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32 | TH E M R EP O RT FEATURE are passed up for promotion because the in- terview panel simply doesn't recognize them. One of the best ways to resolve this is by institutionalizing nine-box evaluation grids, which are progress charts that measure individuals by job performance, skillset, and potential. The exercise is typically performed twice a year with all managers and shared with executives throughout the company. They are useful because they provide a quick, in-depth profile of each employee. Essentially, it creates a talent stream within the firm. When done well, the nine-box grid becomes part of the company's culture of identifying and promoting people based on performance, not on popularity. Utilizing Available Resources T here are many organizations and enti- ties dedicated to helping companies improve diversity. You can find examples of organizations that have developed leadership diversity at the CEO Action website, created by PwC and its partners. CEO Action is led by CEOs who have made commitments to advancing diversity in their workplaces and who understand that the change needs to start with them. More than 400 CEOs representing some of the most significant companies in the world participate in CEO Action, and you can find many of the strategies they've developed on the CEO Action website. Organizations that are still having trouble making a commitment to diversity should be reminded of the many benefits it brings to the C-suite and on corporate boards. The data are incontrovertible: diversity has a substantial impact on a company's bottom line. Recently, a working paper by the Peterson Institute for International Economics and published in the Harvard Business Review found that companies with greater numbers of women at the CEO, board, or C-suite level were more profitable. In fact, between companies with no women in positions of leadership to companies with 30 percent of leadership positions occupied by women, there was a 1 percent increase in net margin. For a typical firm, this equated to a 15 percent rise in profitability. Global consulting firm McKinsey, which has been measuring diversity among corporate leadership for several years, recently examined proprietary data sets for 366 public companies, including the composition of top managers and boards. Companies that were in the top 25 percent for racial and ethnic diversity were 35 percent more likely to have better results than the median for their industries. In the U.S., the data showed a direct relationship between racial and ethnic diversity and better results. For every 10 percent increase in racial and ethnic diversity that existed on a company's senior leadership, earnings before interest and taxes (EBIT) rose by 0.8 percent. It's easy for organizations to say they are committed to diversity. But it won't happen by itself. There needs to be a plan, a process, and a commitment to following them. Even when leaders are armed with the right information and strategy, it can be easy to circumvent the proper process by falling back on the "I know a guy" approach. So, don't buy into the "organically grown diversity" myth. That is the long and less successful path. The best way to build diversity is at the top. When organizations say, "we know there is a problem, and here's what we're going to do about it," everything changes—and it's so worth it. DEBORA AYDELOTTE is the COO of Credit Risk Solutions, a Denver-based provider of consultative residential mortgage fulfillment and due diligence services. Aydelotte is a recognized expert and leader in executive diversity and inclusion practices. It's easy for organizations to say they are committed to diversity. But it won't happen by itself. There needs to be a plan, a process, and a commitment to following them. 750 Old Hickory Blvd; Building Two Suite 150 Brentwood TN 37027 www.IRAinnovations.com Call Mike Todd at 866.333.0411 or email Mike@IRAinnovations.com for a personal consultation. Serving clients nationwide since 2004 Personalized Self-Directed Retirement Services IRA Innovations specializes in self- directed retirement plans allowing you complete control to invest in alternative investments such as: • Real Estate • Promissory Notes • Private Companies • Precious Metals and more!