and reporting.
• Update: TrustSphere, a solution that conducts organizational network analysis (ONA), launched its D&I MRI product which allows customers to measure inclusiveness using passive ONA signals. By analyzing both inter-team and intra-team networks, the MRI is able to asses the level of homophily, the preference of a group or individuals to connect with others that share common attributes.

Figure 6: Screenshot of TrustSphere Technology | Source: www.trustsphere.com, 2019.

Engagement & retention

• Update: Culture Amp, covered in our original report as an employee experience vendor, launched its Diversity & Inclusion Starter Kit. The kit includes a D&I survey, lessons, and reporting to help companies uncover D&I insights along with actionable tips.
• New addition: People First is a software solution that allows employees to report workplace harassment either experienced or witnessed by them. The solution offers a predetermined amount of time that reports should be resolved. In case it remains unresolved, the report is automatically escalated to a senior member.

Figure 7: Screenshot of People First Technology | Source: www.peoplefirsthr.com, 2019.

• New addition: Spot is another solution offering harassment training and anonymous reporting. It offers a small survey on the working culture of their organization that can be taken anonymously by employees. The company provides an AI bot that acts as a third party between the HR and employees reporting anonymously and passes follow up questions between the two.

Figure 8: Screenshot of Spot Technology | Source: www.talktospot.com, 2019.

• New addition: #Notme is a mobile solution that allows employees to report harassment anonymously. For employers, it allows them to track reports and see patterns of misconduct. The data is stored in the company’s encrypted infrastructure.
• New addition: HRAcuity is an employee relations case management solution. It helps identify, track, report, and analyze issues that are crucial for employee relations. It aims to foster a culture of accountability and provides confidentiality and security for employee relations data.
• New addition: Worklytics conducts organizational network analysis that customers leverage to meet their diversity and inclusion goals. The platform uses nudges to encourage inclusion behavior among employees and drive change.

Figure 9: Screenshot of Worklytics Technology | Source: Worklytics, 2019.

Development & advancement

• New addition: DebiasVR offers diversity and inclusion training through virtual reality by focusing on racial bias. The platform offers gaming and uses avatars based on minorities set in a virtual reality environment to build and develop inclusive behaviors.
• New addition: Ethena provides a solution that allows for customizable sexual harassment trainings. The programs can be customized by sector and by how much the employees taking them already know about sexual harassment.
• New addition: Fishbowl offers a platform and a social network for employees to connect, share knowledge, and seek advice about their industry and work. The platform works with companies to provide mentorship and a safe space for women in various industries to push for pay equity.

Figure 10: Screenshot of Fishbowl Technology | Source: Fishbowl, 2019.

• New addition: Women 2.0 offers a platform for HR teams, leaders, and individuals to access resources and research on inclusion and career development for women. Their platform includes a subscription-based product, The Dot offers resources and analysis provided by the company’s experts that help the customer’s D&I efforts.

Conclusion

Diversity and inclusion continue to be priorities for company leaders; Gartner’s recent research into HR frontline agenda revealed that 82% of CHROs have discussed workforce diversity in the last year with executive teams.⁶ The issue has drawn greater attention as evident by the recent announcement by Goldman Sachs to refuse to take companies with all-male boards public. Investing in employees through fair compensation policies and fostering diversity and inclusion was also one of the focus areas of the Business Roundtable group as CEOs made a commitment to lead their companies for the benefit of all stakeholders.⁷

A positive result of the issue coming to the forefront has been the growing focus on not just committing to inclusion, along with diversity, but actually measuring it to truly meet their D&I goals. A growing number of new technologies, as covered above, are offering companies the means to do that.

If you're interested in learning more about the vendors in the D&I space, you can do so by checking out our tool here. If you are a technology vendor in the D&I space and think you should be included in our tool, but are not, reach out to us here.

Appendix 1: Table of Referenced Vendors & Capabilities

Why we care

Organizational support for gender diversity – or at least the talk around it at executive levels – is at an all-time high. Yet, women still remain woefully under-represented at nearly every level in organizations.

While organizations have taken steps – particularly in performance management (PM) – to address this disparity, the difference grows steadily at each level as more men are promoted than women. The result: men end up holding more than 60% of managerial positions, while women hold less than 40%.¹

Clearly, something happens – something fundamentally different – that changes the upward career trajectory of women, even when they enter their careers on equal footing to men. While there are many potential factors, including work / life integration, employee benefits, leadership development, etc., we know that one of the biggest factors is performance management, as it influences both compensation and promotion decisions. Given this, we wanted to investigate what might be happening differently for the different genders² within PM.

Hypothesis

Our hypothesis for this study:

Given the impact of performance management practices on promotion, it's likely that men and women are having different experiences within PM that are negatively influencing women’s advancement in organizations.

The myth of gender differences

Oftentimes, we assume that, because a practice is fair on the surface, it must result in similarly fair outcomes for men and women. Thus, when we see differences, it can be easy to assume that the individuals are different in some fundamental manner. This is the case with men and women in the workforce, where different outcomes have been explained away by apparent “fixed” gender differences, such as women desiring to leave work more frequently to care for family or women not having the same expertise or competence – especially in critical fields.

