The Data To Drive Your DEI Efforts

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Diana File: I'm starting to get more concerned because the amount of companies that have come to us and chickened out after wanting to do something or have had their budget slashed or lost people is showing me that people aren't actually listening to the evidence. They're listening to the fear mongering that's going on.

David Rice: Welcome to the People Managing People podcast. We're on a mission to build a better world of work and help you create a happy, healthy, and productive workplace. I'm your host, David Rice.

My guest today is Diana File. She's the CEO and Founder of DF Analytics & Consulting. We're going to be chatting about metrics that HR needs to prioritize, DE efforts in the near and longterm, and a bit more.

So Diana, welcome!

Diana File: Thank you. It's so great to be here.

David Rice: So first, you know, I always like to give everybody a chance to kind of tell us a little bit about themselves, how you got to where you are and what led you to, you know, found DF Analytics & Consulting?

Diana File: Well, thank you. Yeah. So I studied psychology primarily from an organizational and research perspective. Early on in my career I got really interested in data specifically around human behavior and change. And then ended up moving to Israel after college, lived there for 10 years, traveled all over the Middle East, doing kind of peace building dialogue work. And ended up doing a dissertation for my graduate work on kind of the psychological mindsets that influence willingness to reconcile in times of conflict.

And I did it on both sides of the Israeli-Palestinian conflict. It was replicating data from other countries and other international conflicts. And that's when I had to develop my first foray into batteries of psychodiagnostic tests and surveys and things like that. And I really just fell in love with data, measuring and predicting human behavior through data.

And the conflict resolution field in particular, because humans are terrible at managing conflict in general. And so, you know, that's always an area that's ripe for improvement. When I moved back to the US in 2016 and started my consultancy, after having worked in a few corporate environments, managing change and measuring behaviors through change project management and that and change management.

I got really excited in 2020 when a few of my colleagues started to approach me about DEI data and analytics, especially around inclusion and engagement, of course, around diversity. And then kind of melded my two passions for data and for conflict resolution or for DEI more broadly, kind of helping different kinds of people navigate those differences and get along and work productively together inside organizations.

So melding those two passions together became a large focus of the DEI analytics work that did, which then led to more work because the more you analyze data, the more opportunities you uncover to remediate and improve and mitigate risks that you find and the gaps that you find. And so we then started getting involved more in training and implementation and strategy and change management, which comes out of the data and analytics side of things.

So we do four different things. From a practice area perspective, we have obviously the DEI area, the change management area, people and culture more broadly, which encompasses whatever you would consider HR, human capital, managing people and leadership and stuff like that. And then we do a fair amount of work around M&A from a due diligence and project management perspective. Then like I said, spanning everything from kind of the discovery and the data piece to implementation and training.

And I'm very blessed and grateful to still be here doing this stuff that I love.

David Rice: So really interesting path into, you know, people practices and people data from a business perspective. When you were looking at international conflict, did you see a path towards that? Or is that just it just happened?

Diana File: It did just happen, David. It's a great question. I always wanted to help and impact and influence, you know, the pain and the trauma that I saw an international scale in my research. I started to connect the dots between the sort of individually focused psychology work that I had done previously, because I did study childhood development and I took a clinical detour for clinical psych for a while, seeing individual patients and so more of the individual micro level and tying that into the macro level stuff.

So, the research showed, obviously, there was quite a link, which is why bottom up solutions are incredibly important when it comes to piece building, not just top down. And I did this change management project stuff for a while because I, like, I'm not a policy and international relations person. So I wasn't going to go serve in the, for as a diplomat or anything like that.

But I think when 2020 happened, it was really a fortuitous circumstance and created market conditions that were ripe for a pivot.

David Rice: I was going to take advantage of those.

Diana File: It sort of happened. Like people came to me and they asked if I could do it. And I was like, I don't know, but here I am having done it 40 some odd, 50 almost times from a DEI perspective and lots of other times from stuff related to DEI tangentially.

