An Imperfect Journey to Measure Diversity and Inclusion – How We Built the Diversity Matrix

In theory, we have always known that a diverse and inclusive workspace drives creativity, innovation, and growth. There’s already been a lot of coverage and business cases highlighting the value of diversity, equity, and inclusion (DEI) strategy and steps to implement it. According to the McKinsey report about DEI, corporations identified as more diverse and inclusive are 35% more likely to outperform their competitors.

Looking at only one dimension of diversity, gender, we notice a significant gap between the theory and practice. According to BCG’s recent research on gender diversity, 91% of companies have a program in place, yet only 27% of women say they have actually benefited from it. There are multiple underlying causes behind the gap, including insufficient funding for DEI activities, exclusionary cultures within companies that hamper the success of more diverse workforces, and non-inclusive job offers.

Regardless of the root cause, companies may simply not know where to start. Shifting from a predominantly white-man-dominated workspace to a diverse mix of employees from different races, genders, cultures, and socio-economic backgrounds is a multilayered challenge.

In our case, it felt overwhelming at the start but we decided to take small steps towards the change, even if it would mean starting imperfectly.

Even though our journey was not perfect (and the current state of things is still far from our aspirations), we want to share our path and our mistakes openly to encourage other companies to follow the path, keeping the mindset

"act before we are ready,"

as Marit van Egmond advised during the B For Good Leaders Summit in May 2023 in Amsterdam. It has guided our approach to DEI metrics, and we believe it will allow you to make significant progress despite initial imperfections as well.

Our first mistake: Cherry picking areas for improvement

Advice: Start with collecting whatever data you have; simply start with anything

Only a few years ago, we consciously noticed that the majority of faces during key leadership meetings were men (around 40 years old). Although it was a reflection of the industry back then, we finally stopped taking that as an excuse.

The human resources consulting company Mercer found that much attention has been given in recent years to the lack of diversity on corporate boards, which has forced companies to act on that front. As a result, all S&P 500 companies now have at least one woman on the board.

The realization of that point made us kick-start our first DEI dashboard. We simply took the list of protected characteristics from anti-discrimination regulations and whatever else we had in data and decided to see what the numbers showed.

As a result, the very first Netguru DEI dashboard was born. Imperfect as it was, it gave us the first “Diversity at a Glance” overview.

Second mistake: Working with unconscious bias only

Advice: Learn about and use Inclusion Nudges like we did

As Kahneman proved, we have a tendency to act emotionally by default (thinking fast) without engaging in analytical thinking and activating logical analysis (thinking slow) before taking action, which takes more effort. That leads us to assumptions that exclude people in many ways.

That’s why we moved to designing discussion, decision-making processes, and policies to nudge inclusivity. This is where Lisa Kepinski’s and Tinna C. Nielsen’s concept called Inclusion Nudges came in.

Inclusion Nudges are practical interventions that nudge the unconscious mind to automatically be inclusive in behaviors and choices.

For example, you can use so-called flip questions to check your automatic response to “If she was a he, would I have given a stronger endorsement of her idea?” or similar questions. Or remember to write before talking to reduce group conformity, which can help to reduce self-silencing and other group dynamics during any meeting. Simply instruct participants to write their perspectives, thoughts, and experiences on notes (anonymously) before anyone talks. Then take turns in reading out loud for each other and talk about the issues being raised (and not the person who raised them). This ensures that contributors experience psychological safety and everyone has access to a diversity of voices and perspectives.

Third mistake: Underestimating the role of language

Advice: Develop practices to improve language in your everyday culture

The language used in everyday communication, both formal and informal, is an essential tool for creating a friendly and inclusive work environment and a culture of belonging. Inclusive language is free of words or phrases that reflect (sometimes unconscious) prejudices, stereotypes, privileges, or discriminatory attitudes or views of individuals or groups.

We recognized many micro-messages we didn’t react to at the beginning. That’s why we decided to launch an initiative promoting inclusive language.

Our “Narrative Matters” campaign aimed to foster an inclusive workplace culture through increasing knowledge of inclusive language and its role. We shared a series of articles that would help the employees shift to using more inclusive language:

#1 Narratives Matter: "Like a girl" – what does it mean to you?

#2 Narratives Matter: "Illegal immigrant”? A person cannot be illegal, an act can.

#3 Narratives Matter: “I couldn’t even tell you were gay.”

#4 Narratives Matter: “Mentally ill”? Try: “person with a mental health condition.”

#5 Narratives Matter: “He’s deaf/ blind/ disabled.” Try adding “a person.”

The year-long campaign was supported by additional discussion panels and events.

