Businesses today measure almost everything with software. “Key performance indicators” or KPIs, such as the number of calls, meetings, leads and closings per month, provide the cornerstone for sales teams. Meanwhile, our marketing teams keep track of every email opened and create first click-to-last attribution models. The finance and human resources departments operate in a similar fashion.
Individually, we use technology to optimize our sleep, our steps and the sips of water we take each day. So why don’t we use software to measure progress towards intersectional gender equity?
When we achieve intersectional gender equity, it means we will have closed all the gender, race, and ethnicity gaps that prevent people from fully participating in the economy. These gaps include the pay gap as well as gaps in promotion, performance appraisal and access to opportunities. It is about leveling the rules of the game so that everyone – regardless of their gender or skin color – has the chance to achieve their ambitions.
There is software to close the intersectional gender gap. It’s powerful, it’s effective, and it’s the solution our well-meaning Diversity, Equity and Inclusion (DCI) efforts have been waiting for.
We need new solutions to move the needle
By July 2020,Fortune100 companies had signed upover $ 2 billionin new spending for racial justice causes. And before 2020, companies were spending8 billion dollarsannually on implicit bias training, althougha growing body of evidenceshows that such training is generally ineffective and reinforces harmful stereotypes. Many companies are now committing to change the percentages of representation within their ranks and even to link manager compensation to diversity measures. All of these solutions lack one thing: intersectionality. We cannot treat gender equity and racial equity as two separate pillars of FDI. Here’s why.
Anyone who represents two or more classes becomes a blind spot. Pipeline has discovered through its implementations that men are being promoted at a rate 21% higher than women overall. But when we applied the intersectional lens (that is, when we disaggregated the data beyond gender), we found that the promotion gap doubles for black women. It is not just these people who are losing out. Entire organizations are missing out on opportunities to build more inclusive and resilient businesses when they ignore intersectionality.
To some extent, their failure can be forgiven. Collecting, managing and analyzing intersectional data about every employee, at every stage of the talent lifecycle, at every level of the ladder and across an organization is no small task. However, the window of forgiveness, if it is not yet closed, will close soon. Between COVID-19 accelerating digital adoption and last year’s renewed calls for racial justice, companies that fail to take action to close their intersectional gender gaps will be left behind.
The fourth industrial revolution
Since the birth of workforce diversity industry Three decades ago, American companies invested billions of dollars in ineffective but well-intentioned DEI solutions. For most companies, the pursuit of a fairer workplace is like chasing a moving target. Will a new employee resource group, better women’s leadership conference, diversity manager, or larger donation to charity do the trick? It’s no wonder that nine out of ten companies in November study by consulting firm McKinsey & Co. said they face challenges in executing their DCI strategy, although DCI remains a top priority for them.
It’s time we turned to what the markets prefer: efficiency. What is the most efficient (and effective) way to achieve our DCI goals while taking into account intersectionality? Technology – artificial intelligence, in particular. With artificial intelligence, we canWired Intersectional Gender Equityin the future of work. Welcome to the fourth industrial revolution.
PipelineThe company’s customers see an average 65% increase in their intersectional progress on gender equity within the first three months of using the platform. This improvement, a clear victory for DCI, also translates into real dollars for organizations. Our original research – conducted among 4,161 companies in 29 countries and collecting over a billion data points – found that for every 10% increase in intersectional gender equity, measured by measures such as representation at all levels of an organization and controlled resources, there is a 1% to 2% increase in revenues. In addition, during an economic downturn, companies that integrate equity into their crisis management strategies may benefit from a 50 percentage point improvement in share price over a two-year period. It is beneficial to prioritize intersectional inclusion.
If fairness matters, measure it correctly
The commitments are excellent. Metrics are better. But without the right measures, DCI’s efforts turn into empty promises. Companies want to “compare” their DEI numbers to other companies in their industry. This desire is well intentioned (they try to control the variability between industries) and poorly thought out. DEI is generally not excellent in most companies. If you compare yourself to your industry peers, what you’re really saying is that you are “less biased” than others in your industry. As business leaders who run some of the most powerful organizations in the country, we need to keep ourselves at a higher standard.
How about starting with real numbers? Women make up 51% of the population, 47% of the workforce and 57% of all college graduates, according to Pew Research. So, shouldn’t our measurements be based on at least 50/50 representation, if not more, to be truly fair? When the number of female CEOs yo-yos year after year, and 7% is a record, we have a problem. How did women go from 57% of college graduates, from 10 points to 47% of the workforce, then from another 40 points to represent 7% of Fortune 500 CEOs? These are the numbers we should be focusing on. Everything else is a showcase.
DCI solutions for the future of work
When 78% of CEOs rank gender equity as a top priority, while only 22% of employees see it regularly shared and measured, according to Women in the workplace, we have a problem. The commitments of CEOs and companies do not match the experience of their employees. Pipeline has confirmed this disconnection. On average, one-third of all performance reviews contain bias, meaning that employees with similar performance receive different ratings because of each reviewer’s bias.
The COVID-19 pandemic only reinforces the disconnect. Almost70%of business leaders agree the pandemic will accelerate progress toward intersectional gender equity in the workplace, according to an Edelman Intelligence study conducted for Catalyst. But at the same time, only 39% of women and 45% of men feel their workplaces are fully engaged in travel.
Let us use the events of the past year as our invitation to turn empty promises into tangible progress using leading measures. For example, companies make three key talent decisions each year: performance, potential, and compensation. The average Fortune Company 500 has 60,000 employees. This represents 180,000 opportunities for every company to advance towards intersectional gender equality every year. For JPMorgan Chase and Starbucks – two companies that tie managerial compensation to diversity goals – the number of opportunities to move toward intersectional gender equity each year runs into the millions, 1.8 million to be exact. Throughout the Fortune 500 is 90 million opportunities.
With the rise of stakeholder capitalism, it’s time to harness the tools of the Fourth Industrial Revolution to make intersectional gender equity a reality, to make stakeholder capitalism a reality, and to catapult our economic recovery. . Better financial results await us on the other side.
Katica Roy is a gender economist and CEO and founder of Pipeline, a SaaS company that harnesses artificial intelligence to identify and generate economic gains through gender equality.
More opinion of Fortune:
- Why the United States needs a national climate investment fund
- Why “Soft robots” NASA, doctors and tech people are so excited
- 20 things that went strangely, wonderfully fair in 2020
- Marketers Can’t Predict What You’ll Buy– Even if they use AI
- Why the PPP always fails for small businesses