David Rice: Now you're often sort of banging the drum for HR metrics that businesses care about. I'm curious, what are some examples, like where do a lot of HR leaders and departments sort of go wrong around what it is that they're measuring?

Diana File: Oh, this is a great question. I think there's a tendency to measure things that HR cares about for HR efficiency sake.

And I always ask leaders, well, what problem are you looking to solve? What business problem are you trying to solve? Like people will measure, well, how many new hires are we bringing in? Or what's the cost per hire? And it's like, well, are you trying to hire a lot? Why are you having trouble hiring? Like, why would you care about how many hires you're making?

Are you measuring growth in some way? Are you trying to reduce costs there? And so it might be more interesting to measure what happens to those hires after we bring them on. And how successful is that hiring process from an onboarding perspective? You can get feedback from employees and from managers on how quickly they're integrating, because in the absence of that information, it's like, I don't know, I'm hiring a thousand people, I'm hiring two thousand people. What's the turnover rate for those new hires within the first 90 days or the first year? What's the benchmark of how much we want to be hiring? And how does that then translate into revenue per hire, for example?

So we can see how those new hires are actually contributing to, you know, bottom line metrics. A big one we talk about a lot is cost of attrition. For example, people measure attrition and they wring their hands about it, wring their hands out about, oh, we have attrition, we don't have it, whatever it is, that's a completely context less data point in and of itself.

We don't know if your attrition is good or bad just by the number itself. We can say you're losing this much money by tying your attrition to the cost of replacement, hard dollar and soft dollar. And cost of attrition, decreasing the cost of attrition is, I assume something every company wants to do. So I think really tying the metrics for bid HR perspective around your people to the business problems.

Another one with attrition, sorry, just to finish that example. So people see a high attrition number and then they're like, blaming the managers and they see a low attrition number and they're applauding HR. Really, actually, it's usually just about the managers more than it is about HR. And then can we tie that attrition data, let's say, to managerial effectiveness, to managerial training, to skills around inclusive leadership? Are we measuring those skills? Are we training for those skills? Are we measuring the impact of that training? Because that should increase, you know, retention and decrease attrition.

David Rice: As we think about, like, sort of the talent ecosystem, I want to talk a little bit about this idea of being like a human capital, financial impact analysis. Now for listeners who like, maybe aren't super familiar with what that is, can you kind of define it for us and then take us through it a bit? Like, what does it entail and what's the mission of doing one?

Diana File: Yeah, absolutely. So we do a lot of financial impact analysis. Dr. Solange Charas, my team leads that work and she's a renowned expert written multiple books, hundreds of articles on the topic and her research really shows that we can quantify how the return on investment of every dollar invested in people impacts the bottom line from a revenue perspective, from a profitability perspective, from a business outcome and value add perspective.

And that's a really important to do because human capital budgets are often built by guesswork. Oh, I don't know. Let's put this much money towards training. Let's put this much money towards mentorship or onboarding or benefits or calm. And this allows educated decisions to be made. You know, if we tweak the training budget by 5%, this is how much extra, you know, revenue we assume we'd make based on the regression model that we've put together.

And so that kind of work down to the program level is crucial and helps not only HR advocate for its impact to the business and get budget, but also make sure the business keeps HR honest so that we're not throwing dollars down the toilet on training that is ineffective or on onboarding processes that are missing the mark and therefore costing the company extra money because we have to have a higher turnover.

So that's all really important. And we can do them both at a macro level and at a micro level down to the, as I say, the program analysis, we also benchmark against peer companies. So you can see how you're doing against fellow companies in your industry. And that's really important because you want to be a leader, not a lag laggard as it were. From a DEI perspective, there's also a lot of data that Dr. Solange has gathered that we show our clients about how increases in diversity impact the ROI of your investments in human capital, which therefore then impacts revenue.

So a company that increases diversity, and she's done research on over 120 or 130 companies today, companies that increase diversity. Just diversity, not leaving, looking at the other letters of the acronym EIA, et cetera, will measurably increase their profitability as a correlation. And conversely, companies that don't increase diversity where it stays flat, we're not even talking about decreases, just flat, over time, their profitability and revenue go down as well.

