Diversity, Equity and Inclusion Lighthouses 2023
Diversity, equity, and inclusion (DEI) is at an inflection point: companies and institutions have demonstrated positive intent and increased discussion and activity, but data shows that progress is slow. In 2020, the global market for DEI—that is, dollars spent by companies on DEI-related efforts such as employee resource groups (ERGs)—was estimated at $7.5 billion and is projected to more than double to $15.4 billion by 2026.1 Yet, as just one example, at the current rate it will take another 151 years to close the global economic gender gap at all levels.2
Greater clarity on what works—and what does not—can help leaders effectively create sustainable change.
The Global Parity Alliance—a cross-industry group committed to advancing DEI—launched the DEI Lighthouse Program to identify initiatives that have resulted in significant, quantifiable, scalable, and sustainable impact and surface what those initiatives have in common. The ambition is that equipping leaders with these best practices will help focus DEI efforts on what works best, ultimately contributing to faster, scalable progress across the global business community and surrounding ecosystems.
For the full results of this work—including key success factors common across initiatives that yielded significant impact, real case examples of effective DEI initiatives in practice, and actions that employees can take at each level of the organization to support progress on DEI—read the full report written in partnership with the World Economic Forum.
Five success factors are common among DEI initiatives that had significant impact
While the state of DEI efforts varies by company, industry, and geography, a growing number of management teams have recognized the importance of, and urgency behind, joining the conversation and taking action to make progress on DEI.
The Diversity, Equity and Inclusion Lighthouses 2023 Report identified five success factors common across the DEI initiatives that yielded the most significant, scalable, quantifiable, and sustained impact for underrepresented groups. The success factors are: a nuanced understanding of the root causes; a meaningful definition of success; accountable and invested business leaders; a solution designed for its specific context; and rigorous tracking and course correction.
The descriptions below include real examples from a selection of the lighthouse case studies featured in the report. The lighthouse initiatives were selected—by an independent panel of DEI experts—for exceeding a predetermined threshold for significant, quantifiable, scalable, and sustained impact for underrepresented groups.
1. Nuanced understanding of root causes
Identifying your company-specific DEI opportunity areas can help to inform prioritization of efforts and investment, goal setting, and solution design. This process begins by analyzing relevant data and sources of insight to deeply understand the challenges and root causes from the perspective of those most affected. This fact base likely includes employee feedback surveys and input from the target population obtained through focus groups and interviews.
Lighthouse case snapshot: US retailer Walmart created an initiative to improve social mobility for employees through free education and upskilling. While conducting a routine equity and accessibility assessment of their processes, Walmart found that its frontline workers, 39 percent of whom identify as Black or Hispanic/Latino, were not securing higher-paying roles at the company. Through a deeper retention diagnostic, Walmart learned that this was due to the skill sets or degrees required to move up internally, and the prohibitive time commitment and cost needed to obtain those skill sets. Initiative impact included 20 percent higher rate of retention among program participants and 87.5 percent higher likelihood of promotion for Black program participants versus nonparticipants.
2. Meaningful definition of success
After prioritizing an opportunity area, defining success by setting clear, measurable, near- and long-term goals, can help guide the effort and assess effectiveness. Then, articulating a case for change—the rationale for why the organization is focusing on the effort and how it connects to the company’s values, mission, and business outcomes—can help move employees to action.
Lighthouse case snapshot: Energy company Schneider Electric developed a global-local pay equity framework (GPE) to close pay gaps in their organization, globally. In the first few years their main objective was scaling the GPE across their entire global footprint (85 percent coverage by 2017 and 95 percent coverage by 2020). In 2021 they set a goal to ensure that the pay gap did not exceed 1 percent for all employees by 2025. An additional companywide objective was to achieve 50/40/30 gender balance by 2025. Schneider Electric’s cases for change included to: allow all employees to be compensated fairly and equitably based on performance; to break down all barriers impacting gender equity within the company; and to improve the organization’s competitive standing as an employer of choice and to allow the company to attract and retain more diverse talent. Initiative impact included: 99.6 percent of workforce covered by the GPE framework by 2020 and a year over year improvement in the pay gap for women since the launch of the GPE initiative.
3. Accountable and invested business leaders
Deep commitment from executive management can help set initiatives up for success by signaling the importance of DEI and making sure initiatives have the right resources. The CEO and senior business leaders can support by: setting the effort as a core business priority, being held accountable for outcomes and not just inputs or activities, role modeling and leading desired change, and allocating sufficient resources to the initiative—budget, expertise, and timeline.
Lighthouse case snapshot: Consumer cosmetics company Shiseido set out to accelerate gender parity at board and executive management levels for women in the Japan office and in the local business community, through inclusive work policies, process redesign, upskilling, and community impact. This was a priority for senior leadership starting in 2014 when the CEO made DEI a key pillar of the company’s corporate strategy. Senior business leaders were held accountable for improving the ratio of women managers and leaders through a “social value indicator,” which factors into performance metrics and are tied to their compensation. The CEO also directly contributed to efforts including by: promoting the training program, coaching program participants, personally reviewing decisions on female candidates in the succession planning process, and serving as inaugural chair of the Japan chapter of the “30% Club.” Initiative impact included: ~24 percent increase in the ratio of women leaders from the beginning of 2017 to the beginning of 2022, and 44 percent of program participants promoted to vice president or director roles from 2017 to 2021.
4. Solutions designed for context
Designing solutions to address the root causes of the problem, including by making any needed changes to key processes and ways of working, can support effectiveness and sustainability. Setting the solution up for success also includes equipping employees with the knowledge and skills to support the desired change and encouraging their contributions.
Lighthouse case snapshot: Steel manufacturer Tata Steel launched an initiative to improve intersectional gender diversity for employees by addressing key root causes, including: stereotypes and lack of support structures, legal and geographic constraints, enduring consequences of historic marginalization, noninclusive policies, and unsafe work practices. The multipronged solution included a variety of efforts such as upskilling, career support, job opportunity creation, and inclusive redesign of policies and work infrastructure. Impact included launching the first-ever transgender hiring program in India.
5. Rigorous tracking and course correction
Measuring progress against the aspiration can help leaders monitor the solution’s effectiveness, adjust the approach to increase impact, as needed, and more accurately direct the use of company resources.
Lighthouse case snapshot: HR consulting firm Randstad launched an initiative to support economic empowerment for at-risk women in the United States through upskilling and opportunity creation. The company tracked key performance indicators and participant feedback—including through one-on-one check-ins with participants at key stages of the program—to track participant completion rate and monitor program effectiveness. After the first year, Randstad added childcare and professional clothing to the program’s offerings after learning that participants needed these services to successfully complete the program and secure long-term employment. Impact included supporting 1,000 at-risk women, with 95 percent of apprenticeship graduates advancing into long-term job opportunities through the program.
Applying the key success factors to your DEI initiatives
Engagement at each level of the organization—from individual contributors on the front lines to the CEO and board of directors—can help make meaningful progress on DEI.
- For leaders of DEI strategy and initiatives: consider this checklist to apply the key success factors to your organization’s context
- For all members of an organization: consider these simple actions to help create inclusive environments and contribute to driving impact in your organization today