Yet, when we dig into these arguments, we find they don’t hold water.

For example, suggesting that women are not as competent as their male counterparts ignores the fact that women continue to earn more college³ and graduate degrees⁴ than men. In addition, while women earn roughly half of the science and engineering (S&E) undergraduate degrees, they're less likely than their male collegiate peers to actually end up participating in S&E occupations.⁵

Further, arguing that women want something fundamentally different from their careers and they're leaving the workforce in droves to have babies and take care of family is not a true representation of turnover rates. Especially when we see that women and men have similar turnover intentions and only 2% of women leaving the workforce do so to focus on family.⁶

The truth is, the different outcomes that we see aren't due to innate gender differences – but instead are a result of the different ways in which men and women experience work. From fundamentally different interactions with managers and peers to policies that inadvertently hinder women’s progress, women experience the workplace differently.

Good intentions: We've paved a PM system full of them

Fairness has been a foundational concept in PM since we started measuring performance. In fact, we began measuring production to help organizations make administrative decisions and determine how much to pay people (an idea still foundational in pay-for-performance approaches). However, as work has changed – so too has PM.

In the last 7-10 years, organizations have taken many steps – often times dramatic ones – to modernize their approach to performance management. While the primary aim of PM redesign was to provide a more growth-oriented approach to drive performance, many of the changes also touched upon ideas of fairness.

Modern PM extends the concept of fairness beyond a paycheck, including:

• Capturing a more accurate picture of performance by rethinking ratings and expanding performance evaluation criteria
• Gaining a more holistic perspective of the individual through more frequent conversations between the manager and employee
• Decreasing bias by increasing the frequency and the sources of feedback (e.g., crowdsourced feedback)
• Ensuring that individuals are evaluated against relevant objectives by setting and updating goals in a continuous and agile manner
• Leveraging PM to develop employees in more meaningful ways (e.g., starting out with career or development goals before determining performance goals, assessing managers on the extent to which they develop employees)

All of these changes – and many others – have been made with good intentions. Organizations want to create PM systems that provide a more accurate picture of performance and foster an environment that is inclusive, fair and equitable to support growth and development. Yet, good intentions and superficial fairness does not mean these practices are experienced by men and women similarly in their day-to-day interactions within organizations.

Creating a level playing field

Given these different organizational realities, organizations need to better understand how their practices play out in reality for women and men. This will likely require organizations to rethink (at a minimum):

• The relationship between managers and employees and how managers are held accountable to developing talent
• The access that all employees have to relevant, value-added information, feedback and critical people / influential networks needed for development and performance
• The underlying theory that employee development is the primary responsibility of employees, when men and women – as a result of their relationships – have access to different types of development and may have different levels of confidence in pursuing development of their own accord⁷
• The way organizations define, identify, and measure disparities between men and women
• The lack of confidence and faith that women – across levels – have in their organizations to actively address gender diversity in real, meaningful ways

These changes could have profound impact on how women experience PM and, ultimately, move the needle on the advancement of women in organizations.

This project

With this study, we want to gain an understanding of the ways in which men and women experience performance management differently. More importantly, we want to uncover ways organizations can move beyond superficial fairness, and ensure that men and women are experiencing the same organizational reality. In our initial discussions, several themes have emerged that serve as the basis for the research:

 

In 2019, we studied how networks and technology could be used to advance women in organizations. Along with the release of the full report, this article summarizes our findings. Gender diversity in the workplace matters, and leaders are taking it seriously. In fact, 87% of organizations say gender diversity is a top priority – up from 74% in 2015.¹ Yet, the gender gap – especially in leadership – is not closing and the number of senior women in organizations doesn't reflect this increasing commitment.

We clearly need a different approach. Organizations should understand how professional networks impact women’s advancement and design initiatives with this in mind.

In our report, Helping Women Rise: How Networks and Technology Can Accelerate Women’s Advancement, we analyzed how our professional networks impede or promote women, and the technologies that help organizations understand and address this issue.

Taking a networked perspective

Our networks connect us to specific groups, people, and information. Inclusion at work – being in the "right" professional networks – can be a critical factor that influences promotion and advancement opportunities. Even though we know that our networks matter, we often don’t build and maintain them with intention.

The bad news? Left to haphazardly emerge and evolve by chance, professional networks can negatively impact women’s advancement.

The good news? Organizations can use this information to help women intentionally build opportunities and networks that increase the likelihood of their advancement.

Before companies begin designing network-based initiatives, they should consider four foundational principles of networks (see Figure 1).

Figure 1: 4 Foundational Principles of Networks | Source: RedThread Research, 2019.

New twists on old classics and novel approaches

Our research identified a handful of common and novel practices that organizations use to help women advance (see Figure 2). The common approaches consisted of some of the mainstays in diversity and inclusion efforts. Novel practices are exciting, but have not necessarily proven to be more effective (yet).

Figure 2: Common and Novel Approaches to Advance Women in Organizations | Source: RedThread Research, 2019.

