Lessons from CHROs: How to Build a Diverse Pipeline at the Top

Like so many challenges this year, the war for diverse C-Suite candidates has reached unprecedented levels in 2020.

That’s a good thing.

Finally, most companies are connecting the benefits of senior executive diversity to their bottom line. And societal expectations – what some call the “C-Suite Me Too” movement – are encouraging organizations to build a much more diverse top bench. This drive for diversity is redoubling demand for women and racial minorities in senior executive pipelines.

That’s a big issue.

In a recent survey, Chief Human Resource Officers (CHROs) said the top two obstacles to create a more diverse C-Suite candidate pool are a dearth of ready internal talent and lack of external diverse talent.  The survey of 100 CHROs was led by the Center for Executive Succession (CES) to assess the level of diversity in senior leader pipelines and identify obstacles and strategies for improvement. The center is housed in the Darla Moore School of Business at the University of South Carolina.

I’m the CES Executive Director and a member of the team that conducted the research.  My last article detailed key learnings from that survey.  In this feature, I focus on the recommendations our team developed from our analysis of the CHROs’ feedback.

6 Ways to Build a More Diverse Senior Leadership Team

While the results of the survey were sobering, the CHROs shared great suggestions to drive diversity at the top of organizations.  The CES team integrated their feedback int

Six recommendations:

1. Set the Tone from the Top: Manage and Measure the Pipeline
   Our analysis validated the importance of unwavering, visible support from the CEO, board and senior leadership team.  Despite some progress, many CHROs privately expressed concern that their senior leaders’ rhetoric about the value of diversity is not always supported by their decisions and actions.  As a result, they emphasized the need for measurement systems that evaluate and reward leaders for improving the diversity of their team – and hold those who don’t deliver accountable.
   When I was CHRO at SunTrust in 2012, we recognized the need to increase the diversity of our board and executive team.  We developed distinct goals, communicated them clearly and established a process to measure our progress and drive accountability across the C-Suite and board. For a full year, whenever opportunities arose, we deliberately developed a broader pipeline.  As a result of that intentional focus, well-qualified women and people of color (POC) were selected for 100 percent of our three vacant executive and four new director openings.  Building on that success, we created a systemic diversity goal-setting and measurement process through annual executive compensation scorecards, spurring leaders to identify women and racial minority candidates and holding each other accountable to deliver.
   Another way to set the tone from the top is to institute diversity/inclusion/implicit bias training. A number of CHROs in our sample said they are implementing this training.  While there has been some success with these efforts, our studies suggests the need for innovative approaches to mitigate defensiveness and improve effectiveness.
2. Recharge Recruitment: Build the Pipeline
   Our research found two primary ways to build a more diverse pipeline: 1) expand recruiting sources, and 2) identify and inspire women who aspire to operating roles.  To improve efficiency, many organizations have narrowed the number of universities from which they recruit.  That’s an issue: Many traditional universities have a limited number of minority candidates from which to choose.
   One effective strategy CHROs cited: expand recruiting to Historically Black Colleges and Universities (HBCUs). Based on high demand for the limited number of students, companies also need to connect with other non-traditional schools or sources such as military veterans that have large numbers of individuals from underrepresented groups.
   Another strategy CHROs suggested is to encourage women to consider operating roles, noting  some women lack confidence to pursue these positions.  Their recommendation: Identify graduating women who display interest and encourage them to consider operational paths such as manufacturing, supply chain and product development.
3. Lead Development: Refine/Expand the Pipeline
   Identifying women and racial minority applicants who aspire to operational roles is the first step. Once hired, the organization needs to begin assessing their potential immediately. This often requires greater engagement with diverse team members in the first few years with the firm. Because these candidates face obstacles not faced by white males, paying special attention may help to identify candidates who, if left to normal processes, might be overlooked.
   Our research also demonstrates the value of developing diverse talent early and often. Job rotations, special assignments and mentoring may help develop and assess those individuals early to better position them for success later in their careers.
4. Encourage Promotion: Flow the Pipeline
   As noted earlier, many CHROs said women often are less likely than men to feel qualified enough to apply for certain roles. Their guidance: Don’t wait for volunteers!  Aggressively recruit qualified women and underrepresented groups to apply for critical roles.  It boosts their confidence, builds a better pipeline and benefits their career progression.
   Another strongly recommended strategy is to require diverse promotion slates. Requiring managers to identify diverse candidates often means they must expand their personal network and exposes them to talent they may not have known. That’s a win for all!
   Once organizations have encouraged women and racial minorities to take on certain roles, they must accept the risk that they may fail.  One CHRO noted that companies take risks on white males, but can be hesitant to do the same for diverse employees. Rather than put them into “sink or swim” situations, organizations should provide support to maximize the probability that they will succeed.
   In some cases, geographical constraints are a challenge to increasing diversity in the talent pipeline. Women may be reluctant to repeatedly uproot family to move for “developmental” roles.  And in some cases, racial minorities are hesitant to relocate to communities where there are few if any people who look like them. As we’ve learned through the pandemic, many roles can be done remotely so the employees can stay in their geographic home while traveling and leveraging technology for communication.
   Many CHROs noted the use of experiences as part of promotion criteria have deleterious effects on women and racial minorities. If bias or obstacles have prevented their ability to gain those experiences, this requirement perpetuates the problem. Since experience is only one way to develop competencies, a focus on skills vs. experience can increase the number of women and POC in the pipeline.
   Reducing bias that may lead to lower evaluations is another recommendation CHROs shared.   One way to do that is to monitor the distribution of employee performance and potential scores by managers and address issues when they arise. A few CHROs noted the occasional need to “force” promotions beyond the usual process. If a disproportionate percentage of women and POC seem to be held back in some functions or areas, this may prevent bottlenecks.
5. Enable External Hires: Fill the Pipeline
   Our research reinforced that finding qualified candidates is the primary obstacle for building more diversity in the talent pool. While the steps above can help build the pipeline over time,  immediate needs often require external hires. CHROs note they continually monitor the market to identify diverse talent.
   Competition creates the need to move fast. When they find a great candidate, many firms don’t wait for a relevant position to open – they create one.  In addition, CHROs are requiring diverse slates from external search firms – asking them to go beyond their easily accessed networks to seek out diverse talent.
   And as a longer-term strategy, some companies are investing resources in middle schools, high schools, and colleges to build relationships with students who may never have considered particular careers or industries.
6. Facilitate Retention: Prevent Leakage in the Pipeline
   A number of CHROs noted the need to get women and POC exposed to the top of the organization including the C-Suite and board.
   At SunTrust, we developed a program called INSIGHTS to enhance diversity in our pipeline. It was a self-nomination process for mid-level leaders. The Executive team selected 30 participants each year to form a 15-month “cohort,” with the requirement that 60 percent were diverse teammates. INSIGHTS involved formal leadership programs and special business projects.  Participants met with executives and board members, providing great visibility and opportunities to learn.  The result?  95 percent retention and a much more diverse pipeline for SunTrust leadership positions.
   Another strong suggestion is to create mentors/sponsors for diverse employees. CHROs note this practice helps develop women and racial minorities, creates credible advocates for their advancement and retains top talent.  In addition to mentors and sponsors, senior HR leaders can play a very effective role as sounding boards and allies who stay in close contact with women and POC who are in high demand in the external labor market.

A Final Note: One of the key take-aways from our research: Building a diverse pipeline at the top takes a major investment of time, energy and money.  But it’s worth it!  Numerous studies validate diverse leadership teams enhance a firms profitability, innovation and reputation.

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