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ERGs – Deloitte To Lose People Resources

A major shakeup in the world of Employee Resource Groups – ERGs – may be happening, and Deloitte is causing it. On July 19th 2017 Bloomberg announced that Deloitte is nixing employee affinity groups and replacing them with inclusion councils that have white men.

“By having everyone in the room, you get more allies, advocates, and sponsors,” Deepa Purushothaman, who led the women’s network WIN at Deloitte since 2015, says. “A lot of our leaders are still older white men, and they need to be part of the conversation and advocate for women. But they’re not going to do that as much if they don’t hear the stories and understand what that means.”

Focus on men

According to the Harvard Business Review, Deloitte has started a major debate in diversity circles by turning its approach upside down. “The firm is ending its women’s network and other affinity groups and starting to focus on…men. The central idea: It’ll offer all managers — including the white guys who still dominate leadership — the skills to become more inclusive, then hold them accountable for building more-balanced businesses.”

How radical is getting rid of ERGs? And is it worth trying?

To answer the first question, we can look at research conducted in the Netherlands on women’s networks as an HRM diversity instrument (Yvonne Benschop and Ine Gremmen in Tijdschrift voor HRM, 2013). Benschop and Gremmen looked at eight women’s networks in the Netherlands, in the private sector and in social services. None were set up by the company as a diversity instrument. They were set up to bring women together from across different departments, to provide opportunities for professional growth, and to develop a better understanding of gender issues within the organization. Most network roles are performed by volunteers. There is very little contact between the networks and their boards of directors. Where that does exist it is at the request of the network itself. Many networks would like to advise on gender issues within the organization, few have this role. And while most networks have very few financial resources, they are often asked to support HR professionals in their job, without incorporating this cooperation in individual performance reviews.

The central question in my own management studies dissertation was to understand the added value of networks for companies from an HR perspective. My conclusion was that networks can be vastly useful to companies. Most companies are not even picking the low-hanging fruit let alone looking for further value.

Are these ERGs failed diversity instruments?

I think it is inappropriate to label corporate women’s networks as diversity instruments. After all, the networks were mostly set up by women employees, are mostly run on a voluntary basis, and if you do a quick scan of what women’s corporate networks say they do, you come up with terms like:

Advancement of women

Ambition

Offering feedback

Raise awareness

Professionalization

Empowerment

Given that the networks were set up at the initiative of the women and not as a diversity instrument, they cannot be judged – and found guilty – of not being a good diversity instrument. Rather, it is time to start looking seriously at how diversity networks do and can contribute to organizations, to set goals that are relevant to the possibilities of networks and to recognize the work of leaders in the networks.

The nature of networks

Networks are a natural phenomenon. There are many definitions of the term “network”, and as you can imagine in the social sense it is a different animal than in the IT-world. The Australian anthropologist J.A. Barnes coined the word “network” in 1954 to describe the organization of communities on a Norwegian island. Although the interest in networks was confined for many years to the sociological and anthropological worlds. Only a smattering of people in the management studies world have now begun to take an interest. But as Manuel Castells says, networks cannot be managed, and business studies is all about management. When I work with groups I use INSEAD /ESADE Prof. Thomas Maak’s definition of networks. Networks are “an enduring exchange between organizations, individuals and groups”.

Formal and informal networks

A network can be formal or informal. A formal network is called into being by its members or by others and is can be like a project and time-bound, or unlimited by time (that is, it lasts till it is no longer an enduring exchange between organizations, individuals and groups. An informal network is formed by people communicating with each other. An informal network could be the smokers who see each other outside in the break. It could be the people in the organization who went to the same school and are aware that this is their connection and use it from time to time. Most of the networks we humans are involved in, are informal, not created. Networks are not innately good or bad. They have nothing to do with morals. They simply exist as a result of us being human. I have discussed the characteristics of networks at length in my book So You Think You Can’t Network.

What should Deloitte do?

By scrapping networks and replacing them with inclusion councils, Deloitte could be missing out on the real potential the networks have to contribute to the goals of the organization.  I think there are two essential steps to be taken that includes Deloitte’s idea of including men.

The first step forward for ERGs and networks

The first step is to start understanding at a much deeper level what networks in organizations are. Otherwise you cannot explore how to reduce their negative impact on the goals of the organization and the quality of working life of the employees. And you can’t increase their positive impact.

The second step forward forward for ERGs and networks

Affinity groups/employee networks/ employee resource groups are just one kind of network in an organization. The white men that Deloitte wants to bring in are also members of networks in the organization, formal and informal. As an elite, these networks get to say how things work. I call them dominant networks.

So how do we influence that dominant network to be inclusive of people who are not like them?

Tools of strategic perturbation

I suggest that strategic perturbation of the network is required. In the literature on gender mainstreaming there are, albeit scant, examples of strategic perturbation. In the 1970’s five world class philharmonic orchestras in the United States had only 5% women in their pits. They decided to do only blind auditions for new musicians, to counter the unconscious bias that men were better musicians than women. Now most of these five orchestras have over 30% women musicians. The blind audition was a way to perturb the network dominating the decision-making and allowing factors like quality to enter the arena.

Mentoring and sponsorship

Mentoring and sponsorship is another tool to perturb the network. It takes only one person in the network to reach out and bring in an outsider, but that action alone is not enough. That person has to remain an advocate of bringing in outsiders. She or he  has to be aware that the inherent force of the network wanting to maintain the status quo will constantly test the newcomer’s trustworthiness and ability to champion that which the network thinks is important. And once inside, the newcomer too needs to be an advocate for more newcomers. She cannot rest on her laurels and say: “I got here on my own”, even if she believes that is the case. She too needs to consciously sponsor and mentor new outsiders. This solidifies her position and creates new opportunities for others.

 

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Lin McDevitt-Pugh MBA wrote the book So You Think You Can’t Network to provide the general public with information on how networks work and how to use networks as a resource. She is available to provide masterclasses in developing effective networks.

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