DIVERSITY AND INCLUSION OVER TIME
Diversity and inclusion (D&I) is now a globally accepted business imperative. This was certainly not always the case, and over the past half century, there has been an interesting evolution in the philosophy and practice of D&I in corporations globally, including those in the health care, medical, biotechnology, and pharmaceutical industries. We label the steps D&I 1.0, 2.0, 3.0, and 4.0. Several key developments served as the foundation for the modern diversity movement; these include the women’s suffrage movement in the late 19th and early 20th centuries, the Universal Declaration of Human Rights of 1948, and the US Civil Rights Movement in the 1960s. During the 1970s and 1980s, there was D&I 1.0 (“diversity and representation”) where corporations placed emphasis on having a certain number of women and minorities. During the 1990s, there was D&I 2.0 (“diversity plus”) encapsulating additional diversity categories besides gender and race (eg, disability, religion, sexual orientation, veteran status). During the 2000s, many corporations practiced D&I 3.0 (“diversity and inclusion”) to go further in making the effort to make diverse employees feel truly welcomed and included. Finally, during the 2010s, corporations shifted to D&I 4.0 (“diversity, inclusion, and engagement”), where the organization seeks to leverage employee diversity, inclusion, and engagement to enhance business performance, particularly on key metrics (eg, innovation, revenues, costs, and profits).
Diversity and inclusion is now widely accepted as conducive to corporate competitive advantage. For example, as more and more health care companies sought federal dollars, the promulgation of guidelines requiring that employers holding government contracts comply with laws and regulations on nondiscrimination (eg, Office of Federal Contract Compliance Programs) helps shift diversity into a position of strategic importance rather than simply a check-the-box compliance mandate. There is recognition that diversity is broadly and fundamentally essential for most institutional, organizational, and societal systems. The advantages include improved financial performance, increased internal innovation, greater access to talented potential employees, enhanced brand and reputation, and expanded market access and understanding, including competing globally. In addition, from an ethical and impartial standpoint, being diverse and inclusive and engaging employees at various health care organizations seem to fit the descriptor of “doing well by doing good.”
Diversity and inclusion 5.0 and gender parity are the next steps in the natural progression of the D&I movement. Gender parity in the corporate context means that there are equitable and equivalent opportunities for male and female employees in terms of recruitment, selection, training, advancement, and retention. Equity and parity are the ultimate drivers of equality, although the temporal lag can be significant. Although diversity plays out in many different ways (eg, ethnicity, national origin, race, religion) across the world, we believe that elevating women into more leadership and operational positions should be a common global priority. Why? Because women constitute more than 50% of the world’s population and their economic purchasing power is growing globally.1 In health care, women make 80% of the purchasing decisions.2 In addition, 58% of the graduates with health care–relevant degrees are women,3 and women constitute 80% of US health care workers.4 Thus, gender parity should be a natural corporate priority, particularly in health care organizations.
Instead of parity of outcomes per se, we reference parity in opportunities, experience, and treatment. That is a state of equity and equivalence for men and women in health care organizations. The bedrock for this is an inclusive environment in which both men and women in the workforce are respected, valued, and fully empowered to contribute. If done consistently and rigorously at all levels of an organization, parity of outcomes will naturally follow without a forced quota system. Targets can be helpful in reaching an organization’s parity goals, and they differ from traditional quotas. Targets are internally tailored objectives reflecting the organization’s overall business strategies and carefully consider what degrees of progress in diversity are achievable within a specific period; in contrast, quotas tend to be more explicitly driven by external pressures, with levels, metrics, and time frames less specific to the individual organization’s culture, strategy, and operations.
As noted, we see the following key drivers of gender parity: recruitment, selection, training, advancement, and retention.5 There are several crucial success factors underpinning progress against these drivers: people (eg, members of a selection committee are gender representative), philosophies (eg, culture and ethos of wanting every employee to maximize his or her potential), plans (eg, formal business strategy developed for achieving specific hiring pipeline targets regarding gender), policies (eg, clear and strong guidelines for handling cases of gender discrimination), and programs (eg, strong mentor and sponsorship initiatives).
