Strategy•Aug 11, 2023
DE&I maturity for ERGs and diversity councils part 1: Key success factors and steps
Diversity, equity, and inclusion (DE&I) initiatives and projects exist in many companies across industries to ensure safe and innovative workplaces that work for everyone. For DE&I leaders, this means championing groups, processes, and structures to promote the belonging and support of all employees from various backgrounds and a multitude of intersectionalities.
One of the ways DE&I leaders move these inclusionary goals forward is by starting, nurturing, and sustaining employee resource groups (ERGs) and diversity councils/committees (DCs). In this six-part series, we will explain the importance and impact of these groups and how to align their efforts to make significant business outcomes for your organization. This insight will give an overview of ERGs and DCs and outline six success factors of mature ERGs and DCs.
What are ERGs and DCs?
We define ERGs as voluntary, employee-led groups whose goal is to foster community and inclusion for members who have a shared characteristic, background, or experience. For instance, your company may have ERGs to support communities who identify as women, LGBTQ+, veterans, caregivers, people of color, or a certain age/generation to name a few.
With the help of senior leadership, ERGs tend to rally around a common mission that supports the overall organization’s DE&I strategy. These groups exist to provide support for career development, foster psychological safety in the workplace, and cultivate a sense of belonging for members.
DCs may seem similar to ERGs in mission, but they differ in function, scope, and governance. DCs are management-sponsored groups with influential leaders on the team. They primarily focus on operationalizing DE&I efforts across the entire company (or business unit) that contributes to the overall business strategy. Leaders on DCs work to provide active governance to the rest of the company, energizing employees around DE&I goals and initiatives.
The important note here is that organizations can choose to (and we believe should) have both ERGs and DCs. When organizations successfully implement both ERGs and DCs, their impact and outcomes complement one another while advancing the DE&I and business strategy.
Why ERGs and DCs matter to your people and the organization
DE&I initiatives such as ERGs and DCs intangibly impact the workplace and positively influence business performance. Fostering diversity and inclusion in the workplace improves innovation, which in turn results in increased revenue.
A recent study revealed that companies with above-average diversity scores demonstrated 45% higher innovation revenue compared to 25% for companies with below-average diversity scores. A Gartner study showed through 2022, 75% of companies with diverse workforces will exceed their financial targets. Companies with ERGs and DCs are more likely to attract and retain top talent in today’s competitive climate. Another survey revealed that 83% of millennials are more engaged when they work in an inclusive and diverse workplace.
ERGs and DCs cultivate a diverse and inclusive workplace that encourages engagement with existing employees and attracts new talent to your firm. Overall, an investment in ERGs and DCs will boost your bottom line through increased innovation, talent retention, and talent acquisition.
Warning signs of ERG and DC ineffectiveness
While ERGs and DCs can positively influence an organization, what happens when you have ERGs or DCs that are not effective or are not boosting business results? Even with the known benefits of having ERGs and DCs, we see many clients struggle to have effective groups that truly add business and member value. Creating groups that are sustainable and impactful can be challenging.
Does any of this sound familiar to you:
Your ERGs have low participation, lack structure, are under-funded, often only focused on infrequent programming or cultural celebrations?
Your DCs are lacking structure, misaligned with overall business strategy, duplicating the work of ERGs, missing leadership support, or there is an inability to measure their impact?
The pain points of ineffective ERGs and DCs don’t stop there. At Credera, we worked with a research lab who had ineffective ERGs and DCs. Some of their pain points were related to strategic misalignment, lack of collaboration, miscommunication, and resource constraints, all of which negatively impacted the culture. When they reached out to us for help, they wanted to understand what was causing the issues and what the best next steps and improvements could look like for them.
During our partnership with them, we utilized our Hierarchy of Transformation model and Six Success Factors assessment to not only identify their pain points but also paint a picture of a best-in-class future state vision specifically for their organization. We provided them with a detailed action plan with over 40 opportunity areas to help heal those previously listed pain points and lead them on a path of creating effective and innovative ERGs and DCs.
Keys for successful ERGs and DCs
If you are experiencing these warning signs and pain points, and want effective ERGs and DCs that support your DE&I strategy, business strategy, and provide an inclusive, safe environment for your employees, then we have some potential solutions that have worked for our clients.
While identifying areas of ineffectiveness may prove simple, making progress toward a future state vision can often be disorienting and unclear. To help companies craft a clear path toward ERG and DC transformation, we created Credera’s Hierarchy of Transformation framework paired with our Six Success Factors assessment for a more effective ERG and DC.
Credera’s Hierarchy of Needs framework
Credera’s Hierarchy of Needs framework leverages the structure of Maslow’s Hierarchy of Needs and applies them to the transformation of ERGs and DCs. This framework helps companies assess the current effectiveness of their ERGs and DCs and create an effective roadmap toward the highest level of maturation. This framework allows you to create your path forward by moving to the next level over time, giving space, time, and resources to fully explore and engage in one level before rushing to and expecting the outcomes of the higher levels. Effective ERGs and DCs reach the highest level of maturation by ensuring that each lower-level need is fulfilled prior to advancing up the pyramid.
Credera’s Six Success Factors assessment
Credera’s Six Success Factors assessment is an indicator of a healthy, mature, and well-functioning ERG and DC. The Six Success Factors assessment allows you to evaluate your ERG’s or DC’s maturation within each factor and identify how you can better meet the needs of your groups at each level.
The Six Success Factors assessment also supports fulfilling the needs for each level in the Hierarchy of Needs and match to the first four levels. The highest level in the Hierarchy of Needs is without a success factor, because the highest level is the culmination of all the success factors being met. Explore more about each of the success factors below and in our future insights.
Finding maturity for ERGs and DCs
Maturation for ERGs and DCs is centered around a company’s ability to move up the Pyramid of Transformation. While it may be difficult to envision what it could look like to operate at the higher levels, it likely is easy to identify when your ERG or DCs aren’t effective. Credera has helped organizations explore how to turn those ineffective groups into successful ERGs and DCs. Stay tuned for more information as we explore the first level for successful ERGs and DCs: foundational needs.
Interested in seeing how Credera’s DE&I services can be used to assess your DE&I ecosystem and provide an enablement strategy for driving more equitable and inclusive workplaces? Reach out to one of our DE&I experts at firstname.lastname@example.org for more information.