Editor’s note: Veteran entrepreneur and investor Donald Thompson writes a weekly column about management and leadership as well as diversity and other important issues for WRAL TechWire. His columns are published on Wednesdays.

RESEARCH TRIANGLE PARK – Analysts, economists and executives have been attempting to read the economic tea leaves for months. Every report provides additional fodder, from macro-level changes like the Fed adjusting interest rates to local issues such as fluctuating apartment rental prices. But, context is everything. The old saying “the devil is in the details” is particularly revealing when it comes to looking at a perplexing fact in today’s c-suite – the short tenure of many chief diversity officers (CDO). 

Donald Thompson

Anytime you have high turnover in a specific role, people immediately want to tie it to a larger macro event, like the “great resignation.” In some respects, that provides an easy answer, but unfortunately, it’s incorrect – merely a contributor, not the whole reason with proper context. Since the CDO plays such a critical role in the life cycle of diversity, equity and inclusion (DEI) programs and overall culture change within organizations, let’s take a deeper look at why the position is often doomed from the start and then explore ways leaders can flip the switch.

An Infrastructure Built for Success

The main driver of the short tenure of chief diversity officers is the mismatch between what the candidate was hired to do and the resourcing, environment and support the leader needs to actually meet those goals. At many organizations, there is initial momentum for hiring a CDO, but the internal foundation hasn’t been created. As a result, no one can counsel or mentor the candidate on how to be successful. 

In many cases, it’s a completely new role and no one inside the business has any idea how to integrate, onboard or include the leader at the decision making level they were brought in to address. When these points converge, the chain reaction leads to a negative outcome. 

Without an infrastructure designed for success, the CDO may get frustrated by feelings of inertia or wonder whether the rest of the C-suite and board of directors are engaged and energized by DEI initiatives. 

The “Department of One” 

Culture transformation is difficult and takes wholesale buy-in whether at a venture-backed startup or large corporation. Frequently, the desire for a quick fix leads a CEO or board of directors to hire a star performer, but without the team to set the role up for success. In these instances, the CDO often serves a “department of one.” 

Without a team, the CDO is alone out on an island with no help as they tackle the difficult task of creating workplace excellence. The job is simply too heavy a lift.

If an organization wants its new leader to be successful, it’s “the chief diversity office” – plural. A solo CDO is pulled in two competing directions: trying to score quick wins, while also finding the time and attention to learn the organization. You have to know the current culture before you can transform the culture. 

Tying DEI to Business Outcomes

The short tenure challenge can also be attributed to hiring a CDO that doesn’t have the right skill set to be successful. For example, a CDO usually has significant human resources experience, but not the P&L experience or a deep enough understanding of sales or operations to make the link between DEI and the financial triggers that tie the people aspects of the role to the P&L responsibilities of the business. So we’re seeing that companies are hiring chief diversity officers with the wrong tools to win. 

Temperament is a foundational ability for CDOs and should be part of the hiring process. The diversity leader needs to know how to tie DEI initiatives to sales wins or show the chief financial officer how a stronger culture leads to better retention and recruitment, actually saving money in these critical parts of the business. 

Getting the CDO Role Right

Some of you might be reading this right now and wondering: “chief diversity officer…we’re scaling back, not bringing on new people.” I get it, you’re hearing a lot of fear mongering, so it may seem prudent to start cutting back now, just in case. However, my response to that pushback is to urge you to not make that mistake.

Instead, learn from the lessons of the Great Recession. Organizations that reduced culture-related programs during those tough years learned that they were at high risk for diminished productivity, employee turnover and extensive brand damage. Studies have shown that organizations with inclusive cultures thrived before, during and after the Great Recession, earning a 4x annualized return compared to the S&P 500.

A poll from early 2022 reinforces the importance of diversity at the executive level, with 78% of respondents citing that diverse leadership improved the culture of work, which led to stronger overall performance. Based on these kinds of survey results, it’s not a stretch to say that cutting back on DEI programming is simply the wrong move. 

I am moderating an online panel discussion on this topic on Thursday, 8/4, titled “Stay the Course: Investing in DEI During an Economic Downturn.” I’m joined by three c-suite colleagues who have decades of combined experience of leading organizations and working toward culture transformation regardless of the economic situation. You can register here. All registrants receive a free copy of The Diversity Movement’s industry briefing, In a Recession, Is DEI Essential or Just Nice to Have?

Key Takeaways 

As I mentioned earlier, context is ultra-important in understanding why something has or will happen. For the chief diversity officer position, if you really want to find success, we need to go deeper – into the interview process itself. You need to have people on the search committee who have held the role.

Too many times I’ve talked to c-suite leaders about what went wrong in a diversity position search only to find out that no one on the interview team came from the diversity business. I then wonder, “why are you surprised you failed? You’re not even asking the right questions.” 

Once the CDO is hired, the first 90 days are critical, so the best way to get the person started on a path toward success is to demonstrate that the organization is committed to creating a stronger workplace culture by engaging the entire c-suite and board in DEI education and training. Then, when the CDO comes on board, they are surrounded by leaders who have ideas about how to improve the workplace and an understanding of the role and its objectives. This is so much more powerful than a situation where the new leader has to convince their colleagues why they matter. 

Organizations that bring in chief diversity officers are earnest in their desire for that person to be successful, just as the candidate wants to be a strong leader. Too often, however, the necessary guardrails and support systems haven’t been put in place as a runway toward winning. 

About the Author

Donald Thompson is CEO and co-founder of The Diversity Movement which offers an employee-experience product suite that personalizes diversity, equity and inclusion (DEI) through data, technology, and expert-curated content. Their microlearning platform, Microvideos by The Diversity Movement, was recently named one of Fast Company’s2022 World Changing Ideas.” With two decades of experience growing and leading firms, Donald is a thought leader on goal achievement, influencing company culture and driving exponential growth. An entrepreneur, public speaker, author, podcaster, Certified Diversity Executive (CDE) and executive coach, Donald also serves as a board member for several organizations in marketing, healthcare, banking, technology and sports. His memoir on leadership, Underestimated: A CEO’s Unlikely Path to Success, is available for pre-order now. Connect with or follow him on Linkedin to learn more.