TEN BEST PRACTICES
What additional actions could concretely enable a health care organization to best implement gender parity? On the basis of our experience, we find that there are 10 specific best practices that health care organizations can adopt to increase gender diversity. Most of these best practices are also applicable to non–health care entities and to nonglobal health care organizations, but for purposes of this article, we focus on global health care organizations.
Make D&I an essential element of global strategy
The health care industry is inherently global in terms of medical tourism, physician recruitment, research and development, clinical trials, manufacturing, marketing, and sales, and in turn, global companies are inherently diverse because, by definition, they include executives, managers, and line employees from different countries and diverse cultures. For example, when a US-based life science company sets up an office in Japan or when a Japanese headquartered company sets up an office in the United States, a multicultural organizational environment is created that requires building trust and integrating perspectives. Thus, global health care companies necessarily need to focus on D&I as an essential element of global strategy and an inherent part of doing business effectively internationally.
Some form of diversity is found among all nations. The United States can be considered an immigrant nation high on the multicultural, multiethnic scale, but even relatively racially homogenous countries such as Germany and Japan have differences involving age, disability, gender, sexual orientation, and socioeconomic status. An organization should strive to continually learn, document, and apply what it means to be effective with D&I in the global context. In many ways, diversity reflects a naturally occurring combination of increasing business globalization (ie, more transactions spanning multiple countries) and increasing within-country diversity (eg, projections that the United States will become a majority–minority nation within two generations). To fully capitalize on this notion, the organization needs to address the underutilization of human potential by actively promoting inclusion. This includes leaving no unrealized value by encouraging participation from everyone while addressing unconscious biases and valuing differences. If organizations fail to address unconscious bias, it becomes exceedingly difficult to systemically incorporate D&I as an essential element of global strategy.
Because gender differences are ubiquitous, excellence in creating parity for women in recruitment, selection, retention, training, and promotion should be of the highest priority and a core competency. Another key reason to focus first on gender is that, relative to other diversity categories, there are typically more women at more levels in the company to work with. Thus, almost every team will have the opportunity to engage female employees globally, so the organization can accelerate its building of D&I DNA. This then positions leaders to address diverse cohorts who are not yet represented in every team in the company and where the cultural or social distances and unfamiliarity are greater. Although gender issues vary tremendously around the world, organizations should have a global focus on women that seeks to build greater connectivity and understanding in all the countries and regions in which they operate. This focus is also applicable at the patient level, given the number of women making health care decisions for their families, and it should extend to suppliers as a value reflected in the supply chain.
Tailor global D&I initiatives to fit local needs
Approaches to D&I should themselves be characterized by a diverse and inclusive application, particularly in global health care companies. Thus, D&I should be implemented adaptively on a country-by-country or even region-by-region basis because what works superbly for one location may be considerably less than optimal for another location. This flexibility allows for locally driven adaptation based on each area’s cultural norms, demographic composition, business needs, and so forth. Indeed, it would be ironic for D&I to be applied in a doctrinaire manner where local cultural and demographic differences are ignored or minimized. Of course, there are certain foundational, “nonnegotiable” principles of D&I (eg, mutual respect for differences) and legal requirements (eg, no discrimination based on gender) that tend to transcend particular regions, but many other dimensions can and should be modified to fit particular circumstances.
Embed D&I throughout the organization
For organizations to achieve D&I excellence, they must embed diversity and inclusiveness into their DNA by making it an essential component of the core work practices and metrics of the organization. Mindfulness of D&I should be a valuable trait that everyone in the organization possesses. Rigorously integrating a multicultural environment is essential to being successful in building trust across the organization. There are a limited number of leaders in a company who can make decisions impacting diversity, but everyone should be held accountable for making personal and professional decisions that contribute to inclusion—even if today, some employees are not sufficiently skilled to do it intentionally well. To paraphrase Deming, what gets metrics gets measured and what gets measured can then be managed.6 As a core element of embedding, leaders within the organization should be provided with metrics to gauge the impact of their individual and the organization’s collective actions to drive D&I along with other important performance imperatives. Key metrics include the following:
- Evaluate return on investment on key D&I initiatives
- Examine key D&I benchmarks (eg, How are we doing relative to competitors?) and trend lines (eg, How are we doing relative to our previous performance?)
