Diversity Profit Equation

Topics: Rate of return, Employment, Productivity Pages: 18 (4559 words) Published: October 10, 2013
The Diversity
Profit Equation
Corporate White Paper
Written By: Craig B. Clayton, Sr.

Published By
The Diversity Profit
Rutgers University
- Paper Attached
Journal – “The
Diversity Factor”

Equation dPE

This document explains the process of calculating the impact of Diversity and Inclusion efforts on the organizations top line, bottom line and pipeline. It was written by Craig B. Clayton, Sr. one of the worlds leading experts on D&I and ROI. He holds a process patent on the Diversity Management Process and has written and published articles linking D&I efforts and programs to performance, productivity and profitability. He has developed the “Business Validation Assessment” tool which calculates a Leadership Effectiveness Index as well as an Organizational Inclusion Index which are both linked to driving the ROI for D&I programs, policies and practices.

Since 1999 he has been the Director & Diversity Strategist with the University of Houston’s International Institute for Diversity & Cross Cultural Management – located in the C.T. Bauer College of Business.

The Diversity Factor © 2010
ISSN 1545-2808
Fall 2010 (3rd Qtr, 2010)

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Measuring Diversity Return on Investment (ROI)
Volume 18, Number 3

A new way to build the business case for diversity based on the numbers: The Diversity Profit Equation (d/PE™)
Craig B. Clayton, Sr., founder and CEO of The Spartacus Group and director and diversity strategist with the University of Houston's International Institute for Diversity and Cross-Cultural Management, located in the C. T. Bauer College of Business.

Craig B. Clayton is an
organization
development consultant
and director and
diversity strategist with
the University of
Houston's International
Institute for Diversity
and Cross-Cultural
Management. He is also
the CEO & founder of
The Spartacus Group.

Today, as the U.S. economy pulls out of the
recession/depression, companies are putting a strong
emphasis on productivity and regaining momentum in terms
of profits. This environment has impacted diversity programs. One major question today is, "What is the [financial] Return on Investment?" In this article, the author presents an
analytic, business-based framework for measurement,
showing companies how continued derailing behaviors
and/or micro-inequities including subtle forms of
discrimination can impact companies in terms of lost work
time and productivity.

SIDEBARS
Derailing Behaviors
Constituent Impact
Diversity Incivility
Fiscal Impact
Case Study

For years, associations and best practice groups have been working on solutions to the challenge of diversity Return on Investment (ROI)—that is, how to measure the return on their diversity investment. Before the economy worsened during 2008–2010, many practitioners didn't spend a lot of energy validating the ROI. Instead, their efforts were aimed at getting the organization to understand valuing diversity as "The right thing to do." Today, another approach is emerging. Companies are increasingly looking at more quantitative ways to link corporate diversity efforts to ROI. Taking this approach is the first step to positioning diversity management, not as another cost center, but as a strategic initiative. In this paper, we will discuss the results of a study done by the University of Houston's International Institute for Diversity and Cross Cultural Management and how it has laid the groundwork for us to develop a useful measurement —diversity return on investment—or more specifically, diversity impact on earnings through the use of a Diversity Profit Equation (d/PE™), which is explained later in this article. The reality of a diverse workforce

"Companies are
increasingly looking at
more quantitative ways
to link corporate
diversity efforts to ROI."

Having a diverse workforce is not an...
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