Economic uncertainty, talent retention and political polarization are top- of-mind for business leaders. It seems the only thing certain about business is uncertainty. Today’s leaders have to prepare for the best, worst and in-between scenarios.
In a recent study, CEOs cited workforce development, business strategy and HR financial impact as top concerns. Patrick Wright, department chair and Thomas C. Vandiver, bicentennial chair at the USC Darla Moore School of Business, conducts a survey of Fortune 500 CHROs every year, interviews CEOs about the challenges they face, and shares his findings in the report Executive Succession. In an interview with me, Patrick shared some of these findings, chief among them:
- Developing strategic workforce plans topped the list of CEO challenges, with 41% indicating this process needs improvement and 7% indicating it needs vast improvement.
- Influencing the development of business strategy was a priority, with 24% stating it needs improvement and 3% saying it needs vast improvement.
- Understanding the financial impact of HR processes was listed, with 22% noting it needs improvement and 2% asserting needs vast improvement.
For executives wanting to better develop their workforces, business strategies and HR processes, consider these approaches:
- Inclusive succession planning
- Diversity, equity and inclusion (DEI) strategic planning
- Inclusion assessments
Inclusive Succession Planning
Succession planning processes have not changed as significantly as the workforce has over the last few decades. With increased diversity in the workforce, it is important that leaders pivot succession-planning processes to ensure they’re truly inclusive. Often, decision makers are made up of the dominant group (i.e., white men). The challenge with that is humans tend to have affinity biases and support people who they perceive to be like them (a.k.a., other white men). With more diversity due to younger employees of different races, gender identities, ethnicities and abilities, it’s important that succession planning encompasses the historically marginalized groups more proactively.
To be more inclusive in succession planning, consider sponsorship programs that match protegees from historically marginalized groups with sponsors in positions of power and influence. Provide tools and resources to help sponsors connect with their protegees and understand their career aspirations. Another way to facilitate inclusive succession planning is to ensure historically marginalized folks receive equitable feedback and growth opportunities. Too often, the dominant group is favored due to the potential vs. performance bias with less scrutiny on actual performance and more leniency with regard to the potential to perform.
DEI Strategic Planning
Strategic planning used to be done in three-to-five-year time horizons. Nowadays, with perpetual uncertainty, plans are more likely to be one to two years. One variable that’s often forgotten, which needs to be embedded in business strategy, is diversity. Given the nature of the future workforce and customer makeup, it is critical that organizations proactively identify strategies to increase diversity and representation at all levels of the organization.
To develop a DEI strategic plan, consider these three questions:
- What does DEI mean at our organization?
- Why does DEI matter at our organization?
- What are the key priorities (no more than three) that will demonstrate our commitment to DEI?
The best DEI plans are embedded into existing strategic plans, and they help organizations stay relevant in an increasingly diverse world.
Inclusion Assessments
It can be difficult to calculate the return on investment on human-capital development. Traditional measures have been employee-engagement scores, yet human resources (HR) professionals do much more than employee-engagement work. Performance needs to be assessed beyond employee engagement to consider inclusion. Inclusion is highly correlated with business performance.
There are a variety of assessments available to measure inclusion. My DEI consulting business partners with Qualtrics, which has 27 research-backed questions that can be reported by dimensions of diversity (gender, race, ethnicity, disability, LGBTQ+ and more). When inclusion perceptions are broken down across dimensions of diversity, there are typically stark differences in perceptions of fairness, psychological safety and other factors that drive business performance.
As business leaders navigate the uncertainties of the future, adopting these approaches can contribute to building resilient and inclusive organizations. By focusing on workforce development and strategic planning, as well as fostering a culture of diversity and inclusion, leaders can better position their organizations to thrive in an ever-changing landscape.
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Previously published on FORBES.COM and is republished on Medium.
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On the surface, this shows some interesting issues of concerns to CEOs. However, the findings cited in the University of South Carolina survey actually show that these issues are of minimal concern to CEOs. Less than 50% of CEOs seem concerned with workforce development; less than 30% prioritized business strategy; and the impact of HR processes was of concern to less than 25% of CEOs. As the author notes, focusing on workforce development, strategic planning, and diversity and inclusion, leaders can better position their organizations to thrive in an ever-changing landscape. The trick is getting those leaders to recognize the… Read more »