- Assess D&I in terms of employee life cycle
- Collect systematic feedback from employee resource groups (ERGs) using surveys and other instruments
- Measure rate of change in diversity composition of senior leaders
- Measure turnover rates of diverse team members
- Assess whether there are statistically significant engagement disparities or differences in willingness to refer the organization as a place to work
- Conduct systematic exit interviews with departing underrepresented employees
The D&I evaluation should include multiple metrics and data points to increase validity and reliability. Capturing both quantitative and qualitative data is essential; the former allows statistical analyses, and the latter facilitates contextualization and gathering nuances. Dashboards and scorecards are excellent ways to concisely present metrics to senior management.7
Related to metrics, business processes should be enhanced to include a diversity component. For example, one large health care organization implemented mandatory changes to the recruitment process, which required a certain number of women as candidates or else the executive team had to sign off as to why this was not possible. Metrics and measurements can readily be attached to these kinds of process improvements to rigorously assess their effectiveness. As part of this, it is important to have leading indicator metrics that hold business unit (BU) leaders accountable. For example, the organization can track the percentage of women getting supervisory line positions, working as brand or product launch leaders, or being rated as high potential, including whether that decreases as women advance. Using a business dashboard, metrics can be coded (eg, green/yellow/red) according to the level of investment and support BU leaders are making in the programs (eg, the percentage of employees actively involved in an ERG). With respect to business processes, there can be diversity targets directly connected to business performance. For example, if a product is geared toward women, there can be goals regarding the percentage of women on the market research or brand team, the percentage of female district sales managers, or how many female physicians are targeted for outreach.
Viewing D&I as an essential element of the strategy for global growth will facilitate building the appropriate D&I infrastructure and integrating the practices into every function, and the board of directors should be included as one of those key functions. It is crucial for women to be represented at the board level too because this correlates with more women taking senior roles in the organization, particularly the CEO role, and with better pay equity—in addition to enhancing business performance. It helps open the glass ceiling. From the boardroom to the copy room, as D&I becomes embedded normatively, it will then become integral to how the organization does business, which is an important step toward Gender Diversity 5.0.
Multiply D&I impact via external partnerships
An organization should not go it alone when it comes to D&I. This is true even for large, global corporations with relatively deep pools of resources. Whatever the size of the organization, its global footprint, or the depth (or shallowness) of its resources, any investment in D&I can be made more impactful by forming external partnerships, which serve as a multiplier on impact—both externally and internally.
There are several big buckets of particularly important external partners for advancing D&I: (1) nongovernmental organizations, (2) suppliers, (3) business partners, (4) corporate socially responsible (CSR) investors, and (5) government. With nongovernmental organizations, for example, organizations such as the Healthcare Businesswomen’s Association whose core mission is to advance diversity (gender in the case of HBA) can serve as robust facilitators and partners on events, programming, professional development, and thoughtful leadership. With suppliers, for example, a diverse sourcing program can be used to mobilize all suppliers in a collaborative effort to support economic advancement locally and globally for women- and minority-owned businesses. The company can create direct opportunities for diverse owned businesses to be competitive in bidding on supplier contracts, and the company can encourage its non–diverse owned vendors to do the same with their suppliers to create a ripple effect.
With business partners (eg, top customers), being able to share best practices and collaborate on projects related to gender parity helps build trust and enhance partner relationships, which has a feedback loop to business opportunities. Perhaps most importantly, because no one has a monopoly on getting D&I right, customers and partners are coping with the same issues, so working together with them on D&I can increase effectiveness. With CSR investors, they are a source of ideas and can be instrumental in making the link between D&I outcomes, capital allocations, and stock performance. Of course, by definition, CSR investors can be a source of capital. For example, many large institutional investors, such as pension funds, dedicate a portion of their budget to environmental, social, and governance investments, which presents opportunities for biopharmaceutical companies to garner additional funding based on D&I initiatives.
