Matt Krentz is the Managing Director & Senior Partner, Diversity, Equity & Inclusion, and Leadership Chair, Boston Consulting Group, Chicago. He is responsible for developing BCG’s DE&I offering for clients and advising chief executives and senior management on their diversity and inclusion strategies. Prior to this role, he served as the firm’s Global People Chair and was a member of the Executive and Operating Committees. Matt currently sits on the Board of Advisory of Catalyst; the Business Round Table Diversity & Inclusion Working Group, the World Economic Forum’s Partnering for Racial Justice in Business initiative. Matt has received recognition for his advocacy including: HERoes Advocate Role Model in 2019 and 2020, OUTstanding LGBT+ Ally Executives Role Model in 2020, and Global Champion of Women in Business, Financial Times in 2018.
Here are the excerpts of the interview.
In the wake of the turmoil of 2020, global awareness for diversity and inclusion and embedding tolerance into the company culture has taken on new urgency. How do you see the larger current DE&I landscape globally?
Diversity Equity and Inclusion (DE&I) is more important than ever. A confluence of crises: demands for racial justice, #MeToo, BLM, COVID-19, and an economic downturn, makes this a critical moment for corporate DE&I.
In particular, we see an urgent need to support our employees who are caregivers. In most societies caregivers are women. We’re seeing women dropping out of the workforce in the millions in order to be able to educate and care for children and elderly families. Since April 2020 our research found that parents now spend an additional 27 hours each week on chores, childcare, and education. And women are spending 15 hours more each week on domestic labor than men.
Over half of parents surveyed—both women and men—said their home responsibilities had increased during the pandemic while their ability to perform their work had decreased. Besides, parents were concerned about being at a disadvantage compared to other employees.
Without a long-term strategy to support caregivers, companies may lose much of the hard-fought progress of the last decade. Leadership pipelines will become less diverse and that will impact innovation and resiliency.
In addition, the call for social justice in the US, and around the world, was also a defining moment for many organizations in 2020. It’s encouraging to see many organizations stepping up and using their influence to dismantle systemic racism. For example: PepsiCo’s $350M commitment to supplier diversity initiatives, BBC has announced that 15 percent of on-screen talent must come from BAME, and Sephora has pledged 15 percent shelf space to Black-owned brands.
It’s certainly an incredibly challenging moment for company leaders but I’m optimistic that 2020 was a catalyst for change that has been long overdue.
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Do you think the COVID-19 pandemic exposed the fact that some organizations don’t perceive diversity and inclusion as a core value? Or, are things changing?
I think the business case for DE&I is widely known and accepted, and company leaders have good intentions. But often DE&I isn’t treated with the same rigor as other business priorities—which get leadership attention, systems to track progress, and strong implementation. We surveyed 16,500 people worldwide and found that while nearly all companies have diversity programs in place only about a quarter of employees in diverse groups said that they have personally benefited. Leaders have good intentions and launch programs that they think will yield improvements, but their decisions are based on gut instinct rather than proven results. Unless they acknowledge their blind spots, these leaders won’t make meaningful progress.
What are some bold steps that organizations and governments should take to fill the gaps and inequalities COVID-19 has exposed to create a fairer society?
The main goal for companies should be to continue devoting time, capital, and management attention, and to ensure that they run DE&I not as a separate initiative but as an initiative integrated into everything that the company does and every decision that its leaders make.
A holistic DE&I strategy requires attention to business drivers, along with internal and external factors. A sound strategy should involve (1) deploying resources for social and systemic change (e.g. philanthropy, investments), (2)taking a critical look at your own teams and culture with an eye to mitigate bias, and (3) improving representation and inclusion and serving broader market segments and increase supplier diversity.
Each organization will need to look at its own unique challenges but one specific way an organization can level the playing field between male and female employees, and between those with children and those without, is to offer flexible working options. In some industries and sectors that may not be possible, but where feasible it should be considered as part of the “new reality”. Flexible working options (choosing, when, where, and how much you work) are ranked by both men and women in our research as one of the most effective interventions for recruiting, retaining, and advancing talent. Flex-work programs need to be available to and utilized by both women and men. They should not be gender-specific or designed to support one particular situation (such as a woman’s return to the workforce). Men should be actively encouraged to use the program, which will help remove any gender-based stigma associated with it.
