We all know times are tough. We read daily about some industry sector–retail, financial services, health care, technology or manufacturing–experiencing reductions in force (RIF) in the thousands! These dislocations are painful for the affected employees and the colleagues left behind. Human resources is usually tasked with drawing up layoff lists, coaching managers on what to say and explaining severance terms. Corporations, in their quest to reduce headcount, approach layoffs with the precision of a surgeon’s scalpel or the blunt force of a sledge hammer.
In my role as a managing director and head of the diversity and inclusion practice for a global executive search firm, I am in contact with chief diversity officers on an ongoing basis. Diversity and inclusion (D&I) executives have expressed dismay that many of the gains made in diversity recruitment are being rolled back by business retrenchment. Many a chief diversity officer (CDO) finds themselves watching the dismantlement of succession planning models that have positioned women and minorities to step into new opportunities that no longer exist. Understanding that business necessity makes headcount reduction necessary, they either accept the layoff mandate or lose credibility. Those who decide to embrace the responsibilities associated with corporate downsizing seem to take on one of four roles:
The Grief Counselor: This executive sees his or her role as providing counseling and resources to laid-off employees. The CDO or someone on her or his staff may have personally recruited affected workers, and he or she will provide resources and introductions to ease the employees’ transition. They function as a transition hub for employees making sure that employees get resumes formatted as well as receive interview tips and job leads. They lament the loss of talent and show great empathy for affected employees. CDOs that play the Grief Counselor seldom are involved strategically with the decision on who gets laid off.
The Referee: This professional understands the need for reductions, but wants to make sure there is no adverse impact for protected classes. She or he will work with the legal department and do a statistical means test of which protected-class employees are slated to lose their jobs. If statistically there is an over-indexing of protected-class members, he or she will try to achieve greater balance. The referee sees their role as a compliance officer. If it appears the layoffs are being carried out without bias, this person will inform senior management to that effect.
The Activist: This executive took an active role in all the social movements before joining corporate America: civil liberties, gender equity, racial justice, same-sex marriage, domestic rights, nuclear disarmament, etc. Such individuals are revered for their willingness to “speak truth to power.†The Activist is often seen as the public face of the company. This is especially true of CDOs who work for consumer companies. Activists often are the most upset at the prospect of layoffs wiping out minority
gains. They will camp outside the offices of any senior executives whom they feel they can persuade to save as many jobs as possible. Typically in the face of economic pressures, this approach is not effective; however, the Activist takes great pride if he or she is able to save a few token jobs.The Partner: The CDO in the Partner role has a seat at the table. Partners are members of the executive committee and are involved in discussions about proposed layoffs. They provide adverse-impact statistics to the group before any decisions are made. Partners look at the proposed gaps in the organization and determine which diverse executive can scale up and take on new responsibility. The reality is that whenever an organization reduces headcount, the remaining positions often become bigger, given that the same amount of work needs to be done — but with fewer people.
A CDO in a Partner role cannot prevent layoffs, but she or he can ensure that they are fair and that the remaining minority employees are positioned for the coming upside. In doing so, the CDO not only becomes an integral part of the change management process, but more importantly uses diversity as a tool to achieve greater organizational strength and effectiveness.
Since most would agree that having a CDO who is a strategic partner is desirable, one may logically ask why doesn’t it happen more often? It’s been my experience that there are four barriers that hinder CDOs from playing a more robust role at a company:
The revolving door of CDOs. With an average CDO tenure of less than 3 years, how can one develop true lasting partnerships?
My way or (I go down) the highway. Many CDOs have a clear but often dogmatic view as to how D&I should be implemented (which is too often based on what worked at one of their past D&I posts). They need to be more flexible in their approach.
Business people partner with other business people. As many CDOs don’t have a deep business background, this makes it much harder for them to be seen as a business partner. They lack the commercial understanding and don’t speak the common language of the astute business professional. CDOs who don’t understand their business have a difficult challenge making the business case for diversity and inclusion.
Lack of diversity. The longer we continue placing primarily women and people of color into the CDO, role the longer we reinforce the notion that the important work of D&I is not an important function for all executives to consider. Since the utilization of human capital is essential to the success of every business doesn’t it make sense for companies to be more inclusive?
I have observed all four types of CDOs. They are not mutually exclusive roles. The best diversity and inclusion executives are a mixture of all four. To be an effective CDO one has to call for a level playing field. You have to be an ombudsman and you have to be courageous when you smell “something rotten in Denmark.â€Â As a search professional, I seek out clients who want a full partner in their CDO. The full-partner CDO can report to the Chief Executive Officer or the Chief Human Resources Officer. More important than the reporting relationship is the substantive nature of that connection. A partner CDO has to be involved on the front end of succession planning, compensation, recruitment, and training and development.
Some may feel that their organization doesn’t have a partner CDO. The good news is this can change. Although I do believe that a savvy CDO can become a true partner, it will take a lot more than just training, coaching, and commitment to change. We need to open up the dialogue and talk about the existing CDO reality. It is amazing how far this function has come. Who would have believed that so many CDO positions would ever exist? That CEOs would care where their company ranked in the various diversity polls [such as the Black Enterprise Best Companies for Diversity] or that the business press each year would trumpet best company for minorities, working women, gays, physically different etc. That being said, what has brought us here will not get us to the next level.
Gregg Smith is managing director at Boyden Global Executive Search in New York