Many public sector entities in the United States and globally emphasize D&I, so being perceived as strong on D&I can facilitate government relationships that help the company more generally with policy makers and regulators. For example, regarding clinical trials, policy makers around the world increasingly want to see data of specific populations (eg, women) and patient population outcomes. Having a great therapeutic drug is only part of the equation; access and adherence are equally important. If a government wants to see gender demographic representation in clinical trials because of concerns regarding health disparities between men and women, culturally competent marketing will be required to recruit the proper mix of male/female participants. To take another example, a biopharmaceutical organization can arrange a briefing to illuminate policy maker understanding on the demography of a therapeutic area that may be affecting a disproportionate number of constituents (eg, lupus). It can also be helpful in equipping policy makers (and payers) with data on patient population outcomes, particularly with underserved patient populations.
Other potentially helpful external partners include patients, academics, community leaders, media outlets, and other companies (potentially including competitors). These partner entities can be leveraged to expand the reach of any D&I efforts and maximize impact in the marketplace. In this way, D&I is viewed as critical to many constituencies and stakeholders, not only to employees. External partners are also essential if the goal is for D&I to stimulate economic progress in any of the diverse communities the company operates in and serves. As an additional benefit, an enhanced D&I reputation with customers and external decision-makers can increase market access, thereby serving as a differentiator in the marketplace and a source of competitive advantage.
Maximize the role of ERGs
Many organizations now have ERGs, which are also known as affinity groups or business resource groups.8 These networks range from highly informal to more structured and codified, depending on the organization and the mix of employees. Typically, employee-led (rather than management-led) ERGs were created to promote a welcoming environment for underrepresented groups (eg, women, minorities, veterans), and this remains an essential purpose.8 They create a forum for employees to be comfortable networking with other employees who share a similar background, and ERGs promote collaborative learning. These groups can have a positive human resources (HR) impact by increasing employee engagement and retention.
Another critical role of these resource groups is as an accelerator of leadership development, giving members the opportunity to take leadership roles in the governance, strategy, and initiatives of the ERG itself. This is particularly true if the ERG’s initiatives are aligned with the overall enterprise business objectives. The most successful ERGs chose chapter and initiative leaders in conjunction with HR talent pipelines, which causes top executives to see the ERGs as a “leadership” opportunity and want their highest potential talent to be involved.
Employee resource groups have a track record of providing safe harbors in which diverse employees can build confidence, share information, make company-wide connections, and gain mentorship/sponsorship.9 Far from promoting isolation, the best ERGs increase assimilation into the broader organization. Employee resource groups can be beneficial to an organization by helping employees build their knowledge and skills to become more productive employees. Employee resource groups give the organization greater and earlier visibility to high-potential talent, and they increase feelings of engagement and loyalty to the company, which ultimately translates into higher retention rates and lower replacement costs. They can also help with recruitment, as their existence typically signals that the organization is an employer of choice for talented, diverse, prospective hires. If executed properly, ERGs can be a substantial area of strength for a company.
In addition, given today’s business environment, there are opportunities to take ERGs to the next level by using them to more directly have a positive impact internally on costs, revenue, and profits while focusing externally on the community and the broader society. For example, ERGs can help the business reach more patients, providers, and other potential stakeholders who are diverse while increasing the overall efficacy of marketing and sales efforts into diverse communities (eg, a women’s ERG helping the company optimize marketing and sales to female audiences). To take another example, when expanding globally, the locally born and based employees, who are often culturally diverse from most existing employees, are one the best sources of geographically specific market intelligence and customer insights. Diversity and inclusion can be a powerful device for lead generation because the diverse demographic portfolio of those inside the company creates multiple natural entry points into—and business development opportunities with—outside networks. In addition, ERGs can also have an impact externally; in particular, they can help build bridges to the communities that companies serve by increasing engagement and trust. For example, if an organization has a disabilities employee resource network, the ERG members can help create research programs and clinical trial strategies, including community outreach, for indications involving significant mental or physical impairment (eg, Alzheimer, Down syndrome).
Employee resource groups that give back to the business have a more stable financial, political, and strategic position within the organization. In addition, one successful ERG with a particular demographic focus can beget additional ERGs focusing on other categories of diversity within the company. If the ERGs are working on contributing to enterprise business and talent strategies, it is less difficult to navigate the politics of getting them properly funded by allocating a percentage of the budget already approved for a particular purpose (eg, business development, community engagement, CSR, market research). One of the gravest vulnerabilities to a successful ERG strategy is whether they are underfunded relative to the impact the organization seeks. If led well by employees and supported properly by management, ERGs can be a robust corporate asset.