So it would be silly not to invest in it.

David Rice: As we kind of touched on here, you're a big advocate of DEI and making it make sense for the business. I'm curious, what is your sort of impression of the last year or so, everything that's gone on around DEI? We've seen a big shift in political rhetoric and kind of the way businesses have reacted to that.

There's been a lot of realignment and rethinking about it, folding it back up under HR, things like that. So I'm interested, are you concerned about the future of DEI at all?

Diana File: You know, if you had talked to me six months ago, I would have said, no, that's all very silly. And the companies that are very serious about it are going to keep going.

And that is true to some extent, but I am concerned. I'm starting to get more concerned because the amount of companies that have come to us and chickened out after wanting to do something or have had their budget slashed or lost people is showing me that people aren't actually listening to the evidence. They're listening to the fear mongering that's going on.

And even though, you know, affirmative action was overturned, there's so much we did a whole webinar on how, you know, the court made strong points in support of remedial action plans targeted to make all historical discrimination. Nothing prohibits, this was Chief Justice Roberts. Nothing prohibits universities from considering applicants discussion of how race affected applicants. Life meaning not only are universities still allowed to incorporate narratives of people's experiences around discrimination into how they recruit, but of course, all the more so companies need to acknowledge those narratives and their differentiated experiences of their employees and what they bring to the workplace as a result.

Because they do bring different contributions based on those narratives. And so the cases are related to education. They're not related to employment directly, but we are seeing the parallel, the sort of corollary trend of people applying it to employment and saying who DEI is dead or affirmative action is dead.

Therefore, you know, there's no point investing in DEI. I think the financial impact analysis that we do is a huge like turning point for a lot of companies once they do that and they can demonstrate the business case. They have some evidence against those who are trying to sort of downplay the importance of DEI.

And I think certainly, given the mounting political pressure, we're definitely seeing layering DEI into learning and development, folding it back up into HR. I think companies that are doing that are short sighted, and I think it's partially due to the failure of the DEI efforts at those companies to demonstrate impact on the business.

And so it does become about HR, whereas it really could be around making the company more competitive advantage, growth orientation, and stuff that's actually business critical.

David Rice: One of the things I think will be interesting at where we're going to be able to tell who's sort of DEI initiatives really got institutionalized, we'll come around reskilling and upskilling efforts, right? We're seeing turnover go down. A lot of people are looking to stay in their jobs longer now as retention isn't really as much of a concern. Now it shifts sort of to development and management of that talent. And I'm curious, what are you looking to see in terms of signs of success of DEI being part of the culture as this next phase of the workplace, so to speak, unfolds?

Diana File: I think embedding DEI into everything the company does and having metrics that demonstrate that would be a sign of success. And I worked with a couple of really great ladies who wrote a book. The book is, presents a framework called the DEI Evolution. And it's by Priya Bates and Advita Patel. And we put an assessment together for their framework. So I know it very intimately.

And essentially it talks about at first, you sort of exist, nothing really changes, right? The company is just doing what it's always done. The second stage is enter where you start to dabble in DEI efforts. And in that stage, they do tend to make it performative, right? So a lot of times it's about the holiday celebration, commemoration, the potentially, you know, calendar events or talks, or maybe even a commitment on a website.

And then as it goes into the next stage, you're bringing in other elements that sort of put tentacles further into the business and that looks like education. So maybe some unconscious bias training, and you want to instill sort of the concepts of what DEI is and what it's about. So it's not just, oh, we had this one off event.

And then from there you move into embracing it. So embracing would mean really seeing real investment in ownership. Now you have some leadership in the DEI space. You've designated an individual or even a department. The leaders might officially even take on DEI mandates. And still in this stage, DEI is still often seen as separate from the business strategy.

When you want to make it part of the business strategy, you're really engaging it as a collective effort of change from leadership to the front line. That's the engage stage. And finally you have embed as the ultimate goal. And so that's when you see DEI embedded in the strategy and the mission and the vision and the values in the behaviors, it's just how we do things around here.

