Leading Change with Effective DEI Communication Strategies
August 16, 2023
Join host Felicia Shakiba in an insightful conversation with Dr. Greg Pennington, Managing Partner of the Pennpoint Consulting Group, Former VP, Human Resources for Johnson Controls, and Harvard alumni. In this episode, Dr. Pennington delves into the crucial realm of Diversity, Equity, and Inclusion (DEI) from a leadership perspective.
Managing Partner of the Pennpoint Consulting, Former VP, HR for Johnson Controls, & Harvard alumni
Felicia Shakiba 00:04
Hello everyone. I'm Felicia Shakiba, and you're listening to the CPO PLAYBOOK podcast. Join me and my guests as we feature insightful conversations with HR leaders, people scientists, and executives from diverse industries and functions, offering valuable perspectives on the future of work. Discover a unique outlook on navigating the complexities of the modern-day working world, exploring innovative strategies in talent management and corporate culture from the Chief People Officer's perspective. Tune in to stay ahead of the game when it comes to all things people-related.
Felicia Shakiba 00:37
In the realm of Diversity, Equity, and Inclusion, a thought-provoking survey conducted by WebMD has unearthed a disconcerting reality. Astonishingly, 89% of participants find themselves employed by organizations boasting DEI programs, yet a disheartening 62% harbor profound doubts regarding the efficacy of these initiatives, with a staggering 46% expressing personal disappointment. Forbes suggests that this disillusionment may be attributed to a lack of unwavering commitment from upper echelons of management, coupled with a perfunctory checkbox approach that undermines the true potential of DEI&B endeavors.
Felicia Shakiba 01:29
Interestingly, the scholarly work of Josh Bersin elucidates the significant advantages of diversity, revealing that diverse companies enjoy 2.3 times higher cash flow per employee, while Gartner's research establishes that inclusive teams can enhance performance by a remarkable 30%. The imperative to effectively communicate DEI initiatives from top leadership becomes unmistakably apparent, as it resides at the very epicenter of cultural transformation, possessing the power to either fortify or fracture the success of these programs. Nonetheless, the challenge before us looms large: How can leaders deftly disseminate these critical messages throughout the organization, effectuating meaningful change in the process?
Thank you very much, Felicia, I'm excited about having a chance to spend some time with you.
Felicia Shakiba 02:54
What are some common factors or reasons that contribute to the lack of commitment from upper management when it comes to implementing effective DEI initiatives?
Dr. Greg Pennington 03:06
It's a great question, and I think part of the context for me is to put DEI initiatives in the same bucket as organizational change. So when you think about an individual and team and an organization's, probably predictable resistance to change, we shouldn't necessarily think of DEI as unusual. The more and more emotion you put into a plan change, the more likely you can get the positives and the negatives. If I'm really emotionally engaged, then I'm probably going to stick with it even more when I run into some obstacles. And if I'm emotionally engaged in the sense of, yeah, this is gonna cost me something, then I'll get my own reasons why... I'm not quite sure I want to make this change.
Dr. Greg Pennington 03:55
So I will start off by saying, Let's appreciate that everything we learned about managing change and leading change and resistance to change is at least a piece of answering the question about what gets in the way of organizations and leaders in particular, having what we might consider full commitment to the DEI. There's this emotional piece about diversity, equity and inclusion that probably exaggerates all those fundamental things we know about. Why do I want to change, and will actually be able to pull this off? So that's what I will start with.
Felicia Shakiba 04:29
And, you've been working with many leaders in your time. So could you share some practical strategies or examples of effective communication and messaging from top leadership to drive meaningful change and DEI efforts?
Dr. Greg Pennington 04:45
Well, two quick examples on the mind. I remember talking to this audience of senior regional managers and is all on this umbrella, the organization financial institution at the time, and so I was brought in to try to add this a rational logical pitch to this group of 100 top leaders. And I saw in the corner of my eye, the president of the organization, listened for a while, and then he clearly inserted himself in the conversation and said, Greg is trying to give you a rational reason for doing this. Let me tell you that, as far as I'm concerned, and as long as you want to work in this organization, we will implement these initiatives, and theirs was focused around increasing leadership with women. That clear cut message that if you want to be a part of this organization, this is what you're going to do. Now, some people would say, what do you get from that kind of authoritarian? I mean, you get immediate compliance. And there's certainly some truth to that.