Maximize the role of diversity councils
Many organizations have diversity councils (DCs), which are also known as diversity committees or D&I cross-functional teams. In contrast to ERGs, DCs are typically more formally structured and are management led. The council members tend to be senior executives within the company rather than having less senior employees mixed in as one would find with ERGs.10 Diversity councils often have responsibility for driving D&I progress throughout the organization, both locally and globally. To accomplish this, the council usually has a rich demographic, functional, and geographic cross-section of team members. The DC helps to create a strong global framework for D&I, while simultaneously providing robust support for locally relevant D&I initiatives.11
Diversity councils can play a significant role in making sure D&I information, knowledge, and wisdom are shared across the organization, diffusing into all departments and filtering into all functional roles. This is particularly true with global corporations where the depth and breadth of cultural differences—and therefore the cross-organizational learning potential—can be significant. For example, the national government in one country where a particular organization operates may have legal mandates and regulatory benchmarks for hiring people with disabilities. In response, the executive leading that region may develop a strong programmatic approach that allows the organization to effectively respond to these governmental requirements. This stimulus-response process will naturally generate significant country-level learning. However, these information, knowledge, and wisdom could be lost if not properly harvested, organized, and shared. The organization’s DC can and should play a primary role in capturing and disseminating this learning, which can assist the entire global organization in meeting the challenge of hiring, retaining, and meaningfully empowering people with disabilities.
To take another example, the federal government in one country where the organization operates may be taking very progressive steps to encourage corporations to accelerate the progress of women into senior leadership positions. This creates another learning opportunity to share best practices globally. Although there are elements of D&I that are locally situated and culturally specific, many global and regional conditions and requirements are sufficiently similar that certain takeaways from one location do translate to other locations.
Although the global health care industry is among the most dynamic, there is often significant inertia, which is not unusual for a large, powerful, complex sector. By being highly intentional in introducing new thinking, DCs help shift mindsets. This can have an immediate impact upon hiring with the development of incentives and norms that encourage the development of a robust pipeline of leaders who are women and minorities. The effectiveness of the DCs is greatly enhanced if they have clear accountability to the C-suite of the organization. As part of accountability and visibility, it helps to have a DC scorecard connecting enterprise goals with local goals, targets and reporting progress on (eg, red/yellow/green); these scorecards can be compared with each other for all the BUs and regions that have DCs. That way, at the enterprise level, the organization can see where the “hot spots” and “sweet spots” are, and the global officer of diversity and management committee can make better decisions.
It is important for DCs to have strong connectivity to ERGs to receive real-time information from the “front lines” and so that learnings across the organization can be disseminated and adopted more efficiently. Trust and openness are critical to this exchange as the success of a DC is not guaranteed. From an organizational effectiveness standpoint, DCs may work optimally when they act as an internal advisory board, helping advise, co-create, evaluate, and guide the D&I strategy.
Just as with ERGs, the presence of a strong DC can help brand the organization as an employer of choice for those who value D&I, which helps with recruiting talent that is diverse and highly skilled. Diversity council–induced new thinking also must extend to the equally challenging issue of focusing on training and retention to make sure diverse talent remains with the organization. One helpful step is creating cross-functional experiences that help prepare relatively new employees for eventual leadership roles and having a greater voice in the enterprise. Diversity councils can help ensure that every employee has a voice that is heard and encourages greater engagement by all members of the organization. By this and other means, DCs help identify the best people and bring the best ideas to the table.
Leverage D&I for innovation and new thinking
Diversity and inclusion should be leveraged as a source of innovation and information. It is a robust tool for bringing a broad range of the most outside-the-box ideas and solutions to address the biggest challenges and opportunities in health care.12 Bringing the best medicines and devices to patients and providers requires the best thinking. It requires creativity and seeking out different ideas, whether in the laboratory, in the clinical setting, in office, or in the boardroom. An inclusive culture can help move thinking beyond the status quo, promote cross-pollination of ideas, and generate insights that otherwise might never surface. An organization should commit to recognizing differences and then leveraging those differences to create competitive advantage and a sustainable future. For example, the organization could create an internal think tank, composed of a cross-section of employees, which is specifically tasked with thinking about specific business opportunities and providing insights related to D&I. This group can provide the HR department with ideas on recruitment/retention, the marketing and sales department with ideas on customer outreach, and the office of the CEO with strategic insights related to D&I that can drive performance.