Each of these practices can – when designed with a networked perspective – address at least 1 of the 4 foundational principles of networks and help women advance.

Take the common practice of mentorship and sponsorship for example. These initiatives haven’t seen much change in how they’re implemented over the years. However, by applying a networked perspective (see Figure 3), organizations can support – or even create – group-based mentorship and sponsorship – a new twist on an old classic.

Figure 3: Group-Based Mentorship and Sponsorship | Source: RedThread Research, 2019.

Novel approaches also benefit from taking a networked perspective. For example, internal gig-work marketplaces – if designed appropriately – help women in organizations create new, diverse connections and help strengthen their ability to standout from others in their network.

Technology’s role

When we started this project, we had high hopes that organizations would share with us tons of insight on how they were using technology to aid in the advancement of women. After all, if social media can use our networks to suggest events we should attend, music we might like, people we may know, and careers / roles that match our interests and experience, organizations should be able to mirror this internally.

Well, we were wrong. Our research found that, overall, organizations are not taking full advantage of the technologies that can help them take a networked approach to support women who want to advance their careers.

Organizations know technology can help; they just aren’t sure what options are available, or where to start. So, we created a few cheat sheets in our report to get organizations started (see Figure 4).

Figure 4. Examples of Technology Cheat Sheets (available in full report) | Source: RedThread Research, 2019.

Learn more

Our report breaks down each of the common and novel practices we uncovered, and how they can address one or more of the foundational principles of networks. In addition, we dive into technology offerings for each of these practices.

For more information on each of these practices and the technologies organizations can leverage to take a more networked perspective, we encourage you to download and read the full report by clicking the image below.

You can find information on the specific practices our research uncovered in short articles – part of the Women & Networks series – including:

• Employee Resource Groups: Taking a Networked Perspective
• Mentorship and Sponsorship: Building Broader Networks
• Leadership Programs & Conferences: Building Networks for Women
• Gig-Work Marketplaces: A Novel Way to Advance Women
• Articulating Invisible Information: Leveling the Playing Field

Excerpt from: Diversity & Inclusion Technology: The Rise of a Transformative Market

On the surface, technology seems like the magic bullet for helping conscientious companies combat D&I challenges. After all, we recognize that no people are truly free of bias, so why not rely on bias-free technology? That all seems perfect until we reflect on how software is created and chosen by those same biased people. So how should we think about AI in the context of D&I?

In our recent study with Mercer, we examined the emerging market for D&I tech, and we also tackled the question of AI and raised some questions about its inherent benefits and risks.

Here is an excerpt from that report which looks more closely at the role of AI in D&I:

The potential dangers of AI in D&I technologies—and some ways to address them

To debunk some of the myths associated with the use of these technologies, we’ve outlined the potential dangers and limitations of using AI when it comes to decision making. We’ve also suggested some considerations leaders can take into account, below to become better informed consumers of AI products.

Potential Dangers of Artificial Intelligence in D&I Applications:

• Decisions based on AI algorithms have grown in complexity (often lacking a clear logical flow that humans can understand), opaqueness (as of result of limited transparency, regulation, and accountability), ubiquity (AI has become mainstream), and exclusiveness (especially if developed by small and/or homogenous teams).
• There are increased concerns around algorithmic design stemming from inadvertent human biases that can embed unintended discriminatory features into the algorithm. Introducing diversity and inclusion principles into algorithmic outcomes can be difficult if said principles are not practiced before designing the algorithms because machine learning is based on existing data.
• In instances where there is limited human oversight and involvement in the development and/or implementation of AI technology, there may be limited transparency and accountability on how predictive tools reach their decisions. AI systems are like black boxes, making it hard to identify potential bias and analyze decisions reached by predictive tools.
• AI can amplify stereotypes, adversely impacting underrepresented and marginalized populations.
• Widespread use of AI has moved fast, with little scrutiny and oversight from regulatory bodies. The responsibility of upholding ethics is often in the hands of AI developers, which brings the need to establish and sustain a code of AI ethics to the forefront.

Five Key Considerations for Using D&I AI in Organizations:

1. Recognize that AI and algorithms are not neutral because they are created and trained by humans with innate biases. Therefore, make every effort to understand their full benefits and limitations. Ask D&I technology vendors if they conduct algorithmic audits and risk assessments to determine how their predictive tools reach decisions and their potential impact on underrepresented populations.
2. Become well-versed in understanding your D&I technology data by becoming aware of how D&I data is used, stored, and processed within algorithms. Use your internal HR and workforce analytics to monitor and better understand the impact of using D&I technologies on your specific organization.
3. Establish a governance process that maintains a holistic view across sources of data and algorithms.
4. Formalize and communicate a standard organizational framework that establishes a shared understanding of how and when your organization makes decisions stemming from AI technologies to ensure transparency and accountability among stakeholders.
5. Use artificial intelligence information directionally, as one piece of the larger puzzle, rather than as an absolute. Consider the macro-level picture of AI data by incorporating other sources of information to better substantiate your decisions.