Dr. Greg Pennington 05:46
But when you talk about what are some approaches to communicating, I think there is one that sometimes we overlook, and that is the power of the position, power that leadership saying, This is what we're going to do. The other one that goes along with it is, what's the business case? And that's kind of been the perennial starting point, what's the business case for DEI, and to the degree the organization has a compelling business case. Compelling might be in the sense of, unless we do this, we're gonna be out of business, or compelling might be, you know, you can only squeeze so much percentage of growth out of a mature market, I think in complement to the business case has been the values case. So I do remember at work on someone who was the CEO of a communications organization, and they were coming through this period of time, when federal requirements about diversity were become a little more lacks. And he said, regardless of what the federal commission does, this is who we are. I use that as an example of a value. So those companies articulated through that leader that says, This defines us, this is the nature of who we are, these are the values that we really represent. You know, the reason why we call ourselves Felicia and Company is defined by this. So we can't be who we want to be, if we're not effectively pursuing something like DEI, or however they further define.
Felicia Shakiba 07:15
Yeah, and then that makes sense, I think the values is a perfect example of a starting point, in order to help carry through what those initiatives might be. So how can leaders navigate the challenges and resistance that likely will arise when attempting to implement transformative DEI initiatives within their organizations?
Dr. Greg Pennington 07:38
I'll probably go back again, to what we know and should except as the power that goes along with the position, and part of that power, influence and impact is, to the degree the organization identifies with him or her or them, right? Some of this is compliance just by because of your authority, you can fire me or, you know, otherwise, negatively impact me, but some of it genuinely is, I can relate to and connect with that senior leader. So I will put in this category in terms of driving it forward further, Felicia is those senior leaders that really can tell a very personal compelling story about their experience with diversity, equity and inclusion. And it might be their personal story in the sense that had this person working for me, they were doing a fabulous job along the way. And then I came to work one day, and they said they were leaving and, and I asked them why. And he said, I never felt that I really had an opportunity. So it suddenly dawned on me that something about them being different, was interfering with their effectiveness and their future. So be able to tell that story has been my experience, that when I didn't fully utilize all my resources, this is what happened.
Dr. Greg Pennington 08:52
There's another version of that personalization, that really sometimes I've pulled out by saying what's the earliest most vivid memory you have of being different or when your difference made a difference? Sometimes people scratch their heads, people... last time I asked a couple of white guys just to be real visual about it, they're there sitting at a table scratching their head and saying, We can't come up with an example of when we were different. So that becomes a real challenge because, I have, if I have no foundation, no experience at all, about being perceived as different, however you want to define it in the moment, but different from a human standpoint i.e. I moved from one neighborhood to the next neighborhood; my family's parents were divorced, others weren't; I was in a classroom I was only blond kid and everyone else was brunettes, something some early experience that you can relate to that says that I'm different and because of that difference that impacted me. When I say that story with a CEO or that question what a CEO, they said, Well, you know, most people don't realize that I went to high school, this is a white male.
Dr. Greg Pennington 10:00
Most people don't realize that I spent my high school years in Hawaii. In Hawaii, they can call me a “howley”? I didn't know what that meant, right. And so when someone finally told me it essentially meant white guy. But that's enough of a connection. For him to be able to tell a compelling story about someone put me in a category gave me another label, to the degree that CEO can stand up and say, I don't know exactly what it's like being black or Hispanic or Asian or female, I do remember when somebody put me in a category based on their surface reaction to me, and at least from me, personally, that had me wondering, imagining, so it's not exactly what you say you might be going through. But let me tell you, I have a little bit of experience here. And I know it impacted me in this way. So when I've seen senior leaders tell those stories, it has become a real compelling way of the rest of the organization saying that she got it, he's got it. And they not only view this diversity initiative as a business, or even as a values case, they really view it as a personal case. And that really is modeling the rest of the organization, find your reference point, that's going to make you personally appreciative of what we're trying to do, personally invested in some positive outcomes of it.
Felicia Shakiba 11:28
And essentially, that relatedness is helping leaders build trust.
Dr. Greg Pennington 11:33
Sure, there is always an element of interconnectedness in a relationship, like you're saying, and trust. Sometimes we start off all those arguments based on logic. So when I appeal to your head, this is why we're going to downsize is why we have to lay off as why we're expanding. Here are the numbers. That appeals to certain people and in certain ways of processing, my excitement about changing my resistance to change. We took that simplistic model about resistance to change, it says I have to appeal to the head and to the heart. That's the personal, emotional lived experience part of it. And it's also in that category of what's in it for me, and how will it impact me positively and negatively?