Another idea involves the following steps: (1) task each BU to specifically put on a gender lens, (2) create a safe space for women to share their real-world insights, and (3) put teams in role-playing scenarios as health care decision-makers or practitioners. This would require team leaders to make sure they have women on the team, and each BU would need to have their targeted initiative or innovative idea. Each ERG could be tasked with creating some key questions for their cohort that would be appropriate for each stage of the value chain. This would include the HR teams around the people model, looking for the unconscious bias that is currently implicitly embedded into the system. When it comes to innovation, ideas need to be fully grounded in a variety of details that require deep emersion in the business—whether it is clinical development, manufacturing, market research, or product launch. This BU-centric framework can be an excellent way to generate innovative ideas via deep thinking.
Leverage D&I for business development
As noted, D&I can help the organization by contributing marketing and sales insights from specific customer vantage points. It may require a long-term change initiative, but the employee composition, including the senior leadership team, of a global health care company should ideally mirror the communities where it does business and reflect the customer base.13 This is important because, more than ever, health care organizations interact directly with patients as the customer. Gender is a diversity characteristic that all countries share, and women have growing economic power. Thus, gender is a particularly robust diversity criterion to leverage on the demand side. Female executives, managers, and other employees within the company can be tapped to help understand how to optimally market and sell products and services to women outside the company, whether that is patients, providers, or other key entities.
To be maximally effective and impactful, the global D&I agenda should be one of the top priorities of the CEO.10 Ideally, the office of D&I should report directly into or be part of the C-suite. The CEO should be in some way personally connected to and actively engaged in diversity initiatives that drive global strategy and operations. Of course, CEOs have many competing, meritorious demands on their time, so there will still need to be significant delegation. However, the stronger the C-suite’s engagement in driving gender parity, the higher the probability that all members of the organization will comply. With enough time and consistency, the top executive team can then transform support for D&I from a top-down mandate to a widely held, taken-for-granted norm organically shared across the organization. One effective step a CEO could take is to introduce the concept of incentivizing executives with gender parity being part of their objectives and having financial incentives tied to their performance. Coupling normative change with financial incentives can prove to be a powerful combination for a CEO seeking to instantiate enduring gender parity. The board of directors can also play a crucial role in this. Many of the best companies have board involvement in tying diversity goals to the compensation of senior executives, particularly the CEO. The overall thrust of these changes is to increase accountability and responsibility throughout the organization, from the boardroom to the mailroom.
Sharing of D&I best practices is a meta best practice
Perhaps, the most important best practice for Gender Diversity 5.0 is that best practices should be recognized, documented, and shared. This is what we call a meta practice—a best practice that provides overall guidance regarding all other best practices. Thus, within the categories of people, philosophies, plans, policies, and programs regarding D&I, there should be documentation of what does and does not work well. The organization’s chief D&I officer or its DC would be the best keepers of this information. It is valuable when the learning can be shared informally (ie, water cooler talk), but foundational progress is maximized when insights are codified in the organization’s learning management system.
Although certainly not unanimous, there is widespread acceptance that D&I is ethically right and culturally beneficial for global corporations, including health care organizations. In addition, the growing body of documentation and acceptance regarding the tangible business benefits (eg, increased share price, higher profits, decreased costs, increased revenue, lower employee turnover, higher employee satisfaction) of diversity, inclusion, and engagement—particularly in terms of gender—should move companies to further embed D&I in their fabric to optimize business performance. We see the 10 best practices delineated in this article as the best way to ensure that gender D&I continues forward movement. The end point we are seeking is clear: an environment in which all health care organizations are characterized by parity (ie, equity and equivalence) in opportunities and treatment for men and women. Not only will this be beneficial for the organization and for its employees (both male and female), but perhaps most importantly, this end point will ultimately be good for the patients and customers served by the industry’s life-improving and lifesaving products and services.