I mean, it's inseparable from the organization's identity. That's I guess the gold standard. So it's not just a matter of putting up some posters or creating some holiday celebrations, but it's how we run the whole company.

David Rice: We talk a lot about inclusion and I've seen this firsthand where there's like a lot of DEI fluff in an organization, right?

Like in my past work, I've seen this and some are really doing things with their data, right? The inclusion is really more of a cultural value. You've advised on some inclusion analysis. And so take us through what that looks like and how companies of all sizes can be thinking about executing something like that.

Diana File: Absolutely. I mean, the most basic level of inclusion metrics is a bunch of survey questions about how included do you feel? How comfortable are you to speak up in meetings? Things like that. When we do advise on surveys, we encourage asking questions about observable behavior and not emotion. So that's really important, right?

Like, cause somebody feeling included is like a wishy washy thing and it could be fleeting. Somebody actually being able to raise a hand in a meeting is an observable behavior or speak up. Further on sort of in the evolution of data from an inclusion perspective beyond the survey, I think it's really crucial to start integrating the concepts of organizational network analysis into your DEI analytics. And ONA or Organizational Network Analysis is the science of looking at how people are connected inside an organization, not in boxes and wires through an org chart, but in actual workflow.

And so that means looking at how work actually gets done, who goes to who with requests for information and transactions and collaboration how that looks across departments and you get essentially 3 to simplify it. You get 3 blocks of people that you can bucket. One, you people who are really strongly connected and influential, they have lots and lots of people coming to them that connections with lots of people.

They have a large network inside the organization. You get people who are the opposite of that, which would be isolated. So they're sort of off in a corner by themselves, not interacting with a lot of people. And then you get information brokers. So those are the people who are connected, but in this very specific way, which means they connect distinctly separate parts of the organization.

So they're crucial for change. So let's say someone who's got really good ties in product end in sales going to be a key linchpin for the success of a change. And so, when you look at mapping ONA onto diversity metrics, like HR data, like looking at, you know, differences in connectedness in status of being an isolated individual or a connected one across say gender dynamics or race or ethnicity or religious diversity or what have you, you start to see how included people really are.

Layering on top of you can do organizational network analysis surveys. You can do this inside sort of again through the survey where you actively get data for people, or you can do this through passive data. And this is the really cool part I think that most organizations miss and there's a lot of technology out there to do this many vendors that we recommend. And in those cases, you look at passive data, which is data that's already happening inside the organization. So it's more objective. It's not as subject to human perception. So it's not a survey. It's looking at emails and who's on emails. Looking at meetings, who's on meeting invitations? Who's in the room? Not is specifically those names, but in aggregate what types of people tend to be in the most important meetings or on email chains or get responded to quickly on an email or in a chat thread and any kind of collaboration software the organization is using.

So, creating dashboards that really monitor how included people say they are and how included they actually are in practice and how included people perceive other groups to be can show really great insights about the gaps between perception and reality, and it also shows kind of incontrovertible evidence when people are not included in things.

David Rice: Yeah, I love that because we have all these tools. They're all collecting data and the reality that they show doesn't always match our perception. So that's interesting stuff.

Now, you're also a passionate speaker. We've mentioned earlier about you studying international conflicts and being in the Middle East and I've seen you have webinars and a few different things on the conflict going on in Israel.

You've created some really interesting content around that. So I'm curious, you know, how do you feel businesses can better support employees when they're impacted by things like this? And you know, what sort of tone leadership needs to set when we think about things like the conflict in Israel and how it shows up in the people who inhabit the workplace?

Diana File: I think that's such a great question, David. I'll start by saying talking about it at all is already a step forward. I think most organizations stuck their heads in the sand when it happened or put out a statement. If they did, it was, you know, in many cases, performative and it was fleeting. And then we moved on to the next topic.

And that makes people like me really sad because we do come to work every day thinking about this stuff, if we've got family there, if we've got roots there, if we've got the clear evidence out there that anti Semitism and Islamophobia are on the rise, demonstrates that this is something that really, I think people have a moral responsibility to speak up about whatever your position is. At a minimum, just offering employees safe spaces to talk about this stuff.