Dr. Greg Pennington 12:17
And then the third one- head, heart and... the third one is hands. Do I have the skill set to get this done? Do we have the resources to get this done? Will I have the support mechanisms to get this done? Will I have the tools and the processes to get this done? So it's beyond imagining and wishing and hoping and feeling, it's beyond all of that and has to include technically what are we going to do. And I think that's where you get into a lot of... I think, some great examples over the years on what turns out to be a moving target. If we know we have a challenge about representation, and we know from the beginning, identify people that will work here, just the simplicity of saying, where do we usually go shopping?
Dr. Greg Pennington 13:01
If we usually go shopping in a fish market, we're not going to get beef.
Dr. Greg Pennington 13:05
If we usually go shopping in this pool of feeder schools, we know the profile we're going to get. So even without saying let's do this from a define affirmative action standpoint, even without saying that, just realizing process wise, what advantage will we get if we went to a school in another city? What advantage we would get if we went to some less obvious schools, and started from the standpoint of talent wars and finding talent. If I go somewhere where no one else goes, then I might be the one that uncovers those gems. And if I see someone coming here that never comes here, thinking about those candidates, I might think, hmm, that's interesting. I think we've made some progress, particularly when you think about the processes that have been implemented, whether it's recruitment and selection and development and sourcing of businesses. We're not totally there yet. And if we look at different sources, not only will we potentially uncover some gems that others haven't uncovered, but it also just gives us a much more rich flow of choices that we'd react to.
Felicia Shakiba 14:15
So can you provide insights into the potential benefits and advantages that organizations can experience by prioritizing diversity and inclusivity as highlighted in the research by Josh Bersin and Gartner?
Dr. Greg Pennington 14:31
Yeah, I mean, it's one of the things that people often talk about in terms of the benefits and is insightful in one sense, and it also is in a category, we have reasonable to believe this anyway.
Dr. Greg Pennington 14:42
So, that the creativity that comes from diverse perspectives, when we're tackling a problem that doesn't have an obvious solution.
Dr. Greg Pennington 14:53
So those problems that are pretty clear cut, if you think about the transformative ones or the stuck ones, there's tons of research that would say, diverse teams that are effectively managed, right.
Dr. Greg Pennington 15:06
So there's something about that leadership of the team, that frames the problem and opportunity in a way that invites a variety of perspectives.
Dr. Greg Pennington 15:15
We get a variety of people around a complex problem, then we'll take advantage of those different perspectives, different orientations, and we may have this breakthrough idea about where we want to go.
That's one piece of insight. Another piece of insight that all of those that are in the employee engagement arena, really have some compelling data around... but an insight that I would underscore is that when people feel as though they're valued, when people feel as though they belong, when people feel as though they're connected to the mission and purpose of that organization, all the way down to a small team, that's when you get this phenomenal increase in how people use their discretionary effort.
Dr. Greg Pennington 15:57
A more concrete example, those companies that are pay still, by the hour, when you saying, employees say, I don't get paid for that, or, you know, I'm only working nine to five, or I'm doing exactly what my boss told me to do, when you move those persons to the point of, I have some value for you, and I appreciate your perspective, your contribution, and I have this level of trust, even if you go at it in a different way than I am those are the employees that feel as though I'm a part of this organization, I belong to this organization. And even if it goes past five o'clock, I have this commitment to getting this done. So that's a little bit more of an insight, like an aha piece, to the degree people are invested in the organization and feeling as though they have value. That's the other part about it, valued and their contributions of value, you'll find this 30% increase on people argue in how they use that discretionary effort. I'm coming back to Felicia, because I'm thinking that maybe we shouldn't go in this direction. And I know she's gonna say, Well, you think things differently than I unless - let's talk that through. So all that's a huge kind of a insightful piece.
Dr. Greg Pennington 17:13
And I do think that probably a library full of data that we really should give credit to the marketing departments. For instance, when you do that market segmentation, I understand from this population, this demographic, this zip code, people actually respond to this feature of our products differently than others. We say that in an elegant way, you know, you really are putting yourself at risk to stereotyping and so forth. But there's some factual data in there that says that when I understand how women think, generalization, when I understand how, first generation schools, students think, when I understand how important X dynamic is in the Latina community, then it might be just a little tiny twist on the products and services that we offer that makes a big difference. And when I say little tiny twist, in a measurable, but maybe some ways small, incremental change, trying to make substantial profits on 10% margin, for instance, you know, another 1% is huge amount of, you know, impact.