In addition, with women leaving the workforce by the millions because they are supporting online learning and child/eldercare, organizations will need to establish hiring/rehiring policies that evaluate women who return to the workforce based on their pre-leave track record. Without factoring in COVID-caregiver status, women will face an unfair burden of a “COVID-tax” on their careers.
With leaders in every industry working hard to protect employees and build resilience, what according to you, should be their strategy about embedding a culture of inclusion across their organizations?
Companies are making steady progress in diversifying their workforces, but diversity without inclusion is just a numbers game. The combination of diversity and inclusion is what unlocks real value. An inclusive culture means all team members have the opportunity (and are expected) to contribute their points of view, their opinions are valued. But when employees from diverse groups don’t feel they have opportunities to speak up and be heard, or they don’t see role models like themselves, they fall off the track to more senior management and leadership positions. Then, employers miss out on the benefits of diversity.
In our research, we found that the more dimensions of diversity a person has, the less likely are to feel included. For example, someone who is a lesbian of color is 15 percentage points less likely to feel included than white, heterosexual men. We think there are five success factors for achieving a more inclusive culture:
- Change needs to start at the top, with leadership/CEO highlighting DE&I as equally weighted priorities
- Involve frontline leaders who directly manage line employees – it can make or break transformation efforts
- Identify successful leaders and what they do differently; observations help to develop standardized tactics and tools that others can apply
- Publicize values, anti-discrimination/harassment policies, and codes of conduct; take all complaints seriously
- Objective results need to have consequences – rewards for top performance and additional training/attention for leaders of teams not meeting the new standard.
Only by cultivating a more inclusive culture, companies can unlock the potential of all of their employees.
Large companies are viewing remote work as a viable option as it broadens the talent pool and creates more opportunities for inclusive working and hiring practices. What if remote work does not turn out to be sustainable as we come out of this crisis?
Remote work won’t work for everyone in every industry, especially shift-workers, frontline workers, and those in service industries. But for other organizations, this huge global experiment we’ve gone through during the pandemic has shown that remote work does work for many organizations. However, it’s important to consider that not everyone can or wants to work from home five days per week. Leaders should involve employees in the creation of policy and offer flex options that involve a hybrid model and consider satellite workspaces like WeWork, for instance.
Where do you see the DE&I agenda 2-5 years down the line? Do you expect significant changes in terms of how organizations perceive diversity and inclusion practices as a sustainable competitive advantage for their company?
DE&I is not going away. It’s part of the new employee value proposition and businesses understand that DE&I improves the bottom line, increases innovation, and drives resilience.
When we look at the great recession of 2007 – 2009 we saw that the S&P index declined by more than 35%. But in organizations that scored hirer on inclusivity, their stocks rose by 14 percent. Now is the time for leaders to step up their DE&I game—not despite, but actually because of, the pressures they currently face.
Greater diversity fosters innovation, but it can also strengthen resilience—the capacity to survive the unexpected—which is critically important right now. Organizations equipped with a range of voices and perspectives throughout the ranks are better able to innovate, take risks, solve problems creatively, and turn challenges into opportunities.
What’s your DE&I mantra? How do you measure the impact of your initiatives?
Measuring and tracking is one of my DE&I mantras. You’ve probably known of Pearson’s Law: "When performance is measured, performance improves. When performance is measured and reported back, the rate of improvement accelerates." I truly believe that if organizations want to improve the effectiveness of their DE&I programs, they need to put performance goals and metrics in place and hold leadership accountable. I also firmly believe that employees in diverse groups cannot move the needle on their own. In most organizations, leadership teams who craft policies are predominantly male. So in order to make meaningful progress, men must be involved.
Read more such stories from the February 2021 issue of our e-magazine on 'The Moment to Fix the DE&I Equation'