Checking on each other, you know, leading with inclusion, with sensitivity, with compassion and empathy for what people are going through and sort of building those bridges across conflict and civil unrest. So we did launch a series called Breaking the Echo Chambers. And I partnered with a colleague of mine named Zaman Al-Adik, who is a Shia Muslim.

I'm an Israeli Jew. So it's the Jew and the Muslim talking about our experiences. Neither of us are rabbinic professionals and neither of us are, but you know, clerical professionals, she's not an imam, I'm not a rabbi, and neither of us are international relations experts. But we are humans affected by this conflict, raising families, raising children, who we want to live in a better world.

And unfortunately, I did see a lot of companies start to test the waters and then get scared and chicken out, pull the talks, pull the events, decide they don't need to pay attention to it. We are partnering with organizations that are interested in exploring this further, offering this as a resource to their Middle Eastern ERGs or their Jewish or Muslim ERGs.

But really it's a phenomenon that's not just limited to being Jewish or Muslim or living in the Middle East. There's a worldwide phenomenon right now around this. And then it's a movement, the terrorist movement that really is seeking to overthrow Western civilization. And so educating people is really important and moving from conversation to action in terms of navigating real life situations, whether that be as simple as incidents of hate in the workplace that are illegal and people need to have a forum to address those.

Or I don't know, corporate partnerships with nonprofits or with government entities or encouraging donations, or kind of recognizing that people can't leave it at the door. And yeah, I am seeing, unfortunately, a lot of hesitation to act. And I think it goes back to what DEI is all about, which is it's messy and none of us has the answers and doing something is still better than doing nothing, even if you do it wrong or incorrectly at first.

David Rice: Absolutely. So before we go, there's two things we'll need to do. The first, I want to give you a chance to tell people more about where they can connect with you and find out more about what you're doing.

Diana File: I appreciate that. So it's www.dfanalytics.co.

Our contact form is on there. My email is Diana@dfanalytics.co. You can find me on LinkedIn, Diana File or DF Analytics. We have a company page as well. Please don't hesitate to reach out, you know, email, call messenger pigeon.

David Rice: And the last thing is I have a little tradition here on the podcast where you get to ask me a question. So I'm going to turn it over to you. Ask me anything. Shoot.

Diana File: Oh, I should have prepared a question.

What is the worst example of DEI you've seen being implemented in an organization and what's the best?

David Rice: Oh God the worst probably comes around gender equity, like the pay differences, taking women seriously in certain situations.

I've been part of a couple of organizations where I was just I guess the only word I could use for it is it was a little disgusted by the way that people were treated and their ideas diminished or even stolen in some cases. It was really gross. So that was probably the worst that I've seen. The best, probably wasn't an organization I've worked at, but it was an organization that we used to consult at a company I used to work for. I chatted with them and did a case study on the way that they launched their faith-based ERGs.

And it was just really like the level of thought and detail and, you know, I remember asking her, like, so, you know, did anyone say, like, if we're going to take this approach, like, is it going to be okay if the Satanists show up? Like, you know, like, let's be real, you know, like, is it, if it gets into witchcraft or something like that, does that count? Like, well, how do you draw the lines on all that? And the way that she like explained it and the level of thought that the organization put into it and like, it got hard, it got messy, but they stuck with it. And the way that they like, where they ended up with it as a product I think was something that they could all be really proud of. And so I thought that was really cool.

Diana File: That's awesome.

David Rice: Yeah. So that was a cool example. So yeah, great question.

Well, thank you for coming on today. I appreciate you giving us some of your time.

Diana File: Yeah, absolutely. Thank you for having me.

David Rice: Listeners, if you want to keep up with all things DEI, HR, people operations, what comes next for this segment of the HR world, and you're not already subscribed to our newsletter, head on over to peoplemanagingpeople.com/subscribe and get signed up.

Until next time, do some yoga, buy a house plant for spring, it's gonna get warm soon.