Dr. Greg Pennington 18:25
And I go back to this financial wealth management group, as an example, but just a little nuance of some research they actually done about what was the final decision that prospective clients made about coming to this firm, or that firm? And relatively speaking, their black potential customers ended up saying, Well, I heard the numbers, but I'm, I'm going to trust you. I'm saying relative because it's not everyone, right, but relative, and it's always a visible contrast between population that was predominantly white males that would say, I like what you say about the numbers. The numbers make sense to me. I'm going to go with that. So just that little nuance of final decision based on compelling logic on the finances, final decision based on and I trust what you said. And so the pitch changes just a little bit, right? That totally don't dismiss the logic, because that population will trust you blindly. Don't dismiss the trust, because of it's purely on numbers, and they'll go to the next set of numbers that are more compelling to them. But I will say that is one of those insights, there are some measurable differences, not absolute binary differences, or some measurable, in some ways, subtle, yet significant differences from one population to the next. And arguably having someone who has that perspective, may say, I'm not sure how this segment of our customer base will respond to that, maybe want to change it a little bit.
Felicia Shakiba 20:04
And ultimately increasing the bottom line.
Dr. Greg Pennington 20:07
Ultimately increasing the bottom line. And as an enabler, the bottom line, yours is a trusted brand. Yours is one that actually listens to customers, right? That keeps us in the mix.
Felicia Shakiba 20:19
Knowing that this research and as you shared your experiences, how can we take these instances or initiatives that we're doing with DEI and how can organizations effectively measure the impact and success of their DEI programs beyond the mere participation numbers or surface level indicators?
Dr. Greg Pennington 20:41
If an organization was talking about what's the return, we got on automating certain plants, they've spent a lot of data looking at that and measuring it relative to DEI, less. Now certainly there's some traditional measurements who are terms of increases in hiring and retention and engagement. You know, I don't know if we've done as much research on the ascension of categories of differences in organizations, but that will be one piece of, you know, continued measurements. The whole measurement applies, of course, starts with what's the intended goal. So we go back to what's the business case, that should be a real straight pull through, you know, did will achieve what we set out to achieve? If we put it in the engagement, hiring, retention, we measure those things. If we put it into the values case and the image case, we probably get some measurements from the external customer base of that organization. So I think those are some really important pieces of it. You know sometimes a richness of exit interviews- exit interviews, in this population of diversity, I think, is an underutilized research or measurement. Why do people leave? We find that people leave for these reasons. Now I can hear, as I say, at HR and legal saying, you know, what if we find out these things? But that's part of the riskiness of doing it, but that pull through are what are my objectives, what are the measurements that go along with it? I think if we somehow or another, got a little bit more risk taking from legal and HR, then we probably would ask even more questions and slice data, even more. But we said engagement is which is a really valid measurement, are we taking time to say, how are people responding in these different demographic categories? Because that data tells us something, and unfortunately, may tell us some things that we're not doing well, which has some costs related to it.
Dr. Greg Pennington 22:39
In an ideal world, and hopefully not idealistic one, those measurements give us some indicators about where to go. So I worked with a beverage company, they did some research, about perceptions about movement, they took a look at a risk of slice. Now one of the things they uncovered was that, generally speaking, that population thought they were improving the support of women, women's increases in leadership/ Slice it another way, white males and seniors were more aesthetic about that improvement than women were, right? Lump it all together looks like we're making movement, you know, pull it apart, you get this little nuance, certainly at least two different perspectives about perception. We're making some progress. Women still saying yeah, but it's still taking a lot of effort for us to do that. Now it have some data, we can use to move forward on it. I do think that's part of it.
Dr. Greg Pennington 23:32
There's a piece, you know, in the general organization development and psychology arena, from a research standpoint, that talks about qualitative research. And I think there's a great opportunity for that, even in operations. Qualitative in the sense that you put a face to the facts, you can get some different kind of movement. Now there's a snippet of a concrete example, organization, big manufacturing, global organization. They track diversity statistics over five years- saw this incremental increase sort of that range of, we're making some progress, not of phenomenal leaps and bounds, but steady progress. So it's a little bit of a there's no fire for us to do much different. I sat in on a conversation when they talked about- we still got a single digit improvement better than where we were five years ago. And then this CEO asks about, Well who is leaving? Who not numbers, but persons. So the conversation, Felicia was so much more visceral to say that, you know, among the people that left, Joe left, or Susan left. Then someone said, What!? Do you mean that person? I thought they were doing whatever... so that, that visceral data, qualitative base, put on with the facts, has a different impact on organizations, and additive impact on organizations, in addition to the factual stuff that's going through.
