Blog Post

Diversity and Inclusion Meets Business Acumen

December 6, 2016
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Core Associate Resource Group Objectives (C.A.R.G.O.) were first introduced in March 2016 to an MBA class at The Ohio State University’s Fisher College of Business. C.A.R.G.O. methodology is based on the premise that, in addition to supporting requests for funding and other resources, the benefits of demonstrating the bottom-line impact of these groups and D&I include:

Enhancing the business acumen of team members so they are positioned to move into other functions. Enabling diversity champions to speak about the benefits of the function, using the voice of the business. Supporting submissions for awards, thereby enhancing reputation. Attracting talent and customers who are seeking companies that “walk the talk.” Increasing employee engagement and reducing turnover.

C.A.R.G.O. Based Metrics Are Born

Diversity and inclusion leaders, including me, have traditionally focused on the level of activity, event popularity, and the level of participation when reporting. Examples include:

  1. Number of members
  2. Meeting attendance and participation
  3. Number of attendees at an event.
  4. Diverse candidate slates
  5. Number of resumes collected
  6. Number of mentoring relationships
  7. Associate Resource Group awareness

These are some of the key activities for success in any D&I structure; however, their relevance may be lost during the business impact portion of a meeting. Let’s examine that.

To illustrate, I will list a set of metrics and then show how they are used to tell the D&I story in C.A.R.G.O. language. While metrics will differ by organization, those used in this example are:

  1. Revenue growth
  2. Expense management
  3. Customer growth
  4. Recruiting, hiring and retention
  5. Employee training and development

We will use a sample set of objectives on which to focus, with our status reported in the table below.

ActivityMetricsC.A.R.G.O Objectives
Traditional reportingThe New Expanded Focus
ERG collected 100 resumes at job fair. 5 candidates were hired to fill jobs.1. Expense management 2. Recruiting, hiring and retentionAssumptions 1. Headhunter charge $100 per referral. 2. Hiring goal is 120 for the year.
20 ERG mentoring relationship meetings were held during the past month, for one hour each.1.Employee training and development 2. Recruiting, hiring and retentionU.S. Bureau of Labor Statistics: 1. Total hourly compensation per employee: $33.58. 2. Quits rate: 2.1%.
ERG supported the Sales team in collecting contact information for 100 attendees at a community festival. 5 of the 100 contacts became new customers.1. Revenue growth 2. Customer growth 3. Expense managementAssumptions 1. Average new customer revenue is $500/year. 2. New customer sales leads cost $50 each. 3. New customer goal for the year is 200.

Telling the story in C.A.R.G.O. Language

The chart shows the ERG had an impact, with the specific “Activity” in Column.1. Now, let’s present the report in C.A.R.G.O. language. This is a more compelling story, using the same information.

  1. We collected 100 resumes at the job fair, a recruiting expense impact of $10,000: (100 X $100).
  2. Five candidates were hired, for an impact of 4% on our annual hiring goal: 100 X (5/120).
  3. The company invested 20 hours, the equivalent of $672 (rounded):(20 x $33.58) of total compensation training and development during the past month through our mentoring initiative. This shows we are leveraging company resources and should also help to mitigate turnover.
  4. We collected 100 sales leads, saving $5,000 in lead generation expenses: (100 x $50).
  5. Our team contributed 5 new sales – 4% of the annual goal for new customers: 100 x (5/120).
  6. Our 5 new customers are projected to generate $2,500 combined in new revenue: (5 x $500).

A quote was shared with me as a young underwriter: “You should inspect for what you expect.”

This means that the best way to position your ARGs for the C.A.R.G.O. conversation is when you fund them. Whether it is at the beginning of the year when annual budgets are developed or prior to funding a specific request, the expected bottom-line impact should be documented.

To assure that you are prepared to report in these terms, please consider the following:

  1. Create financial metrics – not just activity.
  2. Partner with HR, Finance and business leaders to align the metrics to business results.
  3. Make metrics easy to calculate.
  4. Report on a regular basis.
  5. Understand that not all of your activity may lend itself to a metric.

Diversity and Inclusion has come a long way. The key now is for the function to illustrate value, in business terms. C.A.R.G.O. is a key.

Good luck and feel free to contact me to discuss the application of C.A.RG.O. to your organization.

Contact William D. Edmonds, CPCU E-Mail: [email protected] LinkedIn: