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Chief Diversity Officers: Who They Are and When You Need One

As the modern workforce grows more global, and as companies find themselves working more and more across national borders and incorporating talent from a wide range of backgrounds, the issues of diversity and inclusion have come increasingly to the forefront of business life. Competitive companies need to think through issues like discrimination, harassment, equity in hiring and promotion practices and in general making the workplace welcoming and safe for everyone. The human resources position responsible for coordinating diversity efforts across the organization and aligning them with long-term goals is called a Chief Diversity Officer.

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What is a chief diversity officer (CDO?)

It’s common to imagine diversity-related positions as being mostly about the hiring pipeline, and about efforts to include candidates from underrepresented groups. The role of a chief diversity officer, or CDO, today goes well beyond this: work related to diversity and inclusion is relevant to just about everything an organization does.

For that reason, CDOs are a highly in-demand leadership position that’s responsible for a very wide range of equity, diversity and inclusion initiatives. They typically start their tenure by developing organization-wide strategies, policies and training programs for these issues. They also find ways to oversee and evaluate their impact on an ongoing basis and act as a champion for diversity at all levels of the company. Their overall mission is to ensure a safe, vibrant and rewarding work environment for everyone in the company.

CDOs can be hired by businesses in any sector, as well as by governments, universities, nonprofits or charities. It’s a senior role that generally reports directly to the president and CEO, with whom they act as a strategic partner. They need to be highly educated, with a full understanding of at least nine commonly-identified dimensions of diversity and how they interact with other elements of organizational culture, general society and larger forms of institutional privilege:

  • Class
  • Ethnicity
  • Gender and gender identity
  • Income
  • Mental and physical abilities and characteristics
  • Race
  • Religion
  • Sexuality

A successful diversity executive can help an organization to go beyond simply denouncing discrimination and actually manifesting a day-to-day culture that actively promotes inclusion and battles inequity.

What are CDOs responsible for and what value can they bring to a business?

By leading their organization’s diversity, equity and inclusion efforts (DEI), chief diversity officers can have a positive impact on business outcomes in several ways.

First, they can prevent needless conflicts and crises that reduce a company’s productivity and its credibility with consumers, which is particularly important in an era when a majority of consumers prefer to purchase from brands whose purposes and actions align with their values. It simply matters to the bottom line to have a positive stance on DEI and an organization meaningfully structured to support that stance.

Second, they can make it easier for a company to raise funds, enter new markets and negotiate new partnerships with foreign companies and organizations. An awareness of DEI ensures that there are no unforced errors in etiquette or public messaging that could hamper the company’s ability to connect with new people and to get the most out of potential out-of-organization ties.

Third, they can ensure a workplace where employees trust in the fairness, transparency and equity of management and the genuineness of its commitment to delivering a company culture that protects and promotes everyone’s wellness. That’s a boon for morale, productivity and innovation, and having diverse perspectives in a company leads to measurable improvements in decision-making: it is a knowledge-based asset that makes it easier to cope with complexity.

There are a variety of initiatives that a chief diversity officer needs to engage in to deliver these benefits:

  • Build strategic plans to align DEI efforts with the company’s goals for workforce productivity, recruitment, marketing and community relations
  • Design and implement metrics and reporting systems to assess the impact and return on investment of DEI-related initiatives
  • Lead committees or working groups on DEI to plan and implement policies
  • Provide DEI training and education for employees
  • Organize and implement a bias incident response policy
  • Enhance recruitment, hiring, promotion and retention of diverse employees
  • Actively support employees from diverse backgrounds
  • Collaborates with key personnel at all levels to drive DEI-related messaging and awareness and ensure company communications are consistent with DEI policies
  • Ensures the reflection of DEI efforts and policies in everything from daily work to marketing materials, choices of suppliers and vendors, and community-facing activities
  • Stay current with developing trends in DEI, assess their potential impacts and work with senior management to implement new initiatives whenever necessary

Though it covers many of the common bases, even this summary of what a CDO may need to do is far from exhaustive. There’s no question that being a chief diversity officer is one of the most challenging tasks an executive can take on.

How to determine if your business needs a CDO

The fast-moving nature of the modern marketplace confers an advantage on companies that are able to establish and effectively protect a values-based brand, deliver reliable and complex decision-making, get the most in productivity from their staff and compete in the job market for the best possible talent. Fundamentally, any business that employs more than fifty people and hopes to stay competitive can benefit from the efforts of a diversity executive.

There are a few dos and don’ts to keep in mind as you contemplate how best to bring a diversity executive into your business.

Do: Be prepared to fully commit to diversity

The only way to realize the full benefits of having a diversity executive is to make them a genuine partner in the strategic planning of the business who has the full support of senior management. Attempts to bring on diversity executives in a purely symbolic or figurehead role, or to have them issue fine-sounding pronouncement about DEI that none of the organization’s policies, structures and actual practices reflect, are doomed from the outset. It can quickly become visible to consumers if a CDO isn’t playing a meaningful role in a business’s decisions, in which case the boost in credibility, productivity and effective decision-making they could have provided simply won’t happen.

Don’t: Wait until you’re in a crisis

Too often, chief diversity officers are crisis hires, brought on for damage control after a company has disastrously miscued on DEI-related messaging or policy or suffered from an embarrassing misfire on bias incident response or employee discrimination or harassment. By the time these hasty hires are taking place, severe damage has often already been done and permanent hits to a brand’s public profile and relationship with consumers may have been sustained. DEI-related strategy, planning and policy is far more effective — and more convincing — carried out proactively instead of belatedly.

Do: Provide budget and resources for DEI initiatives

A CDO can’t fix any organization’s bias-related problems and blind spots overnight. They need budget and personnel resources commensurate with the size of the organization they’re working with, so it’s important to be prepared to invest. A realistic budget for implementing the whole range of training, education, hiring and strategic planning activities a CDO needs to carry out might range from $500,000 for a small business up to $2,000,000 for a larger company.

Many companies are just beginning to implement DEI strategies and policies and working toward aligning their actual policies with their stated commitments to diversity. Getting ahead of the curve on hiring a chief diversity officer is one of the most important commitments a business can make to stay competitive.

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