Felicia Shakiba 24:58
And Greg, you've been doing this for so long, what example or a case study of organizations that have successfully transformed their culture through effective DEI strategies? What example could you share that highlights the key factors that contributed to their success?
Dr. Greg Pennington 25:15
I do think and I'm going back to this global manufacturing organization, that part of their measurement was to define diversity and what people talking now about the SEG, the sustainability, the environment, and the governance, and there's a huge piece of theirs was around minority suppliers, right. So if you pull out what they did around minority suppliers, the dollars that they spent, they were members of, some significant round table. So these are major organizations that direct this significant amount of dollars to small businesses, right. Now, the thing that I think stands out from them at the time was that that push about minority suppliers was a demonstration that we want to engage with other organizations as source. This was interesting in that it had this really well thought out development piece. We've taken on barely evolving smaller companies. But that larger global manufacturing dedicated some resources to them in terms of how to build a business. And so it wasn't just hand some dollars, so it can still be in the right category from terms of federal, you know, oversight. And it wasn't just we can buy some source supplies stuff from this organization, we want to build up that organization, quality wise, which is a win win for both of them. So I would say that is an example where that organization, they had some other pieces in terms of where that Chief Diversity Officer sit, part of the senior executive group, if size enough to really have that type of impact. But that, to me is one of those real specific processes and on offerings, that starts in the DEI arena, but gets a little bit more, you know, elaborate in terms of how it's played out.
Dr. Greg Pennington 27:04
I would also say, as a best case, with someone that I think and this person is the retiring CEO now of a professional services organization, that person of color, middle European heritage lower income level raised by grandparents, because of just circumstances, all of which is to say that they didn't fit the predecessors protocol of being more quote unquote, privileged in their upbringing. So that person that CEO use their personal experience, as a way as I said earlier, driving the commitment they had and the experiences they had about being different. That person would also say, when we talk about selection, our firm used to go to just these two or three places. Now we go to multiple places because there we'll get more choices. That firm used to take an extended view about people being matured over time to be valuable, you know, made it more specific and more of an expectation as senior consultants, took in junior consultants, they didn't say take in minority consultants, but take Junior consultants make sure that they are capable of adding value to your client as well.
Dr. Greg Pennington 28:21
And then the third thing I will say is that CEO recognized that they were coming behind a couple of traditional CEOs. And that CEO I'm referring to will tell you here are three or four specific challenging moments I had, I knew going into with the board. I knew talking to my previous CEO, I knew talking to a customer, that notion, that experience of I took on some personal risk, to demonstrate my commitment, and demonstrate how I'm going to make this organization different. So that's another one that comes to mind with me, which is, again, all around you and I start off talking about what's the power of that position, regardless of the demographic characteristics about that senior leader, they're sitting in a space where logic, don't throw it aside business case, don't throw it aside, but there's some signature that that senior leaders put on this that has to be exercised in a responsible and impactful way.
Felicia Shakiba 29:20
Greg, this has been amazing. Thank you so much for being here.
Dr. Greg Pennington 29:24
Well, it was a pleasure. I always enjoy talking with you. And you know, it's it's always awfully for me these things are two way streets. Hopefully, I'm giving something and hopefully I'm getting something and I really do genuinely appreciate just by asking questions. It makes me think it makes me you know, say how do you put that in a way that I can offer it to others, but in the process of doing that I just want to say to you and anybody listening- I have to learn validate it for myself as I'm saying it out loud. So thank you for asking me to join you.
Felicia Shakiba 29:56
That's Dr. Greg Pennington, Managing partner of the pinpoint consulting, former VP of HR and senior leadership development for Johnson Controls and Harvard alumni.
Felicia Shakiba 30:15
If you liked today’s episode, we have more podcasts on innovative HR strategies, talent management, organizational culture, and more, and how to navigate the complexities of modern-day HR. Find them, at CPO PLAYBOOK dot com slash podcasts or search CPO PLAYBOOK on Apple Podcasts, Spotify, or wherever you listen. Thanks for listening to the CPO PLAYBOOK podcast - we’ll be back with a new episode next time. I’m Felicia Shakiba.
Felicia Shakiba 30:49
If you love CPO PLAYBOOK, the best thing you can do to support us is to become a subscriber. You can do that at CPO PLAYBOOK dot com slash subscribe to podcast. That’s CPO PLAYBOOK dot com slash subscribe to podcast. If there’s an episode you loved, please share it with a friend. And if you have an idea you would like us to talk about or a guest you’d like to nominate, visit CPO PLAYBOOK dot come slash contact us to suggest an idea.