Fourth mistake: Focusing energy on explaining the importance of gender balance

Advice: Leverage the research, books, and resources available out there and focus your energy on advancement

When I joined Netguru as a Sustainability Lead, I would deeply engage in every conversation about why we should be cultivating a diverse work environment, empowering women, and really taking the steps to improve gender balance. Whether internally or externally, I would spend a lot of energy on educating others about the whys.

While it’s essential to raise awareness within the organization and keep people informed, there’s years of research and data available on the topic. Make the skeptics do the homework themselves: direct them to the trusted sources while directing yourself to make changes in the organization.

At the beginning, we focused on increasing the proportion of women in senior positions as well as in departments with low percentages of female employees (e.g., Delivery). A high level of gender segregation was the most visible challenge in the diversity matrix then. We believe the presence and representation of women at every level of the organization is a force for good.

Another area was internal education to address stereotypes about knowledge, competencies, and skills associated with gender to then be able to appropriately respond to gender-biased micro-behaviors.

As a result, at Netguru today, women are represented at every level of the organization: Supervisory Board (25%); Board (50%); Core Leadership Team (44%); Director and Managers (45%); and Women in Tech roles (27%).

Fifth mistake: Getting discouraged by those who tell you it’s only marketing

Advice: Follow the purpose and speak loud about …Hidden Heroes!

In a world full of greenwashing and campaigns driven by ROI, we became very skeptical toward the intentions of any marketing activities. The word campaign can automatically be associated with negative connotations in this context. But if a company decides to invest their resources in activities promoting diversity instead of generating demand, not only are they making the change within their workplace but they are also setting an example for others. At the end of the day, the intentions are of little importance if the impact of our actions is positive. We decided to take a bold move and invest in a purpose-driven campaign, our biggest one so far, aimed at acknowledging the importance of diversity in innovation. Our global campaign Hidden Heroes features engineers, scientists, and designers – people who generally don’t make it to the front covers like Steve Jobs and Bill Gates.

It showcases the stories of those who have built the foundations of modern technology. The stories of Pattie Maes, Radia Perlman, Lou Montulli, Douglas Engelbert, Phil Zimmermann, Gladys West, Nasir Ahmed, Grace Hopper, and George Samuel Hurst, Jeff Han, and Ken Kocienda. They are authored by Steven Johnson, a popular American writer and presenter, and are available on their own dedicated website.

In addition to the stories featured on the main website, we also highlight the stories of people from different backgrounds and underrepresented groups on our other channels – Black Hidden Heroes and Hidden Heroines.

Measuring diversity today

Today, we know that measuring diversity and inclusion is a step-by-step journey, at least for us. We decided to focus on the data and measures that we could monitor on a long-term basis. We want to be able to understand the metrics so we can deep dive into them and search for patterns and potential aspects that determine our DEI reality.

We know that it is a matter of both analyzing the data and also making conclusions and actions based on what we find. That is why we are closely looking at gender, age, and nationality data together with different company demographics like department, role, and position.

The DEI KPIs that we monitor on a regular basis cover the following areas:

• Women’s representation overall
• Women on the Supervisory Board
• Women on the Board
• Women in Core Leadership positions
• Women in Management
• Women Leaders
• Women in Tech
• Women in Non-delivery

#2 Gender pay gap: After trying general models for calculating the gender pay gap, we decided to work on a more adequate model. We are calculating the gap as the difference between women's and men's median total salary, expressed as a percentage of men's total salary, and we calculate it based on the data of organizational units that are gender diversified. Therefore, we exclude data from organizational units that are homogeneous in terms of gender, so that they do not affect the gender pay gap calculation. From our perspective though, the overall population should be analyzed in terms of pay equity, not by gender pay gap.

We do know that it is not ideal and we intend to improve it with time. There are many conditions that affect the gap and we know that this measure should also be analyzed with a focus on different employee and company demographics.

As mentioned at the beginning of this article, we decided to monitor and deep dive into imperfectly crafted measures so that we have a starting point for iteration.

• People 25-39 years old
• People in their 20s
• People in their 30s
• People in their 40s
• People in their 50s
• People in their 60s and above

#4 International team members on board: The number of people coming from different countries and working at Netguru.

#5 Total turnover rate: The percentage of voluntary terminations calculated as the number of total terminations (people with a last day of contract) within the period in relation to the average of people employed at the beginning and at the end of the period). We monitor total turnover as well as voluntary and involuntary turnover rates in different company demographics (i.e., tenure, role, department, gender etc.).

Tracking DEI is just a first step to understanding company dynamics and further strategy development. Go to Netguru Diversity landing to find out more about our actions in this area and check out our first non-financial information disclosure!